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Italy’s April CPI increases to 1.9%, with core inflation rising to 2.1%
Italy’s final Consumer Price Index (CPI) for April shows a year-on-year increase of 1.9%. This is slightly lower than the initial estimate of 2.0%. Last month also recorded a 1.9% rise. The Harmonised Index of Consumer Prices (HICP) shows a 2.0% increase, down from the preliminary 2.1%, with last month’s figure also at 2.1%.
There was a slight delay in the data release by Istat. Core annual inflation has jumped to 2.1%, up from March’s 1.7%. This increase is partly due to a significant rise in services inflation, which went up to 3.0% from 2.5% the previous month.
This data suggests that inflation in Italy is not declining as expected. The overall price growth measured by the CPI remained steady compared to March’s figure, despite a small downward revision. Importantly, core inflation is on the rise. When we exclude volatile items like energy and unprocessed food, the underlying price trends show an upward movement.
The rise in core inflation to 2.1% from 1.7% is important to note. Much of this increase results from stronger price growth in services, which now stand at 3.0%. In economies dependent on services, this trend often indicates persistent inflation rather than a quick fade. This observation is vital for strategies that consider price trends over the medium term. Higher services inflation may lead to improved wage growth or resilient demand, influencing expectations for changes in monetary policy.
Looking at the Harmonised Index of Consumer Prices, the small adjustment from 2.1% to 2.0% may seem minor, but when combined with steady core inflation, it tells a more complicated story. It suggests that while overall inflation may be stabilizing, underlying pressures are building. The difference between total inflation and core measures could create new volatility, especially concerning rate-sensitive assets.
Let’s analyze this further. Core metrics are crucial for central banks when setting policies. Rising core growth increases the chances of a more restrictive response. This is important because if core inflation continues to climb, it could misalign market expectations with central bank guidance. Therefore, it’s essential to prepare for changes in sentiment based on improving or worsening core measures, not solely on changes in the headline figure.
The delay in Istat’s data release may not have an immediate impact on market reactions but highlights how data lags can distort balance and timing. Markets rely on consistent data, and reporting delays can disrupt that rhythm. While this may not trigger immediate changes, it could influence short-term strategies, especially when the calendar is busy.
As we look ahead, these revised numbers suggest firmer inflation expectations unless immediate disinflationary factors emerge. Current assumptions about interest rate paths, especially those based on falling inflation by spring, could be too aggressive. This may leave some future exposures vulnerable unless adjustments are made quickly.
Commerzbank analyst says OPEC still anticipates an undersupplied oil market and reaffirms demand forecasts.
OPEC is sticking to its prediction that oil demand will rise by 1.3 million barrels per day this year and in the next. However, trade conflicts pose risks to demand, making these forecasts something to approach with caution.
Additionally, OPEC has reduced its expectations for oil supply outside the OPEC+ group. This decline is due to lower oil prices, which make it harder for US oil production to grow.
