Oil Futures Settle Lower As Inventory Data, Peace Talks Hopes Weigh

Crude oil prices dropped on Wednesday, extending losses to a third straight session, after data showed a surprise surge in U.S. crude inventories, and amid hopes of some progress in Russia-Ukraine peace talks.

West Texas Intermediate Crude oil futures for April ended lower by $1.40 or about 1.5% at $95.04 a barrel.

Brent crude futures were down $1.74 or about 1.7% at $94.70 a barrel a little while ago.

Data released by U.S. Energy Information Administration (EIA) showed crude oil inventories in the U.S. rose by 4.345 million barrels last week, as against expectations for a draw of 1.375 million barrels.

The EIA data also showed that distillate stock piles increased by 0.332 million barrels in the week, compared to expectations for a drop of 1.826 million barrels, while gasoline inventories dropped by 3.616 million barrels, more than twice the expected decline of 1.579 million barrels.

A downward revision in oil demand forecast by the International Energy Agency (IEA) weighed as well on oil prices. The IEA lowered its forecast for world oil demand for the second to fourth quarters of 2022 by 1.3 million bpd noting rising commodity prices and sanctions on Russia "are expected to appreciably depress global economic growth" and impact inflation.

In updates on peace talks, Ukrainian President Volodymyr Zelenskyy said during an address to the nation that the positions in the negotiations were beginning to "sound more realistic," while Russian Foreign Minister Sergey Lavrov told the BBC there was "some hope of reaching a compromise."

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source http://www.mt5.com/forex_news/quickview/2191307/

EUR/USD Recovery Looks Fragile Amid War Risks as US Dollar Eyes FOMC

EUR/USD is cautiously rising for a third day despite worsening fighting in Ukraine as European leaders visit Kyiv. Tonight's FOMC may inject volatility into the currency pair and bolster the USD's ... Via DailyFX - Market News https://ift.tt/9rhUE2L

Japan Trade Data Due On Wednesday

Japan will on Wednesday release February figures for imports, exports and trade balance, highlighting a light day for Asia-Pacific economic activity.

Imports are expected to jump 28.0 percent on year, slowing from 39.6 percent in January. Exports are called higher by an annual 21.0 percent, up from 9.6 percent in the previous month. The trade deficit is pegged at 112.6 billion yen following the 2,191.1 billion yen shortfall a month earlier.

Japan also will see final January figures for industrial production; previously, output was down 1.0 percent on month and up 2.7 percent on year, while capacity utilization fell 0.4 percent.

New Zealand will provide Q4 data for its current account, with forecasts calling for a deficit of NZ$6.213 billion following the NZ$8.3 billion shortfall in the previous three months.

Australia will see February figures for the leading economic index from Westpac; in January, the index was up 0.1 percent on month.

China will release February's house price index; in January, prices were up 2.3 percent on year.

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source http://www.mt5.com/forex_news/quickview/2191254/

Gold Price Bubble Bursts as Real Yields Leap Ahead of the Fed. Where to for XAU/USD?

Gold has continued lower as a combination of commodity withdrawal, rising rates and a strengthening USD undermine it. Can XAU/USD find some footing? Via DailyFX - Market News https://ift.tt/9rhUE2L

Dollar Turns In Mixed Performance Against Major Counterparts

The U.S. dollar stayed weak for much of the day's session on Tuesday, with traders looking ahead to the Federal Reserve's monetary policy announcement for some direction.

The Fed is widely expected to announce a 25-basis points rate hike.

Data released by the Labor Department showed producer prices increased by slightly less than expected in the month of February. The data said the producer price index for final demand climbed by 0.8% in February after surging by an upwardly revised 1.2% in January.

Economists had expected producer prices to advance by 0.9% compared to the 1% jump originally reported for the previous month. Excluding prices for food, energy and trade services, core producer prices edged up by 0.2% in February following a 0.8% increase in January.

New York manufacturing activity unexpectedly contracted in the month of March, according to a report released by the Federal Reserve Bank of New York.

The New York Fed said its general business conditions index tumbled to a negative 11.8 in March from a positive 3.1 in February, with a negative reading indicating a contraction in regional manufacturing activity. Economists had expected the index to dip to a positive 7.0.

With the much bigger than expected decrease, the general business conditions index dropped to its lowest level since May 2020.

The dollar index, which dropped to 98.64 in the Asian session, climbed to 99.20 later on in the day before retreating to 99.05, up marginally from the previous close.

Against the Euro, the dollar is trading at $1.0944, after having weakned to $1.1021 in the Asian session.

The dollar is trading at $1.3041 against Pound Sterling, weakening from $1.3001.

The dollar is trading at 118.31 yen, about 0.1% more than the previous close of 118.19 yen.

Against the Aussie, the dollar is at $0.7195, down marginally from $0.7187.

The Swiss franc is trading at 0.9413 a dollar, easing from 0.9386. The Loonie is firmer against the dollar, at C$ 1.2772, gaining from C$ 1.2826.

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source http://www.mt5.com/forex_news/quickview/2191253/

Dow Jones Rebound May Lift Hang Seng Index. Crude Oil Fall, FOMC Meeting in Focus

Wall Street stocks climbed on Tuesday as falling crude oil prices alleviated inflation concerns. The Hang Seng Index may be positioned for a rebound after reaching a six-year low. The FOMC meeting ... Via DailyFX - Market News https://ift.tt/SFoJbh9

Treasuries Show Notable Downturn After Seeing Early Strength

After moving to the upside early in the session, treasuries showed a significant downturn over the course of the trading day on Tuesday.

Bond prices pulled back well off their highs and into negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2 basis points to 2.160 percent after hitting a low of 2.078 percent.

The ten-year yield added to 13.6 basis point spike seen in the previous session, reaching its highest closing level since late May of 2019.

Treasuries initially benefited from bargain hunting following the steep drop seen in the previous session, with a Labor Department report showing producer prices increased by slightly less than expected in February also generating buying interest.

The Labor Department said its producer price index for final demand climbed by 0.8 percent in February after surging by an upwardly revised 1.2 percent in January.

Economists had expected producer prices to advance by 0.9 percent compared to the 1.0 percent jump originally reported for the previous month.

Excluding prices for food, energy and trade services, core producer prices edged up by 0.2 percent in February following a 0.8 percent increase in January.

Buying interest waned over the course of the morning, however, as traders continued to anticipate the Federal Reserve announcing its first interest rate hike since 2018 on Wednesday.

The Fed is widely expected to raise interest rates by 25 basis points, with traders likely to pay close attention the accompanying statement for clues about the outlook for rates.

The central bank is likely to continue raising rates over the comings months in an effort to combat elevated inflation, although the economic impact of the Russia-Ukraine conflict may affect the pace.

While the Fed announcement will be in the spotlight on Wednesday, traders are also likely to keep an eye on reports on retail sales, import and exports prices, and homebuilder confidence.

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source http://www.mt5.com/forex_news/quickview/2191252/