MNI China Daily Summary: Wednesday, July 3

MNI BRIEF:BOJ Q1 Output Gap Hits 16th Negative Reading In Row

MNI: PBOC Sets Yuan Parity Higher At 7.1312 Weds; -0.34% Y/Y

MNI: PBOC Net Drains CNY248 Bln Via OMO Weds; Rates Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS WEDS

CHINA SETS YUAN CENTRAL PARITY AT 7.1312 WEDS VS 7.1291

PPI a Tenth Softer than Exp; Further NEIG HICP Disinflation to Come?

MNI: EUROZONE MAY PPI -0.2% M/M, -4.2% Y/Y

Services PMI points to wage bills increasing operating expenses

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

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Oil Ultimately Lower Whilst Gold Under Strong USD Pressure

COMMODITIES
  • Crude futures are ending the session lower on the day, suggesting the market considers the wider market impact of Russian diesel and gasoline exports ban to be relatively limited with the measure generally expected to be fairly short lived.
  • Crude managed money net long positions rose again to the highest since March 2022 according to latest CFTC data. Combined net long positions for Brent and WTI increased by another +27k to 522k with WTI at a 19 month high and Brent at a six month high.
  • Russia has succeeded in avoiding G7 sanctions on most of its oil exports, as almost three quarters of all seaborne Russian crude flows in August have travelled without western insurance, allowing Russia to sell its oil above the $60/bbl price cap.
  • US oil production has seen some focus today. Chevron CEO Mike Wirthy has US production is being held back by inconsistent energy policy, with risks to market prices remaining more to the upside rather than the downside. Separately, oil is headed for $150/b unless the US does more to encourage exploration, according to Continental Resources CEO Dough Lawler.
  • WTI is -0.4% at $89.65, further away from resistance at $92.43 (Sep 19 high) but easily above support at $86.58 (20-day EMA).
  • Brent is -0.06% at $93.21, pulling further off resistance at $95.96 (Sep 19 high) but remaining easily above support at $90.89 (20-day EMA).
  • Gold is -0.5% at $1915.77, having come under strong pressure from a resurgent US dollar on a further large bear steepening in Treasuries as real yields surge higher. Support at $1901.1 (Sep 14 low) could start to be eyed as the yellow metal remains far below last week’s pre-FOMC high of $1947.5.
Energy BulletsCommodities
Energy BulletsCommodities

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