Oil slips 2% on economic woes

2023-04-26
Summary:

U.S. Stocks sold off as disappointing earnings and economic data fueled recession fears, sending safe havens higher and oil sharply lower.All three major indexes ended down 1% or more, with NASDAQ plunging nearly 2%, the biggest daily drop since March 9.

U.S. Stocks sold off as disappointing earnings and economic data fueled recession fears, sending safe havens higher and oil sharply lower.


All three major indexes ended down 1% or more, with NASDAQ plunging nearly 2%, the biggest daily drop since March 9.


Euro STOXX 50 inched down declined by 0.54% which kept outperforming U.S. peers so far this year thanks to interest rates of high level.


Commodities

Gold remained below $2000 after posting mild gains. U.S. consumer confidence fell to a nine-month low in April, a survey showed on Tuesday.


‘The type of environment where both gold and dollar gain, it's very much risk-off high-volatility stuff,’ said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.


Crude oil inventories in the United fell this week by 6.083 million barrels versus 1.667 million expected, the American Petroleum Institute (API) data showed.


Forex

The dollar and the yen were mostly buoyed with the euro pulled back from around 10-months high. First Republic shares halved after its closure of significant deposit outflow.


U.S. Treasury Secretary Janet Yellen on Tuesday warned that failure by Congress to raise the government's debt ceiling - and the resulting default - would trigger an "economic catastrophe" that would send interest rates higher for years to come.


Republican U.S. House Speaker Kevin McCarthy on Wednesday unveiled a plan to raise the nation's debt ceiling by $1.5 trillion and cut federal spending by three times that amount but democrats may find it unacceptable and unreasonable.


‘Today is more about defensive risk sentiment, especially in equities. It's hard to detect a strong trend though,’ said Vassili Serebriakov, FX strategist at UBS in New York, ‘The bias is for dollar weakness, but I think until U.S. data weakens substantially, it's hard to see that trend really picking up.’

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