Oil prices held steady near $100 a barrel on Monday as support from a weaker dollar and a recovery in Chinese crude oil imports countered renewed demand concerns stemming from China's tough approach to containing Covid.

 

Brent oil futures fell 7 cents, or 0.05%, to $98.52 a barrel. US West Texas Intermediate crude was $92.46 a barrel, down 15 cents, or 0.2%.

 

Both contracts fell more than $1 a barrel early in the session as Chinese health officials reaffirmed their commitment to a strict approach to containing Covid over the weekend, dashing hopes for a recovery in oil demand from the world's largest oil importer.

 

Brent and WTI rose last week, gaining 2.9% and 5.4% respectively on speculation that the Covid-19 lockdowns could end despite no announced changes.

 

But prices cut losses in early European trade after stronger risk sentiment, news of a rebound in Chinese crude oil imports and a weaker US dollar against other currencies, UBS analyst Giovanni Staunovo said.

 

The US dollar slipped against the euro on Monday, while the pound sterling was supported by sentiment risk and a rally in European stock markets.

 

While China's imports and exports fell unexpectedly in October, crude oil imports rose to their highest level since May.

 

Oil prices are supported by supply cut expectations as the European Union embargo on Russian oil exports by sea comes into effect on December 5, despite refineries around the world ramping up production.

 

US refineries will be operating their refineries at breakneck speeds near or above 90% capacity this quarter. China's largest private refinery Zhejiang Petroleum and Chemical Co (ZPC) ramps up diesel production.

 

Kuwait Integrated Petroleum Industries Co (KIPIC) said on Sunday that the first phase of the Al Zur refinery has entered commercial operation, the state news agency reported.

Mastercard aims to bring cryptocurrency to the masses, making it easier for banks to participate.

 

The payment giant plans to announce on Monday a program that will help financial institutions offer cryptocurrency trading, CNBC reported. Mastercard will act as a "bridge" between Paxos, a crypto trading platform already used PayPal to offer a similar service, and banks, according to the company. Mastercard will be concerned with regulatory compliance and security , the two main reasons why banks avoid the asset class.

 

Some consumers are also skeptical. Cryptocurrencies like bitcoin are notoriously volatile, and the best digital assets in the world have lost more than half of their value this year. Since January, the industry has been hit by billions of hacks combined with numerous high-profile bankruptcies.

 

Mastercard's chief digital officer said surveys still show demand for the asset, but roughly 60% of respondents said they would prefer to test water through their existing banks.

 

"There are a lot of consumers who are really interested in this and intrigued by cryptocurrencies, but they would feel much more confident if these services were offered by their financial institutions," Mastercard chief digital officer Jorn Lambert said in an interview. "Some people are still a little scared."

 

Major investment banks such as Goldman Sachs, Morgan Stanley, and JPMorgan have singled out crypto teams but have largely avoided offering it to consumers. Just last week, JPMorgan CEO Jamie Dimon called cryptocurrencies "decentralized Ponzi" at an institute of international finance event. If banks adopt this Mastercard partnership model, it could mean more competition for Coinbase and other U.S. exchanges.

 

The payment company said its role is to keep banks on the right side of regulation by following cryptographic compliance rules, verifying transactions and providing anti-money laundering and identity monitoring services. Mastercard will pilot the product in the first quarter of next year and then "crank the handle" to expand into more geographic regions. Lambert declined to say which banks have signed up so far.

 

While the industry is going through a bear market or "crypto winter," Lambert said more activity in the future could lead to more transactions and fuel Mastercard's core business.

 

"It would be short-sighted to think that a small crypto winter portends its end – we don't see that," he said. "As regulation of cryptocurrency platforms is introduced, the degree of their security will increase, and in the coming years we will see how many current problems will be solved in the coming years."

 

Mastercard and Visa enter into partnerships in the field of cryptocurrency. Mastercard has already teamed up with Coinbase on NFTs and Bakkt to allow banks and merchants on its network to offer cryptocurrency-related services. Last week, Visa partnered with FTX to offer cryptocurrency debit cards in 40 countries and has more than 70 cryptocurrency partnerships. American Express said it was exploring the possibility of using its cards and stablecoin network, which are pegged to the price of a dollar or other fiat currency.

