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Asian Stocks Slipped as The Dollar Advanced on Thursday

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Asian stocks slipped as the dollar advanced on Thursday after hawkish comments from Federal Reserve Chair Janet Yellen reinforced the case for an interest rate hike later this month.

Spreadbetters saw Britain’s FTSE .FTSE, Germany’s DAX .GDAXI and France’s CAC.FCHI opening down in line with Asian stocks.

Australian shares fell 0.6 percent and South Korea’s Kospi .KS11 shed 1 percent. Shares in Hong Kong, Malaysia and Singapore also declined.

Shanghai shares .SSEC bucked the trend and were last up 0.5 percent, brushing aside a Caixin/Markit Purchasing Managers’ Index showing China’s services sector growth cooling in November. Weak indicators often stir hopes of government stimulus, providing a burst of support for Chinese shares.

Japan’s Nikkei .N225 eased from 3-month highs and stood nearly flat, bound in narrow range as a wait-and-see mood prevailed ahead of the European Central Bank’s policy decision due later in the session.

Fighting stubbornly low inflation, the ECB is expected to deliver measures that could include a deposit rate cut and changes to its asset-buying program.

“The ECB’s decision will likely set the direction for the Japanese market tomorrow and beyond, but it’s also true that the market is seen overbought recently,” said Hikaru Sato, a senior technical analyst at Daiwa Securities in Tokyo.

MSCI’s index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.5 percent after Wall Street slid overnight on Yellen’s comments.

The Fed chair said Wednesday she was “looking forward” to a U.S. interest rate hike that will be seen as a testament to the economy’s recovery.

Her comments come after expectations for a Fed rate hike at the central bank’s Dec. 15-16 policy meeting were slightly shaken by poor manufacturing data released earlier in the week.

However, faith in the U.S. economy was partially restored by Wednesday’s stronger-than-expected ADP private employment report. ECONUS

The dollar index advanced to a 12-1/2-year high of 100.51 .DXY following Yellen’s comments and the upbeat data. It last stood at 100.13.

The euro dipped 0.2 percent to $1.0594 EUR= as the markets braced for the ECB.

“There is great potential for euro volatility as the ECB announces its policy decision, followed by the press conference by President (Mario) Draghi starting 45 minutes later,” wrote Sean Callow, a senior strategist at Westpac.

“Draghi and selected colleagues have clearly signaled that there is sufficient risk of undershooting the ECB’s inflation target to warrant further loosening of monetary settings.”

While the prospects of further ECB easing dogged the euro, expectations of added stimulus have lifted European stocks. The pan-European FTSEurofirst 300 index .FTEU3touched a 3-month high this week.

In commodities, crude oil bounced modestly on bargain hunting following a tumble overnight prompted by surging U.S. stockpiles and a stronger dollar.

U.S. crude CLc1 was up 1.2 percent at $40.43 a barrel after tumbling 4 percent overnight. Crude was still capped with OPEC widely expected not to opt for a production cut at Friday’s meeting despite a global supply glut.

Spot gold XAU= stooped to $1,045.85 an ounce, its lowest since February 2010. Higher interest rates would diminish the allure of non-yielding gold and a stronger greenback makes the dollar-denominated metal more expensive for buyers.

Industrial metals also remained under pressure amid global oversupply and shrinking Chinese demand, with spot iron ore prices plumbing 10-year lows this week.

Three-month copper on the London Metal Exchange CMCU3 was down 0.5 percent at $4,540.50 a ton. Copper edged back toward a 6-year low of $4,443.50 touched late last month with pleas for Chinese government intervention providing little tonic.

China’s major copper producers asked the government this week to buy the metal, joining a growing chorus in the country’s base metal industry that is pleading for state intervention.

Reuter

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020

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Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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