Oil prices rise 2% in thin trading
2023-07-05
Summary:
European shares were steady in thin trading on Tuesday, with a lack of fresh economic data from the region and uncertainty around the direction of global interest rates keeping investors cautious.
European shares were steady in thin trading on Tuesday, with a lack of fresh economic data from the region and uncertainty around the direction of global interest rates keeping investors cautious.
Top central bankers have maintained their focus on bringing inflation back to their target levels, even in the face of slowing growth in the U.S. and the euro zone, adding to uncertainty about future global monetary policy steps.
Gold prices edged higher as some traders bet that recent weak U.S. economic data may prompt the Fed to rethink its rate-hike trajectory.
Oil prices climbed 2% as markets weighed August supply cuts by top exporters Saudi Arabia and Russia against a weak global economic outlook.
Commodities
Even before the latest cut announcements, IEA data suggested the oil market was set to show a supply deficit of roughly 2 million bpd in the third and fourth quarters.
Little has changed in oil dynamics despite Monday's announcements, said OANDA analyst Craig Erlam. ‘Only a significant break above $77 will suggest something has changed, otherwise range-bound trade could well continue.’
Forex
The Australian dollar fell 0.3% after the RBA held interest rates steady, ducking expectations from a slim majority of analysts that the bank would hike rates for a third straight month.
But losses in the Australian currency were limited, as the RBA still raised the possibility of more rate hikes in the near future.
The Japanese yen moved little, hovering just around seven-month lows as markets continued to watch for any potential intervention by the government in currency markets.
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