August 24. Oil accelerates growth amid favorable demand forecasts

On Tuesday, oil prices continued to rise thanks to upbeat demand forecasts. During the day, Brent quotes rose to $70 per barrel. The price of WTI crude oil rose to $67.25 per barrel.

Demand forecasts are improving amid the suspension of production at one of the drilling rigs in Mexico and full US approval of the coronavirus vaccine developed by Pfizer and BioNTech.

On Sunday, a fire broke out on an oil platform off the coast of Mexico, as a result of which production was suspended in the amount of 421 thousand barrels per day, or about a quarter of the country's total production.

Additional support for the «black gold» is provided by the approval of the US Food and Drug Administration (FDA) for the use of the coronavirus vaccine for people over 16 years of age. Authorities hope the news will further boost vaccination adoption.

This week, oil market participants are awaiting data on fuel reserves in the United States. Analysts predict a decrease in oil and gasoline reserves, as well as an increase in distillate stocks.

August 27. Oil continues to rise as a storm approaches the Gulf of Mexico

At the end of the week, oil prices continue to rise amid an approaching storm in the Gulf of Mexico. Investors fear that major supply disruptions could reignite in the market as energy companies cut production in the Gulf ahead of the weekend.

As a result, Brent quotes rose to $71.50 per barrel on Friday, while WTI rose to $69 per barrel.

Additional support for the oil market is provided by the expectation that OPEC + may resist the increase in production, given that the new strain of the delta coronavirus has affected oil demand.

An important factor for the further dynamics of oil will be the results of today's speech by the head of the US Federal Reserve in Jackson Hole, since they will have a strong impact on the dollar rate. Market participants expect Jerome Powell to give signals regarding plans to cut the bond buying program in the 4th quarter.

September 2. Why is Bitcoin unable to overcome the $ 50K level?

The calm that was observed on Wall Street at the end of August also affected the cryptocurrency market: Bitcoin stabilized below $50,000 after its rally. Recall that from January to mid-April, the most popular digital currency rose to $60 thousand, subsequently falling below $30 thousand.

The reason for the inactivity of bitcoin today can be called the fact that investors are switching to other currencies on the crypto market. In particular, according to CoinShares, in August, the inflow of funds to Ethereum funds amounted to $22.4 million, and the inflow to Cardano funds (which has a blockchain platform similar to Ethereum) amounted to $18.7 million. the growing popularity of non-fungible tokens (NFT). Basically, NFTs are digital assets similar to Bitcoin, with the only difference that each NFT is unique.

On the largest exchange NFT OpenSea, the volume of token trading over the past 30 days amounted to $3.5 billion, while until August, the total trading volume since its foundation in 2016 was about $1 billion.

Interest in NFT was also boosted by news that two large American companies, Visa Inc and Facebook Inc, have taken steps in this market. Visa acquired NFT under the name CryptoPunks, and Facebook said it is considering building services for NFT in its new digital wallet.

September 06. The European market started the week with growth

On Monday, European stock indexes showed a rise on the background of an increase in industrial orders in Germany, as well as a disappointing employment report in the United States, which indicated a delay in tightening the Fed's monetary policy.

In particular, the DAX index in Germany rose to 15,900, the CAC 40 in France rose to 6,746, and the British FTSE 100 – to 7,191.

The positive sentiment was helped by the news that orders for German industrial goods unexpectedly increased by 3.4% month-on-month in July, reaching a maximum. Analysts had expected that the volume of orders would decrease by 1.0% compared to the previous month.

Also, investors are still «digesting» Friday's US employment report, which showed a much smaller increase in the number of vacancies in August than expected. The number of jobs outside the agricultural sector increased at the lowest pace since January – by only 235 thousand, while analysts expected an increase of 750 thousand. The unemployment rate fell from 5.4% to 5.2%, as expected. These statistics delayed the timing of the reduction of the Fed's bond-buying program, while the US central bank is assessing the economic impact of rising Covid infections.

On Thursday, it is worth paying attention to the results of the meeting of the Board of the European Central Bank, since it is expected that the regulator will discuss the issue of reducing incentives at the meeting. Recent reports indicate that inflation in the euro area has risen to a 10-year high (by 3%). And this may lead to a slowdown in the ECB's asset purchase program.