 

Cryptocurrencies, ironically, were designed to destroy banks and intermediaries such as Mastercard and Visa. Their underlying technology, blockchain, allows transactions to be conducted without intermediaries. However, Lambert said they didn't see a response from the industry to their involvement. According to him, cryptocurrencies are on the "verge of a real mainstream", and for this they still need to unite with existing players.

 

"It's hard to believe that the crypto industry will really become mainstream without embracing the financial industry as we know it," Lambert said.

Gold prices were in a tight range on Friday as investors awaited a U.S. employment report that could affect the trajectory of the Federal Reserve's rate hike.

 

However, thanks to the depreciation of the dollar and the yield of US Treasury bonds, gold is still on track for the best week since March.

 

Spot gold remained at about the same level at $1,710.30 per ounce. This week, prices rose by about 3.3%.

 

U.S. gold futures were down 0.2% at $1,718.10.

 

"We have data on employment in the non-agricultural sector of the United States, and this will be a very important point, because recently market expectations have shifted towards easing the Fed's course towards tightening monetary policy," said Ricardo Evangelista, senior analyst at ActivTrades.

 

The jobs report is due Friday, and economists predict 250,000 jobs were created last month.

 

Fed officials are sticking to their hawkish stance in the fight against high inflation, and more favorable-than-expected employment data will give rise to another significant rate hike at the upcoming central bank meeting, analysts say.

 

Although gold is considered a hedge against inflation, rising rates in the U.S. reduce the attractiveness of non-income bullion and raise the dollar.

 

"The main obstacle is our expectation that the Fed will continue to raise rates longer than the market predicts, which will lead to an appreciation of the US dollar and to the fact that gold/other asset classes will remain afloat or fall in price," said Michael Langford, director of corporate consulting firm AirGuide.

 

"In the short term, we believe that gold prices will fall below $1,700 per ounce."

 

Silver fell 0.1% to $20.63 an ounce, the biggest weekly gain since July, up more than 9% to date.

 

Platinum rose 0.5% to $926.60 an ounce and reached its best weekly rate since February 2021. Palladium rose 0.7% to $2276.01.

The Japanese yen jumped on Thursday after monetary authorities intervened in the foreign exchange market to strengthen the beaten currency for the first time since 1998, although analysts said Japan could face difficulties in holding the yen for a long time.

 

The dollar last fell 1.1% to 142.40 yen. After the intervention, it hit a low of 140.31 yen, having previously reached a new 24-year peak of 145.9 yen. The spread between the high and low of the day for the pair was the widest since June 2016.

 

The euro, the Australian dollar and the pound sterling also fell against the Japanese currency, but then recovered slightly.

 

"We have taken decisive action," Masato Kanda, Japan's deputy finance minister for international affairs, told reporters, answering in the affirmative when asked whether this meant intervention.

 

Confirmation of the intervention came just hours after the Bank of Japan decided to keep interest rates low to support the country's fragile economic recovery.

 

Bank of Japan Governor Haruhiko Kuroda told reporters that the central bank could refrain from raising rates or changing its dovish political leadership for several years.

 

By contrast, central banks around the world, most notably the U.S. Federal Reserve, are actively raising rates, and this policy divergence puts pressure on the yen.

 

However, according to analysts, Japan cannot continue to support the currency on a permanent basis.

 

"In the next three to six months, and maybe longer, as long as these monetary policy divergences persist and these differences persist, you will continue to see the yen weaken," said Brendan McKenna, international economist and currency strategist at Wells Fargo Securities.

 

"U.S. yields are up nearly six basis points or so today, while yields in Japan are down. Therefore, I think that the spread should continue to favor the US dollar, and this is what will lead to a weakening of the yen until the end of this year and possibly in early 2023," he added.

Chinese electric vehicle maker Nio has joined others in the industry in saying that US restrictions on sales of Nvidia chips to China will not affect the automaker's business.

