Crude Oil Price Eases After Solid Rally as US Dollar Eyes the Fed Ahead. Higher WTI?
Crude Oil, WTI, Brent, US Dollar, China, AUD/USD, CPI, RBOB Crack Spread - Talking Points
- WTI crude has softened as markets jockey for position leading up to the Fed
- APAC equities are mixed as details of China’s stimulus measure remain opaque
- The RBOB Crack spread might be saying something. Will WTI trend north?
Interest rate markets and economists are anticipating a 25 basis point hike but the post-decision press conference will be watched closely for clues on the Fed’s rate path going forward.
Treasury yields and Wall Street equity index futures are little changed as the suspense builds for today’s FOMC.
Risk assets in general were on the backfoot going into the European session. APAC equities have had a mixed day with Chinese stocks giving up a notable portion of yesterday’s gain.
Markets appear to be waiting for clarification from Beijing on the exact nature of stimulus measures alluded to at the Politburo meeting over the weekend.
A bright spot has been the tech-laden KOSDAQ which added more than 1.5% today.
Headline Australian CPI was 6.0% year-on-year to the end of June, missing forecasts of 6.2% and against 7.0% previously.
Overnight, the American Petroleum Institute (API) inventory report showed a drop of -1.319 million barrels for the week ended July 21st. Later today the official Energy Information Agency (EIA) data will reveal the change in US stockpiles for the same period.
Potentially lending some support to black gold is the RBOB crack spread that has ticked up again this week. The RBOB crack spread is the gauge of gasoline prices relative to crude oil prices and reflects the profit margin of refiners.
The WTI futures contract is nearing US$ 79 bbl while the Brent contract is a touch above US$ 83 bbl.
Aside from the FOMC rate decision, the US will also see a series of housing data.
The full economic calendar can be viewed here.
WTI CRUDE OIL AND RBOB CRACK SPREAD
--- Written by Daniel McCarthy, Strategist for DailyFX.com
Please contact Daniel via @DanMcCarthyFX on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.