September 13. The consequences of the hurricane continue to support oil prices

The price of oil continues to rise at the beginning of a new trading week amid investor concerns about limited production in the United States due to Hurricane Ida, as well as amid expectations of improved demand.

Brent crude futures rose to $73.65 per barrel, WTI – by 0.7% to $70.47 per barrel. Both contracts touched their maximum values since September 3 during the session.

Recall that as a result of Hurricane Ida, about three quarters of production on the shelf of the Gulf of Mexico has been stopped since the end of August. This is about 1.4 million barrels per day, which is approximately equal to the entire production of Nigeria, an OPEC member. Additional support for oil prices was provided by the fact that more and more refineries in Louisiana are resuming operations, and this increased the demand for crude oil.

This week, we should pay attention to the likelihood of a revision of the forecast of oil demand by OPEC and the International Energy Agency (IEA). The fact is that the increase in the incidence of coronavirus may force OPEC to revise its demand forecast for 2022 downward.

September 10. Experts predict an early recovery of the cryptocurrency market

Analysts note that Bitcoin and Ethereum can win back the fall within ten days and grow to $48500 and $3630, respectively, despite the ongoing investigation of the US Securities and Exchange Commission (SEC) and the problems in El Salvador. The current price of Bitcoin is $46180, Ether – $3407.

According to forecasts, by the end of next week, the price of Ether may reach $3630, and the current price can be considered quite acceptable for purchase. In this case, the stop order should be placed at the level of $3250. Analysts emphasize that significant support levels have been reached in Ethereum, from which a new growing trend will be formed further.

The decline in the cryptocurrency market observed this week was caused by several factors. Bitcoin sank by more than 10% after El Salvador declared this coin an official means of payment. This led to the fact that rating agencies lowered the country's already low credit rating, and pointed to increased risks in the insurance industry of El Salvador. Moreover, the World Bank supported the position of rating agencies and refused to provide support to El Salvador in the field of using cryptocurrencies.

Another factor of pressure on the crypto market was the SEC investigation against one of the largest decentralized crypto exchanges, Uniswap. In addition, the SEC threatened the American cryptocurrency exchange Coinbase with a lawsuit due to the launch of the Lend lending service by the platform.

September 16. JPMorgan: S&P 500 to grow another 6% by the end of the year

Despite the fact that some Wall Street firms are lowering their forecasts for stock market growth by the end of the year, JP Morgan, on the contrary, raised expectations for the S&P 500 from 4,600 to 4,700 (which is 6% more than the current values) and maintained a «bullish» stock forecast. The current index value is 4480. In 2022, the index value is expected to reach 5000 points.

According to the investment bank, the pace of economic growth has slowed due to concerns about a new delta strain of coronavirus, which is temporary.

JP Morgan experts explain their optimism that Covid is beginning to weaken in the world, and the upward momentum in the economy will continue in 2022, as enterprises will begin to restore depleted reserves and increase capital expenditures after historically low levels.

At the same time, other large organizations such as RBC, Morgan Stanley and Goldman Sachs suggest that it is necessary to prepare for the correction of the S&P 500 index to 10%. And the biggest risk for the market by the end of the year may be the threat of an increase in corporate taxes. However, JP Morgan also disagrees with this – the bank's experts believe that a strong change in the income tax rate is unlikely.

September 21. Oil is getting more expensive amid several factors

On Tuesday, oil prices are showing growth, reaching a daily high at $75.17 per barrel. The current Brent quote is $74.65 per barrel, the price of WTI oil rose to the level of $70.92 (a maximum of $71.47 per barrel).

The main support for prices is provided by signals of a reduction in the supply of fuel in the United States. Utilities around the world are switching to fuel oil due to rising gas and coal prices (since production in the Gulf of Mexico has not yet fully recovered after Hurricane Ida), which will inevitably lead to a decrease in supply.

Market participants are also waiting for the results of the upcoming meeting of the US Federal Reserve, at which the regulator may announce the start dates of monetary policy tightening. And this can reduce the attractiveness of such a risky asset as oil.

