1. Fed sees ‘more restrictive’ policy as likely if inflation fails to come down

6 July 2022

Federal Reserve officials at their June meeting said another interest rate increase of 50 or 75 basis points is likely at the July meeting, according to minutes released Wednesday. Policymakers “recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist,” the document said. Officials at the June14-15 meeting remarked that they needed to make the move to assure markets and the public that they are serious about fighting inflation.

Source: CNBC

2. ECB Officials Feared 'Persistent' Inflation at June Policy Meeting

7 July 2022

European Central Bank policymakers were worried that inflation would remain "persistent" for some time as they laid out a path for upcoming interest rate hikes, according to minutes from their June policy meeting in Amsterdam. Most officials agreed to raise borrowing costs by 25 basis points at its next meeting this month, arguing that this moderate increase would lead to a more orderly market reaction in an environment of high economic uncertainty. However, a number of policymakers still argued for "keeping the door open" for a larger initial uptick in rates in July, saying the central bank should not make an "unconditional commitment" to a 25 basis point hike.

Source: Reuters

3. U.S. Oil Inventories Unexpectedly Jumped 8 Million Barrels Last Week

7 July 2022

U.S. crude oil inventories rose unexpectedly last week, according to the Energy Information Administration. The unexpected spike could stoke fears about demand. Crude oil inventories jumped 8.2 million barrels against expectations for a draw of 1.04 million barrels. The data were released Thursday, a day later than normal because of the U.S. market holiday earlier this week. Distillate stocks declined by 1.266 million barrels. The expectation had been for a build of 1.133 million barrels. Gasoline inventories dropped 2.497 million barrels against expectations for a draw of 0.480 million barrels.

Source: Reuters

4. China May oil imports from Russia soar to a record, surpass top supplier Saudi

6 July 2022

China's crude oil imports from Russia soared 55% from a year earlier to a record level in May, displacing Saudi Arabia as the top supplier, as refiners cashed in on discounted supplies amid sanctions on Moscow over its invasion of Ukraine. Imports of Russian oil, including supplies pumped via the East Siberia Pacific Ocean pipeline and seaborne shipments from Russia's European and Far Eastern ports, totalled nearly 8.42 million tonnes, according to data from the Chinese General Administration of Customs. That's equivalent to roughly 1.98 million barrels per day (bpd) and up a quarter from 1.59 million bpd in April.

Source: Reuters

5. Australia forecasts record mining, energy export sales for 2023

4 July 2022

Australia's mining and energy export revenues are forecast to climb 3% to a record A$419 billion ($286 billion) in the year to June 2023, buoyed by surging coal and gas prices in the wake of Russia's invasion of Ukraine, the government said on Monday. Sanctions on Russia for what Moscow calls a "special military operation" to disarm Ukraine have sent prices for liquefied natural gas (LNG) and coal to all-time highs, underpinning record revenue for Australia's second- and third-largest exports.

Source: Reuters

6. Metals melt down as recession fears overwhelm supply woes

4 July 2022

Industrial metals have gone from boom to bust in the space of only three months. In March the London Metal Exchange (LME) suspended its nickel contract after the price spiked to more than $100,000 per tonne. Three-month nickel is now trading around $22,500, pretty much back where it was before the descent into chaos. Copper, aluminium, zinc and tin all hit record price highs in March. Lead was the only LME base metal to miss out on the super-bull party. After the March melt-up, however, industrial metals are now in meltdown. The LME Index has just experienced its sharpest quarterly fall since the global financial crisis.

Source: Reuters

7. Banks step up trade finance in global commodities boom

4 July 2022

Major banks are ratcheting up funds for the global commodities trade as Russia’s war in Ukraine drives up prices for everything from crude oil to corn. Lenders including ING Groep NV and Mitsubishi UFJ Financial Group Inc. are heeding traders’ calls for cash, providing lines of credit to pay for the goods they truck and ship to customers. That’s a turnaround from 2020, when a series of scandals and heavy losses prompted ING and others to scale back their exposure to the industry. Trade finance is the lifeblood of the commodities industry, which needs access to hundreds of billions of dollars in credit to fund the buying, blending, storing and transporting of raw materials. With prices surging amid the war in Ukraine — and supply routes disrupted by the conflict and the pandemic — traders are clamoring for additional funds to pay for shipments of grains, metals and fuels.

Source: Bloomberg