 

Last week, Nvidia announced that the US would require the chipmaker to obtain a license for future exports of certain products to China to reduce the risk of their use by the Chinese military.

 

"We believe this will not affect our business operations", — William Lee, founder, chairman and CEO of Nio, said through the company's translator during a call on Wednesday. This is according to the StreetAccount transcript.

 

"We estimate that our computing power is sufficient for the development of autonomous driving technology in the aspect of AI training," Li said. "And we're working very closely with our partner Nvidia."

 

The Nvidia Drive Orin chip has become a core part of autonomous driving technology for Nio and other electric vehicle companies in China. Nvidia's online blog describes how the new Nio ES7 SUV is equipped with four such chips, including one that allows the car to learn based on the driver's individual preferences.

 

The new US restrictions target Nvidia's A100 and H100 products, which are part of the company's much larger data center business. These products are GPUs that can be used for artificial intelligence.

 

Li said on Wednesday that there are many companies in China that make artificial intelligence training chips, and that Nio is evaluating cooperation opportunities with various companies. But he said that US restrictions would not affect Nio's long-term strategy.

 

Last week, automaker Geely said it would not be affected by the new restrictions, as self-driving startups WeRide and Pony.ai did.

 

Earlier this week, Chinese financial news website Caixin reported that He Xiaopeng, chairman of electric vehicle startup Xpeng, said the restrictions would cause problems for learning autonomous driving algorithms on cloud computing platforms.

 

But he said the company has purchased enough high-tech products to meet demand in the coming years. Caixin quoted He's post on his personal WeChat account, which is similar to a private post on Facebook's news feed.

The U.S. dollar on Thursday retreated from a two-decade high against a basket of major currencies as investors awaited a speech by Federal Reserve Chairman Jerome Powell the next day in search of new clues about further monetary policy.

 

The dollar index, which measures the dollar against six major currencies, fell 0.15% to 108.47 but remained close to the highest since September 2002 at 109.29 reached in mid-July.

 

Investors had expected the Fed at its annual meeting in Jackson Hole, Wyoming, to double its commitment to suppress inflation.

 

Money markets have dampened expectations that the U.S. central bank could move to a slower pace of rate hikes following a chorus of Fed hawkish comments in recent weeks, and now the chances of another super-large 75 basis point rate hike next month are 60.5% versus a 39.5% chance of a half-point rate hike.

 

Expectations of FOMC Chairman Powell's hawkish message to Jackson Hole are likely to keep upward pressure on the U.S. dollar," Commonwealth Bank of Australia analyst Christina Clifton wrote in a client note.

 

"However, there is a risk that the speech will be considered insufficiently hawkish, and we will see some rollback of the US dollar."

 

The dollar retreated 0.25% to 136.775 yen, but remained near this week's one-month high of 137.705.

 

The euro rose 0.14% to $0.99825 after falling to a 20-year low of $0.99005 on Tuesday.

 

The single currency has been hit by concerns about economic growth as the region faces an energy crisis and investors are in tension before Russia halts gas supplies via the main Nord Stream 1 gas pipeline for three days from Wednesday for unscheduled maintenance.

 

Sterling rose 0.17% to $1.18105 after falling on Tuesday to its lowest level since March 2020 of $1.1718.

 

The Australian dollar rose 0.19% to $0.6920, rising from a more than one-month low of $0.6856 at the start of the week.

 

The New Zealand kiwi lagged behind its antipode counterpart, rising 0.06% to $0.6194, thwarted by data on declining retail sales. On Monday, it hit a one-month low of $0.6157.

See which companies made headlines before the call:

 

Six Flags (SIX) — Shares of the theme park operator fell 12.8 % in the premarket after its quarterly profit and revenue fell short of Wall Street's forecasts. The results of Six Flags, among other factors, were affected by a drop in attendance by 22%.

 

Canada Goose (GOOS) - the manufacturer of outerwear reported smaller-than-expected quarterly losses, and revenue exceeded analysts' forecasts. Canada Goose is the latest luxury retailer to see its high-end consumers maintain their spending levels. Shares added 2.4% in pre-market trading.

