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Significant concerns regarding U.S. oil reserves are causing a sharp rise in oil prices. Brent and WTI both gain over 3% today, due to further cuts from OPEC+ and the risk associated with excessively low reserves at the U.S. oil hub in Cushing.
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High oil prices may suggest that inflation will return rapidly, which could mean a continuation of rate hikes in the U.S. and other parts of the world, leading to a "controlled recession."
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The U.S. dollar is very strong. EURUSD drops to 1.0500 level. USDPLN rises to 4.40. U.S. bond yields increase to nearly 4.60%.
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Kashkari, from the Minneapolis Fed, expressed uncertainty about whether the central bank has finished its rate hikes, pointing to the ongoing strong economic climate. Kashkari also hinted at the possibility of more than one rate increase.
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Only NOK and CAD benefit from the strong oil trend among the G10 currencies.
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Gold loses value due to the strong dollar and falls by 1.2%, going below 1880 USD per ounce.
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Despite initial gains in European and American indices, the sentiment significantly deteriorated. DAX ends 0.25% down, while U.S. indices continue their previous sell-off, being even 0.5% lower.
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Fitch expects a slowdown in consumer activity, a sentiment echoed by Moody's. Given issues with U.S. government employment and rising interest payments on the vast U.S. debt, a potential rating cut by Moody's cannot be ruled out.
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Cryptocurrencies remain relatively stable. Stronger gains during the first part of the day were erased after the Wall Street session opened. Bitcoin is slightly down, while Ethereum is up by 0.20%.
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During today's testimony of SEC Chairman, Gary Gensler, before Congress, Gensler acknowledged that Bitcoin is not a security, but he also declined to confirm that it is a commodity.
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