Figures from Baker Hughes revealed a slight decrease in the number of oil rigs active in the US in the week before. The number of active oil rigs decreased from 387 to 598, a decrease of 7 rigs from 2021.
As the effects of the US non-farm payroll statistics released last week remain to be processed, Asian markets have opened the week somewhat subdued. In July, 528k jobs were added, slightly exceeding expectations.
After the revelation, Treasuries sharply depreciated; the 1-year note’s yield has become close to 3.30 %, which is the highest level in over 2 decades. On August 5, the yield curve for 2s 10s in the United States incurred an inversion all the way to -0.495%.
Since the technology crash of 2000, it has never been more inverted than it is now. An inversion may foreshadow an impending economic downturn. Over the past two days, Mary Daly, the Federal Reserve President in San Francisco, restated the central bank’s hawkish stance, asserting that the struggle against inflation was far from over.
She stated that a 50 bps increase was her baseline scenario at their session in the following month and that the data received would be rigorously scrutinized. CPI and PPI will be released in the US on August 10.
Even though the $101 billion trade surplus was better than expected (on the mainland), stocks of China and Hong Kong continued to decline. It is due to imports falling short of expectations and exports exceeding expectations.
This demonstrates how China’s internal economy is weaker than that of the world at large, which is loosening as a consequence of the pandemic. 80k tourists could not leave the Hainan holiday resort area due to a lockdown. The Chinese economy is still plagued by the real estate sector. Gold is stable today at roughly US$ 1,772, whereas the Australian Dollar is slightly stronger.
The price of WTI has decreased as the backwardation has decreased. It demonstrates the market’s readiness to pay extra for expedited delivery as opposed to delayed delivery. Backwardation has decreased to levels last seen prior to the Russia – Ukraine war, which could enable prices to drop even further.