December futures for Brent on London’s ICE Futures exchange fell by $0.33 (0.36%) to $91.47 per barrel by 14:25 CST.
Quotes of WTI futures for November in electronic trading on the New York Mercantile Exchange (NYMEX) by the specified time fell by $0.46 (0.53%) to $86.06 per barrel.
Bloomberg reported, citing delegates to the upcoming meeting, that OPEC + may discuss the possibility of reducing production quotas by 2 million barrels per day (b / d) at once compared to the current level.
“A 2 million b/d cut will show that OPEC+ is keen to support oil prices,” said Vishnu Waratan, an analyst at Mizuho Bank in Singapore.
The UAE is likely to support cutting OPEC+ oil production quotas, despite the US administration’s efforts to prevent such a move, the FT newspaper writes, citing two people familiar with the situation.
Earlier, UAE Energy Minister Suheil al-Mazroui told reporters in Vienna that OPEC+ “remains a technical organization and it is very important that the decision remains technical and not political.”
In addition, traders’ attention on Wednesday will be directed to last week’s data on US energy stocks, which will be released by the Department of Energy at 17:30 CST. A report from the American Petroleum Institute (API), published yesterday, showed a decrease in inventories by 1.77 million barrels after rising by 4.15 million barrels a week earlier.
The stock market of Western Europe is falling on Wednesday morning, while before that the indices were actively growing for three days in a row and ended Tuesday’s trading with a record rise in six months.
The composite index of the largest companies in the region Stoxx Europe 600 by 11:22 qoq fell by 0.9% and amounted to 399.40 points.
The British stock index FTSE 100 by this time fell by 1.25%, the German DAX – by 0.99%, the French CAC 40 – by 0.96%. The Italian FTSE MIB and the Spanish IBEX 35 lost 1.7% and 1.5% respectively.
The negative factor for the European market was the continuing fears about the global recession, which were confirmed in a number of statistical data.
Thus, the index of purchasing managers in the euro area services sector, calculated by S&P Global, amounted to 48.8 points in September, which is the lowest value of the indicator since February 2021, the final data show. Preliminary data indicated a decline in the index to 48.9 points from 49.8 points in August.
The indicator value below 50 points indicates a reduction in business activity in the sector.
In Italy, PMI in the services sector fell to 48.8 from 50.5 points, in Germany – to 45 from 47.7 points, and in France the indicator rose to 52.9 from 51.2 points.
The consolidated PMI in the euro area fell to 48.1 points in September from 48.9 points a month earlier, updating the minimum since January 2021.
In addition, Germany’s foreign trade surplus narrowed to 1.2 billion euros in August from 13.7 billion euros a year earlier and 3.4 billion euros in July.
The volume of German exports adjusted for calendar and seasonal factors in the month before last increased by 1.6% compared to the previous month and amounted to 133.1 billion euros. Imports increased by 3.4% to 131.9 billion euros.
Meanwhile, France’s industrial output jumped 2.4% in August from a 1.6% fall in July. Growth was a record since January 2021, while analysts did not expect a change in the indicator.
Bang & Olufsen A/S shares are down 2.6%. The Danish manufacturer of high-end audio systems, headphones and other electronics posted a net loss in the first financial quarter and cut revenue by 8.2%.
Tesco Plc rises 2.5%, although the UK’s largest grocery retailer cut pre-tax profits in the first half of fiscal year 2023 by 2.8 times and slightly worsened its full-year forecast, noting a change in consumer behavior in an environment of high inflation.
The capitalization of the Finnish airline Finnair is growing by 1.2% on the news that the company carried 890.5 thousand passengers in September, 1.1% more than in August. In September last year, the figure was 298.2 thousand.
The decline leaders among the components of the Stoxx Europe 600 index are the shares of the Swedish bank Avanza Bank Holding (-6.4%) and the French auto parts supplier Faurecia SE (-6.2%). The leaders of growth are papers of cloud technology provider Sinch AB, rising in price by 9.7%.
The dollar strengthens against the euro, yen and pound sterling in trading on Wednesday after a sharp decline the day before amid signals of a gradual decline in activity in the US economy.
Investors are waiting for data on the US labor market, which is expected to show a slowdown in job growth in the country. The consensus forecast of experts surveyed by Market Watch suggests that the number of jobs in September increased by 275 thousand (315 thousand in August), while maintaining unemployment at 3.7%.
The US Department of Labor will release the data on Friday at 3:30 p.m.
Another report from the Department of Labor, which was published on Tuesday, showed a sharp decrease in the number of open vacancies in the States in August. The indicator fell by 10% – the fastest pace since the start of the pandemic in 2020, to 10.1 million vacancies.
Weak statistics on the US economy are a good signal for risk appetite, as they speak in favor of a reduction in the trajectory of the Federal Reserve (Fed) rate hike, said Steven Innes, managing partner at SPI Asset Management.
Some “cooling” of the labor market will help ease inflation in the US and may reduce the need for further sharp tightening of monetary policy by the Fed, writes Dow Jones.
“If this trend continues, the Fed may back off somewhat in terms of rate hikes later this year and early next year,” said Jack Janasiewicz, portfolio manager at Natixis Investment Managers Solutions.
The euro/dollar pair is trading at $0.9966 on Wednesday, compared to $0.9987 at the close of previous trading. The pound fell to $1.1435 from $1.1475 at the close of previous trading.
The US dollar against the yen is 144.25 yen against 144.14 yen the day before.
On Tuesday, the dollar lost 1.7% against the euro, 1.4% against the pound and 0.3% against the yen.