In addition, the market may see an increase in demand for oil after the US announced the lifting of the travel ban for vaccinated foreign travelers in early November.

September 22. IFO lowered the forecast of German GDP growth to 2.5%

The German Economic Institute IFO today announced a reduction in the growth forecast of Europe's largest economy for 2021, as disruptions in supply chains and a shortage of intermediate goods slow down the German recovery.

The IFO now believes that German gross domestic product growth will be 2.5% in 2021, which is 0.8 percentage points lower than the previous forecast, and 5.1% next year, which is 0.8 percentage points higher than the previous forecast.

Timo Wolmersheuser, chief economist at Ifo, noted that a confident economic recovery after the coronavirus crisis (which was initially expected in the summer) is being postponed. Industrial production is currently declining due to bottlenecks in the supply of important intermediate goods. At the same time, service providers are actively recovering from the crisis, Wolmersheuser added.

September 27. Apple and Tesla stopped production in China because of the energy crisis

The shortage of electricity in China, which arose against the background of limited coal supplies and stricter emission standards, stopped production at many factories, including at some Apple and Tesla enterprises.

According to local media, since last week, rationing for electricity consumption during peak hours has been introduced in many parts of northeast China. China, as the world's largest consumer of energy and a source of greenhouse gases, aims to bring carbon emissions to zero by 2060. And for this, in 2021, the Chinese authorities intend to reduce the energy intensity by about 3%.

It is reported that the provincial authorities have strengthened measures to limit emissions in recent months. And this decrease in energy supply affects producers in the key industrial centers of the eastern and southern coasts. About 15 Chinese companies and 30 Taiwanese companies have already announced that production was stopped due to capacity restrictions. The steel, aluminum and cement industries suffered the most.

As a result, many analysts have come to the conclusion that they should revise their forecasts for China's GDP for 2021. In particular, Nomura lowered its forecast for the third and fourth quarters to 4.7% and 3.0%, respectively, from 5.1% and 4.4%, and the annual forecast-to 7.7% from 8.2%.

October 01. OPEC+ is considering options for a greater increase in production

On Monday, October 4, the leaders of OPEC+ countries will meet to discuss the oil production deal and the conditions for its possible revision. The organization is considering the possibility of increasing the volume of production more than stipulated by the current agreement. Since July, the countries adhere to the volume of 400 thousand barrels per day.

Some sources claim that the increase in production may even amount to 800 thousand barrels per day for one month, after which production volumes will return to previous indicators. The next month in which an increase may occur is November, since October oil production volumes have already been agreed at the last OPEC+ meeting.

In anticipation of the OPEC+ meeting, oil prices began to decline. The current Brent quote is $77.83 per barrel, although more recently the cost of a barrel of oil fluctuated around $80 per barrel. WTI oil prices also declined to $74.50.

September 30. The energy crisis in China has hit the industrial sector

Amid the protracted energy crisis in China, small companies have begun to switch to diesel power generators or even stop working. In this regard, the Coal Industry Association expresses concerns about stocks ahead of winter.

Analysts note that China is facing the most severe energy crisis in recent years – power outages have affected a significant part of the country. Problems with electricity supplies caused by a jump in coal prices have been going on for the second week.

As you know, coal is the main source of electricity in China, and today its cost is kept near a record level amid a shortage of supply and strong demand from industrialists. Owners of many companies report that they are suffering unprecedented losses, and the official Purchasing managers Index (PMI) for China's manufacturing sector has fallen below 50 points for the first time since February 2020.

The Chinese Coal Industry Association warns of a low level of coal reserves at power plants and a possible shortage in the winter months, and asks companies to make every effort to increase supplies.

September 29. Analysts suggest that Evergrande may become another «black swan»

Analysts note that, despite the fact that it is almost impossible to predict the appearance of «black swans» (since these are unexpected anomalous events), this time China and the default of the developer Evergrande may become the source of the global economic shock.

One of the most striking examples of the «black swan» is the coronavirus that came from China, the pandemic of which could not have been predicted. This time, the Celestial Empire may again become the birthplace of the next «black swan».

