US-China to resume trade talks at G20, US Fed holds rates steady signalling possible future rate cuts & rally in crude after President Trump’s warning to Iran

15th June – 21st June

1. US Federal Reserve signalled a rate cut this year

June 20, 2019

The US Federal Reserve signalled a possible interest rate cut as early as next month. In its meeting held last week, the Fed kept interest rates unchanged in the 2.25% to 2.50% range but signalled its readiness to ease the policy. Fed Chairman Jerome Powell suggested that the Central Bank may look at cutting interest rates in the near future in order to tackle the various threats to U.S. economic growth.

Source: Business Line

2. Oil rallied after President Trump’s warning to Iran over attack on a drone

June 21, 2019

Geopolitical tensions mounted after President Donald Trump’s warning that Iran made "a very big mistake" after it boasted of downing a US spy drone. Iran shot down a US drone near the Strait of Hormuz, a major choke point for world crude shipments, which raised fears of a confrontation that could badly stop world crude oil supplies.

Source: Business Standard

3. Aluminium producers' seek an import duty hike to prevent the domestic industry from dumping

June 16, 2019

The Aluminium Association of India (AAI) and FICCI have informed the government that the aluminium sector is going through a challenging phase and is under threat by rising dumping from China and Japan, which is resulting in a drop in the domestic market share. Aluminium product duties need to be increased to 12.5% from the existing 10%.

Source: Moneycontrol

4. Cotton and Soybean planting is affected due to delayed monsoons

June 17, 2019

Delayed monsoons have affected sowing activity this year. Farmers have so far planted summer-sown crops on 8.22 million hectares (20.3 million acres), down 9 percent compared with the same period a year ago. Cotton sowing is down 9.4 percent, while soybean planting has lagged by 51 percent during the period, according to provisional data from the Ministry of Agriculture.

Source: Money control

5. China and the United States to resume trade talks ahead of a meeting at the G20

June 18, 2019

A telephone call between Presidents Trump and Xi on Tuesday has led to a confirmation that the two will meet in Japan on the sidelines of a G-20 meeting. China hopes that U.S. officials would bring a problem-solving attitude to renewed trade talks. China, which previously declined to say whether the two leaders would meet, confirmed the get-together.

Source: Reuters

6. U.S. crude stocks fell 3.1 million barrels against market expectations of a draw of 1.1 million barrels

June 19, 2019

According to the Weekly Crude Oil Inventory Report released by EIA on Wednesday, U.S. crude stocks fell 3.1 million barrels last week, compared with analysts’ expectations for a draw of 1.1 million barrels. Crude oil futures were mostly steady as prices received support from a larger-than-expected decline in U.S. crude inventories. 

Source: Reuters

7. Gold prices rallied more than 5 years after Fed meeting

June 20, 2019

US Federal Reserve indicated a readiness to cut interest rates and this has supported the gold prices. Gold rallied above $1,400 post the Fed meeting, as low interest rates will support precious metals. Slowing global growth due to the fallout from the U.S.-China trade dispute and global central banks’ adopting a more dovish tone is supporting precious metals since the last two months.

Source: Live Mint

8. OPEC members are meeting next week to decide on production levels

June 19, 2019

OPEC members are meeting on July 1 and 2. OPEC and Russia have been busy trying to assure the markets that they would be working to re-balance the oil market. It is widely expected that OPEC is set to extend production-cut deal despite a disagreement among allies. OPEC and its allies have a deal to cut crude oil output by 1.2 million bpd from January 1, 2019.

Source: Oil