Stock indices of the largest countries in the Asia-Pacific region (APR) show a significant rise on Wednesday morning amid speculation that the world’s central banks may abandon the overly aggressive tightening of monetary policy.
A positive impetus to Asian markets was given by the increase in US indices by 2.8-3.3% on Tuesday. Wall Street had the best start to the quarter since 1938.
Investors evaluate the incoming statistical data, which often turn out to be worse than forecasts, and regard them as signals of a slowdown in the global economy. As a result, the world’s central banks may moderate the pace of interest rate hikes, Trading Economics notes.
Yesterday, the Reserve Bank of Australia (RBA) surprised the markets by raising its key rate by 25 basis points (bp) instead of the expected increase by 50 bp. The Australian Central Bank raised the rate by 50 bp. in June, July, August and September, in an effort to slow inflation, which the Central Bank expects to peak by the end of 2022 at around 8%.
On Wednesday it became known that retail sales in Australia rose by 0.6% in August compared to July after rising by 1.3% a month earlier. The index has been growing on a monthly basis for eight months in a row.
Meanwhile, New Zealand’s central bank on Wednesday again increased the rate by 50 bp, to the highest since April 2015 3.5% per annum. As the minutes of the meeting showed, the Central Bank management also discussed the possibility of raising the rate by 75 bp.
In South Korea, consumer prices (CPI index) in September rose by 5.6% in annual terms after rising by 5.7% in August, although analysts did not expect a change.
“We expect inflation to accelerate again in October. Gasoline prices may continue to decline, but gas and electricity tariffs were raised in early October, and the cost of fresh food is likely to increase ahead of winter,” said ING analyst Robert Carnell.
The value of the Japanese Nikkei 225 index rose by 0.6%.
The growth leaders among the components of the index are the shares of Nippon Yusen (+2.6%), Fast Retailing (+1.5%) and Keyence (+1.1%).
On Tuesday, Japanese Prime Minister Fumio Kishida urged Japanese companies to continue raising employee salaries at a rate in line with the country’s inflation rate.
The Hong Kong Hang Seng indicator soared 6.1%. On the eve of the Hong Kong stock exchange did not work, and the day before the index fell to a minimum in 11 years.
Pork producer WH Group jumped 7.8% in Hong Kong trading on news of the sale of its US and Canadian spice business to Saratoga Food.
Market value of Shenzhou Intl. Group climbs 12.4%, BYD Co. – by 9.3%, JD.Com – by 9.2%, Ping An Insurance – by 8.8%.
Exchanges in mainland China are closed due to the National Day holidays.
The South Korean Kospi index is growing by 0.4%.
The market value of one of the world’s largest chip manufacturers Samsung Electronics Co. increased by 1.1%, automaker Hyundai Motor – decreased by 2%.
The Australian S&P/ASX 200 added 1.7%.
The growth leader is the IT sector. Block Inc rose 7.3%, Seek Ltd – 5.9%, Xero Ltd. – by 3.5%. Shares of leading Australian banks are rising by more than 2%.
Fortescue Metals gained 2% after the mining company promised to double its planned investment in its green energy division.
At a meeting on Tuesday, the Government of Ukraine decided to transfer more than 800 enterprises with assets worth UAH 45 billion to the State Property Fund, First Deputy Economy Minister Denis Kudin said.
“This is the largest transfer of enterprises in the term of this government. In fact, now only assets in the field of energy, infrastructure, defense industry, culture and standardization and metrology remain subordinate to the ministries,” he wrote on Facebook.
According to available information, in this list, in particular, “Artyomsol”, “Konyarstvo of Ukraine”, NSC “Olympic”, “Odessa Film Studio”, coal enterprises.
Kudin clarified that so far the Fund has not been transferred to enterprises in respect of which restructuring or transformation to another organizational form is underway: for example, from a state enterprise to a state institution or state organization, or companies in a state of liquidation, or perform service functions.
“The next step is for the State Property Fund. We expect that by mid-November the Fund will be able to actually start working as a management body for these and other enterprises, regarding which the decision to transfer was made earlier,” said the first deputy head of the Ministry of Economy, who was previously responsible for managing state assets in the Fund .
Kudin recalled that the goal of the reform is to reduce the size of the state in the economy and stimulate private entrepreneurial initiative. According to him, the Fund will make a decision on privatization of some enterprises, while others will be consolidated into asset management holdings and will bring dividends to the budget.
The State Property Fund (SPF) of Ukraine would like to become a single manager of all state property in the country, while it is currently distributed among 96 different state departments, Rustem Umerov, appointed this week as its head, said.
Speaking at the Rebuilding Ukraine forum organized by UkraineInvest on Thursday, he expressed the opinion that such centralization would improve the efficiency of state property management.
The new head of the SPF, Rustem Umerov, appointed by the Rada in early September, previously announced plans to create a Sovereign Fund, which would unite the main state enterprises, as well as the intention to make the SPF the sole manager of all state property in the country, while currently it is distributed between 96 different government departments.
German Foreign Minister Annalena Burbock told her Polish counterpart Zbigniew Rau that Berlin would not pay reparations for World War II to Poland under any circumstances, the Associated Press reported on Tuesday.
“The question of reparations, as you know, from the point of view of the German authorities, is closed,” Burbock said during a press conference in Warsaw. The conference took place after ministerial talks on the subject.
In turn, Rau expressed the hope that Germany’s position could change.
On Monday, the head of the Polish Foreign Ministry sent a note to Germany, which requested about $1.3 trillion in reparations for material and other damage that Germany inflicted on Poland during the occupation in 1939-1945.
