European stock markets closed mostly lower in anticipation of tomorrow's ECB decision and Friday's U.S. inflation reading, which if it comes out above expectations could raise central banks' hawkish rhetoric, choking off economic growth. Although there will be no rate hike tomorrow, there may be a clear communication of the path of the hike. In that case, the decision will be considered hawkish. The Dax lost 0.76% and the FTSE 100 was off 0.08%. Indices on Wall Street trade reasonably lower too.
Crude oil rose today to the highest levels since March. Prices were spurred mainly by news from the UAE that OPEC is having trouble restoring production. The UAE believes the price is not yet close to its peak.
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Open real account TRY DEMO Download mobile app Download mobile appOil inventories unexpectedly rose in the U.S., but the significant increase in imports is puzzling. Prices reacted with declines, but later recovered to higher levels. WTI is trading around $122 per barrel.
Gas prices rose today through the early part of the day, but then fell sharply. The reason is most likely the explosion at the Freeport export terminal in the US. This terminal was responsible for gas exports of 2 billion cubic feet per day.
The Turkish lira continues to lose heavily and is very close to historic highs, looking at the USDTRY pair. The next decision is not until 2 weeks from now, but already this week Erdogan indicated again that he expects a further cut in interest rates, from the current level of 14%. Recall that inflation in Turkey has broken through another level and is already at 73.5% y/y in May. Given the recent weakening of the lira, there is a chance that capital controls may be introduced. Additionally, Erdogan is blocking NATO enlargement
Ukraine said that there is still no agreement with Russia and Turkey on unblocking Black Sea ports
