U.S. oil reserves shrink - 24.5.2023

On Tuesday, the US dollar index rose. This was facilitated by the opinion of the Federal Reserve Bank of St. Louis President James Bullard and Reserve Bank of Minneapolis President Neel Kashkari that the Fed should continue to tighten monetary policy if high inflation persists. Some market participants now do not even rule out an increase in the Fed rate to 5.5% from 5.25% at the next meeting on June 14, but the likelihood of this is small. High rates have a positive effect on the US dollar. This morning, the Reserve Bank of New Zealand raised the rate to a 14-year high of 5.5% from 5.25%. The New Zealand dollar has now collapsed powerfully, as now this rate level will be maintained for at least 12 months, regardless of the economic situation. Britain released inflation data for April. It fell to 8.7% y/y from 10.1% y/y in March. This is a little better than expected. Yesterday's economic data in the US turned out to be neutral. Preliminary S&P Global Manufacturing PMI for May again fell below 50 points and amounted to 48.5 points (lowest since February). New Home Sales in April were better than expected (the highest since August 2022). A significant risk for the US currency is the need to increase the U.S. Government debt ceiling above its current $31.4 trillion. This issue is now being actively discussed and a decision should be made before June 1.

Bitcoin quotes have been in a trading range for 9 weeks with approximate borders of $30,500-26,500. In general, this may not be bad, since against the background of the stagnation of the crypto market, almost all countries develop and approve the rules for its regulation. Note that since June 1, Anti-Money Laundering (AML) rules for crypto transactions are being tightened a little in Japan.

Yesterday, the American stock indices significantly declined. Investors reacted negatively to statements from Federal Reserve representatives about possible continued tightening of monetary policy and rate hikes. It is worth noting that the Fed's target inflation rate is only 2% y/y, while the actual inflation in April was 4.9% YoY. Another negative factor for corporations was the large budgetary expenses and the need to increase the U.S. debt ceiling. Zoom Video Communications reported a slowdown in quarterly revenue growth, causing its stocks to plummet by 8%. Today in the U.S., financial reports and other information are expected to be released by NVIDIA Corporation, Snowflake, Kohl's Corp, and other companies. The materials from the May meeting of the Federal Open Market Committee (FOMC) Minutes will also be published.

On Tuesday, oil prices experienced a significant increase. There were several reasons for this. One positive factor was the announcement from the independent American Petroleum Institute about an unexpected decrease in U.S. oil inventories by 6.8 million barrels during the week. This marks the largest decline in the past six months. Additionally, May 29th is Memorial Day in the U.S., which traditionally leads to an increase in travel and gasoline demand. OPEC+ is also not ruling out further production cuts at the meeting on June 4th. The increase in the U.S. debt ceiling may provoke a rise in dollar inflation.

In Europe, natural gas on the ICE Dutch TTF plummeted to $320 per 1000 cubic meters, approximately a two-year low. American gas prices on Henry Hub slightly decreased to $2.488 per mmBtu. The recent low and a strong support level are at $2.