Oil Prices Rise as Libya Declares Force Majeure On Its Supply
Oil prices rose on Tuesday amid reports that Libya declared force majeure on significant amounts of its supply.
Libya’s National Oil Corporation (NOC) declared force majeure on loadings from Zueitina and Hariga ports on Monday, resulting in total production losses of 850,000 bpd due to the closure of eastern fields and ports.
Meanwhile, rising overall output from the Organization of the Petroleum Exporting Countries (OPEC) as well as in the U.S. continued to be cited as headwind for oil prices.
U.S. oil production, which has surged by 30% over the last two years to 10.9 million barrels per day (bpd), were also in focus.
European shares edge higher after breakthrough in Merkel migration row
By Julien Ponthus
European shares edged higher on Tuesday after German Chancellor Angela Merkel’s conservatives settled a row over migration and gave some respite to investors facing a rage of political worries including trade tensions with the United States.
The dispute over immigration had threatened to topple Merkel’s fragile governing coalition but in a breakthrough late on Monday evening, her rebellious interior minister dropped his threat to resign after five hours of talks.
Sterling holds gains after survey shows UK construction recovery
By Reuters Staff
The pound rose on Tuesday as a rebound in risk appetite supported sterling and after a survey showed Britain’s construction industry enjoying its fastest growth in June in seven months.
Chinese central bank comments on keeping the yuan stable, as well as broader moves higher for assets such as stocks, boosted currencies across the board including sterling.
The Construction Purchasing Managers’ Index (PMI) picked up to 53.1 from May’s 52.5, better than forecast. It was the third month in a row that the sector grew after contracting in March.
Australian Dollar is Today’s Best Performer after RBA Welcomes AUD Depreciation, Flags Improving Wages Outlook
By James Skinner
The Australian Dollar rose to the top of the leader-board Tuesday after the Reserve Bank of Australia (RBA) signalled improving confidence in the outlook for wage growth and that it is comfortable with the current level of the Australian Dollar, when some analysts had been entertaining the possibility of a dovish turn in the bank’s rhetoric.
Australia’s central bank held its interest rate unchanged at a record low of 1.5% Tuesday but sounded an upbeat tone on the economy.
The RBA did note “the rate of wages growth appears to have troughed and there are increasing reports of skills shortages in some areas,” suggesting it is growing more confident that wages will eventually pick up and lift the rate of domestic inflation with them. This is essential if the central bank is ever to find itself in a position where it can raise its interest rate.
Gold boosted as profit-taking weighs on dollar
By Fawad Razaqzada
The US dollar end higher for the third consecutive month in June and made a positive start to the new month and quarter on Monday. The fact that the greenback has weakened across the board, this points to profit-taking ahead of key events later on in the week. These include, among other things, UK services PMI on Wednesday; the last FOMC meeting minutes on Thursday and the June employment reports from both North American nations on Friday.
The weakness of the dollar has given the buck-denominated gold a boost. However, it remains to be seen whether the perceived safe haven commodity will be able to hold onto its gains given the overall ‘risk-on’ tone in the markets today, not to mention the metal’s strong bearish trend of late.
In any case, we will only get bullish on gold when there is a strong enough evidence that the buyers are back in town or there is a break in market structure of lower lows and lower highs.
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