However, there are those who do not share this point of view. For example, Nouriel Roubini, professor of economics at New York University, who predicted the global economic crisis in 2008, said that he did not see any «black swans» in the short term. At the same time, the professor does not exclude the presence of some financial risks that may still cause a global crisis in the next 3-5 years.

According to Roubini, the soft monetary and fiscal policies of developed countries have led to the inflation of bubbles in financial markets. As the most obvious example, the professor cites cryptocurrencies, and the explosion of such a bubble may well cause turmoil in global markets.

There is also an opinion that the possible default of one of the largest Chinese developers Evergrande will only lead to a decline in demand for commodities and undermine the confidence of international investors in the Chinese real estate market.

October 5. Bitcoin has again overcome the level of $50 thousand

The cost of bitcoin on Tuesday exceeded the $50 thousand mark for the first time since September 7. Over the past day, the price has increased by 5%, and over the week – by 18%. The current quote of the most popular cryptocurrency is $49,785.

During September, bitcoin tried several times to gain a foothold above the $50 thousand mark. On September 7, the cryptocurrency fell amid a large sale of shares of companies related to cryptocurrency and blockchain. During the month, bitcoin continued to fall, reaching a low of $40,596 dollars on September 21.

And now the «bullish» sentiment has returned to the cryptocurrency market. Analysts believe that the trend change is due to the growing investor confidence in this asset class and more flexible statements by the Fed and the U.S. Securities and Exchange Commission. Recall that Fed Chairman Jerome Powell, in his recent speech to Congress, said that the regulator does not intend to ban cryptocurrencies.

The growth of bitcoin has pulled the rest of the crypto market along with it. Many cryptocurrencies have also risen in price today. Moreover, there was an increase in the shares of cryptocurrency companies such as Marathon Digital Holdings, Riot Blockchain and Bit Digital.

October 8. September Nonfarm Payrolls – what to expect?

Today, markets are waiting for an important report on employment outside of US agriculture in September. According to forecasts, the economy has created more than 500 thousand jobs, and the unemployment rate has fallen to at least 5.1%.

Why is this report important and how can it affect the dynamics of the US dollar?

Ahead of the publication, the dollar remains relatively stable against most of the leading currencies. At the same time, government bond yields resumed growth, as the September peyroles may strengthen the determination of the US Federal Reserve to soon wind down the asset repurchase program.

However, the regulator is already quite determined: in his last statement, Fed Chairman Jerome Powell said that the curtailment could begin as early as November, and a strong employment report is not a prerequisite. Thus, even a relatively weak report will only lead to a temporary drawdown of the US dollar. Moreover, a decrease in the unemployment rate to 5% can compensate for any weakness in employment statistics.

While waiting for the report analysts share their forecasts. The following arguments are in favor of strong data:

-earlier, ADP announced the creation of 568 thousand jobs;
-the index of business activity in the manufacturing sector from ISM increased from 49.0 to 50.2;
-The consumer confidence index from the University of Michigan has recovered;
-the number of initial applications for unemployment benefits decreased, as did the total number of people receiving benefits.

The following arguments can be made in favor of a weak report:

-the index of business activity in the service sector from ISM decreased from 53.7 to 53;
-The Conference Board consumer confidence index fell to a 7-month low;
-Challenger reported a 13.8% increase in the number of layoffs (from a 24-year low).

October 12. Europe began to save on gas

According to the Parisian consulting company Engie EnergyScan, gas consumption in Europe fell by 12% compared to the pre-pandemic level. The industrial sector has begun to reduce demand for natural gas, as record prices have made fuel too expensive for many consumers.

Germany, the Netherlands and the UK have so far reduced consumption the most, but analysts predict that this trend will continue, especially when the demand for gas for heating increases in the winter months.

There is also an opinion that high gas prices may slow down the economic recovery in Europe, as industrial consumers suffer from high fuel costs. Some enterprises were forced to temporarily cease their activities, while others were forced to significantly reduce production volumes.

Recall that the cost of gas in Europe has reached a historical record, getting almost close to the level of $2,000 per thousand cubic meters in early October. Then, after the words of Russian President Vladimir Putin about the possibility of increasing fuel supplies, gas began to become cheaper. The current price of natural gas is $1018.62.