Spot Crude Oil Deflates as Bears Swipe at Energy Prices
With the US in a technical recession and the UK on the verge of one, bearish market sentiment swiped at energy markets, cutting into spot crude oil prices and potentially defueling inflation in the short-to-medium term.
If crude oil’s recent downward trend persists it would likely set new conditions in the global economy, reducing the strain of inflation in the key manufacturing, food and fuel sectors. The Federal Reserve may re-set inflation expectations and interest rate adjustments, meaning there could also be an impact on the strength of the USD.
In other inflation news, the Bank of Canada (BoC) is set to announce year-on-year price data later today. Consumer Price Index (CPI) figures were at the level of 6.2 percent in June and are expected to have risen to 6.7 percent in July.
GBP traders are digesting the latest UK employment figures, which showed unemployment at 3.8 percent for the quarter ending in June, unchanged from the first quarter's results. Average earnings increased from 4.3 percent in Q1 to 4.7 percent in Q2, according to the latest statistics.
The UK also releases its latest inflation rate data tomorrow, Wednesday, August 17. The country’s CPI result for July is expected to be at the level of 9.8 percent compared to 9.4 percent in June. With the UK so close to double-digit inflation numbers, the burden remains on the Bank of England to stay the course on hiking interest rates.
The Reserve Bank of New Zealand (RBNZ) releases monetary policy updates tomorrow, Wednesday, August 17. The central bank is expected to hike its key interest rate from 2.5 percent to 3 percent to tame inflation which spiked to 7.3 percent in July.
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