 

Warby Parker (WRBY). The glasses retailer reported smaller-than-expected quarterly losses, with sales beating estimates. The number of active customers increased by 8.7% compared to last year.

 

Utz Brands (UTZ) — Shares of the maker of salty snacks jumped 8.2% in the premarket after reporting quarterly profit and revenue that were better than expected, and also raises the sales forecast for the full year.

 

Cardinal Health (CAH) – Cardinal Health fell 1% in the premarket after reporting mixed quarters, with the pharmaceutical distributor's earnings beating Street's forecasts and revenue falling short of estimates. Cardinal Health also announced that CEO Mike Kaufmann will step down on Sept. 1, and CFO Jason Hollar will take his place. Expected quarterly revenue and announcing a December 8 launch date for an ad-supported version of its streaming service, Disney+. He also announced that he would raise the price of his ad-free service from $7.99 to $10.99 per month.

 

Sonos (SONO) earnings: Revenue was also well below Wall Street's forecasts as the company lowered its full-year forecast in the face of economic woes. The manufacturer of high-end speakers also announced the departure of CFO Brittany Bagley from September 1.

 

Bumble (BMBL) - Bumble shares fell 8.9% in pre-market trading after the dating service operator lowered its annual revenue forecast. Bumble faces stiff competition from rivals such as Match Group (MTCH), Tinder's parent company, and its dating app Badoo, popular in Western Europe, has been hit by the war in Ukraine.

 

Vacasa (VCSA) – Vacasa soared 24.7% in the premarket after a holiday rental provider raised its full-year forecast amid rising demand. Vacasa also reported an unexpected quarterly profit.

 

Vizio (VZIO) - Vizio added 2% in the premarket after the manufacturer of smart TVs and other consumer entertainment equipment reported an unexpected profit for the last quarter with average revenue. per user by 54 % more than a year earlier.

Markets were subdued again Tuesday as investors awaited the Federal Reserve's latest meeting and the release of quarterly earnings reports from major tech companies later this week.

 

The Federal Open Market Committee wraps up its two-day meeting Wednesday, and investors expect another 75 basis point interest rate hike, while tech giants Apple, Amazon, Microsoft and Alphabet will release their quarterly earnings reports this week.

 

U.S. stock futures were down slightly in morning trading, with Dow Jones Industrial Average futures down 0.38 percent and Nasdaq futures down 0.32 percent. S&P 500 futures traded 0.30 percent lower after a Walmart earnings warning sent stocks down 9.3 percent in over-the-counter trading.

 

Analysts said the low futures trading volume means investors should expect another quiet day for stocks.

 

"Yesterday was a dull day, and today probably will be too," said Michael Brown, head of market analysis at Caxton FX. "Take the opportunity to rest up before the fireworks begin on Wednesday."

 

Alphabet and Microsoft will be the first major tech giants to report their earnings, with second-quarter reports to be released after Tuesday's closing bell.

 

"We have Microsoft and Alphabet today after the bell, Meta tomorrow, and Apple and Amazon on Thursday," said Deutsche Bank managing director Jim Reed. "So there will be more than $7.5 trillion at stake in the next couple of days."

 

Global stock indexes were also mixed, with the MSCI World Index up 0.1 percent, but several key stock markets saw slight declines.

 

Europe's flagship Stoxx 600 index was up 0.04%, with the Paris CAC 40 and Frankfurt DAX 40 falling 0.15% and 0.55%, respectively. London's FTSE 100 index traded more strongly, rising 0.63%.

 

In Asia, the Shanghai Composite was up 0.83% and Hong Kong's Hang Seng was up 1.93%, but Tokyo's Nikkei 225 was down 0.24% at the close of trading.

 

Here's how the other major asset classes are behaving:

• Bond yields fell, with the 10-year U.S. Treasury note down 3.1 basis points to 2.79% and the 2-year U.S. Treasury note down 1.7 basis points to 3.02%.
• Oil prices rose after Russia cut gas supplies through the Nord Stream pipeline to Europe to about 20 percent of its full capacity. Brent crude rose 1.75% to just under $102 a barrel and WTI crude rose 1.72% to more than $98 a barrel.
• Cryptocurrencies fell after the U.S. Securities and Exchange Commission opened an investigation into the Coinbase exchange: bitcoin fell 4.3% to just over $21,000 and ethereum fell 7.6% to about $1,400.

