Crude oil has recently plunged, although the weekly increase in EIA crude oil inventory data hit a new 9-month high, reflecting the deterioration of the crude oil market environment. However, benefiting from the market short-selling phenomenon and the Federal Reserve keeping interest rates unchanged as expected, the dollar fell slightly, and oil prices completed a rebound against the market during the day.
The Fed made its first monetary policy decision of the year this week: keep interest rates unchanged.
While the Fed had long been widely expected to keep interest rates unchanged, investors have watched closely from the details of the policy statement to see whether recent concerns surrounding the decline in China's economy and oil prices have influenced the Fed's assessment of the state of the U.S. economy.
The recent strengthening of the dollar ahead of the Fed's interest rate hikes plan has made it difficult for the Fed to try to raise rates slowly with little adverse effect on the economy. However, in this statement, the Fed still expects the decline in energy prices and the strengthening of the US dollar to be only temporary, and inflation will rise in the medium term.
To the great surprise of the market, the Fed's interest rate decision did not mention China, and the recent sharp fluctuations in China's stock market and RMB exchange rate have attracted the attention of global investors.
The statement suggests that if market turmoil and slowing global growth continue or worsen, the Fed may change its plans to continue raising interest rates this year, but officials are not ready to pause rate hikes.
At last December's meeting, the Fed came in for the first rate hike in nine years. The Fed planned to raise rates four times this year in December, each by 0.25 percentage points. Investors and traders believe that the actual number of rate hikes will be much less. If the Fed raises interest rates as planned, it will rise to 1.375% by the end of the year; while the futures market trend shows that the expected rate will be 0.605% by December this year, which means that the Fed will only raise rates once, and even this time uncertain.
Fed Chair Janet Yellen, who now has a busy schedule, will testify before Congress in February and attend a major policy meeting on March 15-16. Central bankers will then weigh whether to raise the benchmark rate again.
Here is the full text of the statement issued after the Fed's January 26-27 monetary policy meeting:
Information obtained by the Federal Open Market Committee (FOMC) since its December meeting shows that job market conditions have improved further despite a slowdown in economic growth at the end of last year. Household spending and corporate fixed investment have been growing modestly in recent months, with further improvements in the property market, but net exports are weak and inventory investment has slowed. A range of recent job market indicators, including strong job growth, show a further reduction in the underutilization of employment resources. Inflation remains below the Committee's 2 per cent longer-term target, in part due to lower energy prices and lower import prices for non-energy products. Market-based inflation compensation measures have slipped further, with some surveys showing that longer-term inflation expectations have been largely unchanged in recent months.
The Commission maintains the existing policy of reinvesting institutional bonds and institutional MBS repatriation principal into institutional MBS, as well as continuing to extend the maturity of its public bonds through tender purchases. The committee expects to do so for some time as it normalizes the level of the federal funds rate. The Commission's large, longer-term securities positions through this policy should help maintain accommodative financial market conditions.
The FOMC members who voted in favor of the Fed's monetary policy decision include: Fed Chairman Yellen, Vice Chairman Dudley, Governor Brainard, St. Louis Fed President Bullard, Governor Fisher, Kansas City Fed President George, Cleveland Fed President Mestre, Governor Powell, Boston Fed Chairman, and Governor Taruro.
Looking back at yesterday's sentiment trend, the price rose slowly in the Asian session, the price shock in the European session fell to a new low within the day, and the price rose rapidly in the US session to create a new intraday high.
Oil from the four-hour chart, although the short-term moving average runs towards the running but the moving average system is generally a bearish trend and the previous high and the 270-day moving average on the same horizontal line K line price runs below the previous high, the RSI indicator turns downward convergence, the CCI indicator turns downward, comprehensively the K line price is strongly suppressed by the previous high and the downward momentum is sufficient, it is expected that the price will run downward in the later period.
Asian and European Disk Recommendations:
1, 204-5 long, stop loss 201, target to see 210-13, large amount of funds can be opened in batches, 207-08 can be light position first.
2,215-6 short, short light position can be, stop loss 2,5 points can be, see 3-5 points. If the market breaks through the pressure line quickly, cancel this strategy.
3, break through the trend line retracement to confirm to do more, the specific operation method please consult me.
【Why does EIA bearish crude oil not fall but rise】
International oil prices on Wednesday night, the U.S. Energy Information Administration (EIA) announced a sharp increase in crude oil inventories for the week. EIA crude inventories recorded an increase of 8.383 million barrels for the week ended January 22, compared with an expected increase of 3.277 million barrels and a previous increase of 3.979 million barrels. Crude oil inventories are now rising to their highest level since 1930. After the release of EIA data, oil prices reappeared and crude oil inventory data "reverse" the market, the United States WTI and Brent crude oil prices have risen in the short term, not falling but rising. Chenqian takes you to analyze why the data is bearish for crude oil and does not fall but rises.
1. Iraq said it may be willing to rebound after the production cut
Today, Iraqi Oil Minister Mahdi said that if other oil producers are willing to cut production, then Iraq is also willing to cut production, and Mahdi believes that Saudi Arabia and Russia should be more flexible in reducing production, and then cloth oil rebounded more than 2%, while US oil also rebounded more than 2%; in the current low oil price environment, any talk about production cuts is enough to make investors short to make up for it, thus temporarily boosting oil prices.
2. The number of wells drilled has decreased
Oil services company Baker Hughes released data showing that the number of active U.S. oil rigs fell by five to 510 last week, the lowest since April 2010.
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【Article Statement】
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