CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Crude oil halts slide as risk assets get amnesty on Biden’s assessment

Crude oil prices find support with risk assets steadying after recent mayhem; APAC equities move higher, joined by commodities and associated currencies and central bank speakers will be the focus going forward.

Crude oil benefitted from a rosier mood after US President Joe Biden said that a recession isn’t inevitable. The WTI futures contract is near US$ 111.50 bbl, while the Brent contract is around US$ 115.50 bbl.

Other commodity markets that have been roiled to start the week have fared a bit better today.

Risk assets in general got a lift with APAC equities all in the green. All of Japan’s main indices were over 2% higher. The US return from a long weekend today and futures markets are pointing toward a positive start to their week.

US Treasury yields are inching up again after St. Louis Fed President James Bullard said that inflation expectations could become unmoored unless Fed takes credible action

The RBA had a busy day with the release of a review into their yield curve control (YCC) program that fell apart last November, Governor Philip Lowe gave a speech and the June meeting minutes were released.

RBA Governor Lowe said that at the June meeting a decision between a 25 or 50 basis point hike was discussed. He added that he thought that a similar discussion will take place at the July meeting, effectively ruling out the possibility of a jumbo 65 basis point rate rise.

With the current cash rate at 0.85%, this implies that the bank is not worried about getting the cash rate back to multiples of 0.25%

The benchmark three-year Australian government bond yield remains near 3.70% after starting the year at 1.00%.

The Australian and Canadian dollars are slightly stronger through the Asian session, while the US dollar and Japanese yen are a touch softer.

Looking ahead, the focus will be on central bank speakers with the BoE, ECB and the Fed all being represented.

Crude oil (WTI) structural factors

WTI crude oil continues to exhibit relatively elevated backwardation. Backwardation being when the futures contract that is next to expire trades at a higher price than the contract that will expire after it.

This may indicate that the market is paying a premium to have immediate delivery rather than having to wait, hinting toward possible desperation to satisfy demand.

At the same time, volatility is relatively subdued, alluding to market comfort with the current level of crude oil.

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired


See more forex live prices

liveprices.javascriptrequired


See more shares live prices

liveprices.javascriptrequired


See more indices live prices

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.