 

The euro hit a 20-year low on Friday, licking its wounds at the end of its worst week in two months as investors braced for Europe to enter a recession while markets waited for U.S. employment data to set the next direction for the dollar.

 

The euro fell more than 2% this week on fears that gas shortages are looming in Europe and economic growth will suffer. It hit a two-decade low of $1.0144 overnight and is barely clinging to parity, buying $1,0185 for the last time.

 

The fall of the euro led to the fact that the US dollar index this week reached a two-decade high of 107.270, and in Asia the index was last slightly below this level and fell by 0.1% - 106.840.

 

"Europe is exposed to great risks related to energy dependence, the crisis of the cost of living for consumers and the risk of fragmentation. This means a depreciation of the euro / dollar, "Citi analysts say.

 

The Australian dollar rose 0.3% on Friday to $0.6850, down from a two-year low of $0.6762, thanks to an infrastructure stimulus program announced in China that traders hope will boost demand for the commodity.

 

Sterling also seems to have weathered a week of British political chaos relatively well. It was down 0.3% for the week but rebounded slightly overnight when Prime Minister Boris Johnson resigned, putting an end to uncertainty about his future.

 

The pound last traded for $1.2053 and was on track for its best week in more than two years thanks to a weakening euro.

 

The New Zealand dollar rose 0.3% to $0.6192 and looks set for a stable week. Growing concerns about the outlook for the global economy stabilized the fall of the Japanese yen as investors seek safety and it held at 135.94 per dollar.

 

While skyrocketing energy prices appear to be unsettling confidence and growth in Europe, investors are also concerned about the health of the U.S. economy, even as the latest data has been better than expected.

 

The next indicator will be data on employment in the non-agricultural sector of the US, which should be released at 12:30 GMT. Economists predict that about 268,000 jobs were created in June.

 

Higher rates could ease some fears of a recession, but are likely to raise rates for rate hikes and could lead to a rise in the dollar.

 

"More significant job growth will underpin expectations of an even more aggressive Fed policy," said Carol Cong, a strategist at Commonwealth Bank of Australia in Sydney.

 

Deutsche Bank strategist Alan Ruskin also said simply living up to expectations would be enough to encourage talk of "U.S. exceptionalism" in the face of a global energy shock.

 

This could keep the dollar high, "with euro/dollar parity being the most obvious target for a few days/weeks," he said. The dollar has also held out in emerging markets, causing several Asian currencies to fall to multi-year lows this week, with the Indian rupee hitting an all-time low.

 

Bitcoin, meanwhile, began to recover, rising in price over the week by almost 15% to $ 22,100.

Wells Fargo economists said Wednesday they expect the U.S. to fall into recession in 2023 after the Federal Reserve raised interest rates by the largest amount since 1994 in a bid to suppress inflation.

 

The Fed's actions caused a change in views on Wall Street regarding the prospects for US growth, with analysts of all countries saying that the risks of recession are increasing.

 

On Wednesday, the central bank raised interest rates by 75 basis points — far more than the traditional 25 basis point hike — to bring the target range of the federal funds rate to 1.5 to 1.75%.

 

Fed officials said that in the current state of affairs, they expect to raise rates to about 3.8% in 2023.

 

Wells Fargo said a sharp increase in interest rates that would push borrowing costs across the economy would likely trigger a "mild recession" in mid-2023.

 

The bank's chief economist, Jay Bryson, previously believed that the Fed would be able to curb inflation without a sharp slowdown in growth.

 

"In our view, the recession will be more or less equivalent in scale and duration to the recession of 1990-1991. That recession lasted two quarters, and the peak of the decline in real GDP from peak to peak was 
real GDP by 1.4," Bryson said in a note to clients on Wednesday.

 

Wells Fargo wasn't the only one who became more pessimistic about the U.S. economy on Wednesday.

