Oil Lowest Since February Promoting Peak Inflation

MARKETS

US equities slipped on Thursday as mixed earnings outlooks and more hawkish Fed official commentary offered little encouragement to investors ahead of today’s US Non-Farm Payroll. A return in US-China tensions also weighed on sentiment following headlines that 22 Chinese Air Force planes entered Taiwan’s air defence zone and crossed the Taiwan Strait median line.

Still, market exhaustion and nonfarm payroll anticipation were common themes among markets during the reasonably quiet New York session on Thursday.

OIL

The most meaningful read-through from this week is the oil markets’ newfangled predisposition to treat the bearish news as overly bearish and discount good news.

The deteriorating demand picture in the US seemingly justified the downswing despite OPEC’s reluctance to deploy strategic spare capacity.

FOREX

Risk traded firm into the NY afternoon, assisting EM FX outperformance.

In G10, GBP tumbled despite the Bank of England’s most significant rate hike of 50bp since 1995 and the reasonably hawkish short-term guidance but retraced most of the move throughout the rest of the New York session.