The New York Stock Exchange closed with a decline. The stock markets, which recovered from the sharp sell-off in early August with positive data last week, closed yesterday's trading day with a decline. In money markets, it is considered certain that the Fed will cut interest rates in September, and the speech of US Federal Reserve (Fed) Chairman Jerome Powell at the Jackson Hole Economic Policy Symposium on Friday is awaited for more clues on the path of the interest rate cut. While the statements of other Fed officials are also being followed, Fed Board Member Michelle Bowman stated that they made significant progress in reducing inflation last year and that they have seen more progress in this area in recent months. Noting that she still sees some upward risks in inflation, Bowman stated that the bank will continue to be cautious about making changes to its current policy. Underlining that wage increases continue to remain above a pace consistent with the inflation target, Bowman stated that while being careful against the risk of a significant weakening in the labor market, close attention should be paid to price stability. Let me state that the foreign trade balance in Japan will be monitored today with the minutes of the Fed Federal Open Market Committee (FOMC) meeting.
European stock markets also finished the second trading day of the week with a decline. Investors in Europe responded negatively to the uncertainties regarding the economic outlook. Banking sector stocks traded in the Stoxx Europe 600 fell by 1.25 percent and oil and gas sector stocks fell by more than 2 percent. The Swedish Central Bank lowered its policy rate by 25 basis points to 3.50 percent.
The GBPUSD parity is trading at $1.30259 this morning. When I evaluate the Sterling dollar parity in the short term, I would like to state that there has been a 1.31 percent increase as of this month, and the peak level of 1.30450 tested on July 17 has been equalized, and the new peak is 1.30532. Reminding once again that I base the up or down movements of the parities on the Dollar Index, we think that the speech that Fed Chairman Powell will give at the Jackson Hole symposium may also have an impact on the pricing of the parities. Technically, I will be following the 1.30850 - 1.31350 region in the Sterling-Dollar parity. In case of possible downward movements, it would be useful to underline the 1.29950 - 1.29450 support region once again.
When we look at refineries in the Americas, since their season is over and it is the holiday season, demand for gasoline and jet fuel is strong, but not spectacular. Of course, gasoline consumption has been above five-year averages since April and exceeded by 5% at one point. Jet fuel is in even better shape, exceeding this level almost all year on a four-week moving average basis and at one point being almost 30% higher. However, these comparisons are misleading. The five-year averages have experienced significant technical deviations due to the pandemic-affected years of 2020 and 2021. Subtracting these, U.S. jet fuel use has remained flat. Contrary to what some people say, inventories are not low.
The amount of crude oil in storage tanks is about 20 million barrels lower than the five-year average, or only -4.5%. However, if you exclude the inflated levels of the two Covid-19 years, which are also technical deviations, current inventories are only 4 million barrels lower than average. The small decline in total U.S. commercial oil stocks compared to the previous five years disappears when you remove the pandemic effect, leaving inventories about 2% higher. Oil processors are already looking ahead to the fall and are preparing to close their plants for conversions to produce winter fuels. This will temporarily affect crude purchases. But the real disappointment came from China.
Crude oil imports in the first half of the year were about 3% lower than in the same period in 2023. According to Eurasia Group, up to 800,000 barrels per day, or 7% of the total, are going directly to strategic stockpiles, adding to the pessimism. Geopolitical tensions are supporting oil prices for a while longer, but there doesn’t seem to be much room for OPEC+ producers to start reversing some of their October production cuts.
The ounce of silver is trading at $29,585 as of this morning. The ounce of silver is moving above the indicators I follow in the short term, and is up 7.33% in its performance over the past week. When you look at it, the ounce of silver is trading close to its highest levels in the last month, and it is not lost on you that it is very close to the psychological resistance of 30.00. As long as the positive trend continues, I will continue to monitor the 30.50 - 31.60 area in the upside zone. I believe that permanent pricing below the 29.00 - 29.20 area may be needed for the downward trend to come to the fore. I wish you a profitable day.
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