 

Sima Shah, chief strategist at Principal Global Investors, said the Fed's updated economic forecasts indicated a recession could begin even if Chairman Jerome Powell told reporters that such a fate could still be avoided.

 

The Fed abandoned its "flawless disinflation" scenario, instead acknowledging that unemployment is likely to rise if they have any hope of lowering inflation," she said.

 

"And while a recession doesn't directly appear in their forecast, a 0.5% increase in the unemployment rate by the end of 2024 definitely indicates a recession."

 

The Fed's own "dot chart," which shows officials' views on where interest rates are headed, showed that borrowing costs are likely to fall to about 3.4% in 2024. This suggests that policymakers expect to have to cut rates again as the economy slows.

 

"Tougher and faster measures entail economic costs," said James Knightley, chief international economist at Dutch bank ING. "Rising recession risks mean that rate cuts will be on the agenda in the summer of 2023."

Oil prices fell after a report that Saudi Arabia is ready to increase crude oil production if Production in Russia drops significantly after European Union sanctions.

 

The Financial Times reported, citing sources, that Saudi Arabia is aware of the risk of supply shortages and that "it is not in its interest to lose control over oil prices."

 

Oil prices fell in the morning hours of trading in Asia. Futures for the international benchmark Brent crude oil fell by 2.12% to $113.82 per barrel. U.S. crude futures fell 2.18% at $112.75 a barrel.

 

EU leaders on Monday agreed to ban 90% of Russian oil by the end of the year as part of the sixth package of sanctions the bloc has imposed against Russia since its invasion of Ukraine. Initially, this led to an increase in oil prices.

 

Sources told the FT that Saudi Arabia, the de facto leader of OPEC, has yet to see a real shortage in oil markets. So far, it has ignored pressure from Washington to accelerate production increases as oil prices have risen sharply this year.

 

But that could change when economies around the world reopen amid a pandemic recovery, boosting demand for crude oil.

 

These include China, the world's largest oil importer, where major cities are beginning to ease restrictions as daily Covid cases decline.

 

"While not a direct promise, Saudi Arabia [seems] has thrown a bone to the West," Matt Simpson, a market analyst at Britain-based trading platform City Index, wrote in a post-news release note.

 

"This will be well received by Western leaders, given that inflation – and inflation expectations – remain at sky-high levels, and central banks are trying to raise rates, risking plunging their economies into recession," he added.

 

The FT report comes ahead of the monthly meeting of the OPEC+ alliance on Thursday, which includes Russia. Russia is the second largest exporter of crude oil in the world after Saudi Arabia.

 

At the same time, some members of OPEC+ are also considering the possibility of removing Russia from participating in the deal on oil production, reports The Wall Street Journal, citing unnamed OPEC delegates.

 

OPEC delegates are reportedly concerned about growing economic pressure on Russia and its ability to pump more oil to lower rising prices.

According to Yardeni Research, U.S. households now spend the equivalent of $5,000 a year on gasoline, up from $2,800 a year ago.

 

In March, the annual level of gasoline costs was $ 3,800, Yardeni noted. In the week of May 16, the national retail price of gasoline reached a record $4.59 per gallon, the firm said.

 

"No wonder the consumer sentiment index is so depressed. Not surprisingly, retail sales in April and May were surprisingly high," Yardeni said in a note.

 

According to Yardeni, consumers' inflation-adjusted incomes are barely growing, but they have accumulated a lot of savings, and they have begun to pay more on credit cards.

 

However, Yardeni says that it is not worth betting against American consumers: "When we are happy, we spend money. When we're depressed, we spend even more money!"

 

Retail sales data for April, released on Tuesday, was surprisingly strong. Year-on-year, retail sales for the month rose 8.2%.

 

Gasoline sales in April were actually down from March as prices temporarily fell before rising to a record high in May. According to the Commerce Department, gasoline spending in April rose nearly 37% from a year ago.

 

According to the AAA, a year ago the price of gasoline was $3.04 a gallon. This week, the average price rose above $4 a gallon in all 50 states, according to AAA data.

 

The national average price on Wednesday was $4.57 a gallon, according to the AAA website.