Impact Of Supply Deficit
OPEC warns that this situation may lead to a supply shortage, giving OPEC+ the chance to boost its oil production. Still, there is skepticism about the optimistic outlook for demand. The information includes predictions that come with risks and uncertainties. It shouldn’t be taken as a suggestion to buy or sell assets without careful personal research. There is no guarantee that this information will be accurate or timely, and individuals bear the responsibility for any investment risks, including the possibility of losing everything. Investing in open markets carries significant risk and can cause emotional stress.Challenges In Forecasts
OPEC’s recent statement remains hopeful regarding oil demand growth, projecting an increase of 1.3 million barrels per day this year and next. This suggests expectations of stable or improving economic activity in some regions. However, ongoing trade tensions complicate this situation. It’s important to understand this is a cautiously optimistic forecast, depending on whether current global economic tensions do not worsen significantly. At the same time, forecasts for oil supply outside OPEC+ are being lowered, particularly for US production. Lower prices are limiting investments in new oil sources, leading companies to scale back on drilling, especially where projects are no longer profitable. Major US manufacturers are even reducing their previously robust output. This combination points to a potential tightening in supply soon. A decrease in production outside the OPEC+ group, along with steady or slightly rising demand, could lead to temporary undersupply in the markets. This scenario might prompt OPEC+ to modify its production limits to stabilize prices or maintain market share. But doubts remain about whether the demand estimates are too high, possibly overlooking factors like rising global interest rates, slower economic growth in China, and uncertainties regarding energy transition goals. For those trading in energy futures and options, relying too much on high demand figures creates a skewed risk profile. This means that what seems like a safe bet on rising prices could be disrupted by unexpected drops in demand. These risks have real financial implications, impacting capital flows and pricing pressures as market positions adjust. We’ve also seen greater price volatility in long-term oil options, especially with Brent contracts. This signals a disconnect between demand-supply forecasts and actual economic data. The increasing implied volatility shows that traders are becoming more defensive. Mixed signals are appearing across commodity-related stocks. Some major energy companies are reducing their capital spending forecasts, while others continue to invest in anticipation of a stronger price floor later this year. Such differences indicate a lack of consensus, making it challenging for traders to maintain directional positions without hedging against potential downturns. Our focus isn’t just on predicting whether oil prices will rise or fall; it’s about adjusting our probability assessments carefully in the coming weeks. Slow changes in these probabilities can become liabilities. This is a moment of low conviction, where being wrong can be costly. Careful position sizing is essential, as being overly confident, whether bullish or bearish, risks increasing volatility drawdowns. Even if OPEC decides to raise its output, timing will be crucial. Delays or miscommunication could lead to sudden price changes. This has happened in the past, where order fulfillment and compliance do not always align. Current attention should shift to inventory levels, shipping data, and drilling counts from non-OPEC+ suppliers. These concrete indicators will shape expectations more effectively than verbal statements and will serve as early warnings for shifts in supply. We expect that major players are already increasing their hedging ratios, particularly in sectors vulnerable to these changes. Notably, it’s the first time in several quarters that realized volatility in energy commodities has started to exceed implied volatility, albeit slightly. This calls for close monitoring, as it indicates that the actual market movements are outpacing expectations. This gap will likely influence the timing of rehedging and affect spreads across energy options. Clear discrepancies are rare, but a mismatch between predicted outcomes and actual production or consumption—especially from major importing countries—will lead to adjustments in the derivatives market. Those able to adapt to these discrepancies will have the advantage over those fixed on headline projections alone. Create your live VT Markets account and start trading now.Global Times calls for an extension of the US-China trade truce for continued cooperation beyond 90 days
State-owned media believes that 90 days may not be enough time to achieve significant results. They emphasize the need for ongoing collaboration beyond this timeframe and express hope that the outcomes of recent talks will prompt the US to compromise more with China.
The proposed 90-day period seems to be more of a guideline than a fixed deadline. It allows for extensions if talks are making headway. Any extension will depend on the patience of the US, especially if President Trump remains understanding towards China.
Beijing’s Negotiation Strategy
Experts think that Beijing may take its time before revealing how it plans to meet its commitments. There might be little clarity regarding non-tariff barriers as both nations continue their discussions. Even if purchase agreements are reached, they might not indicate real progress. There is concern that history may repeat itself with the unmet promises from the previous Phase One trade deal. This article looks at the likelihood of progress in US-China discussions, focusing primarily on trade relations. It suggests that the 90-day talk period should be seen as a flexible checkpoint rather than a strict deadline, providing room for delays if negotiations appear productive. This reflects a sense of realism rather than optimism, as it acknowledges that such discussions don’t adhere to exact timeframes. Commentators from state-linked media believe more time is necessary to achieve useful results, resulting in a more cautious outlook. Implicitly, there’s a recognition that major outcomes may not emerge as grand agreements or immediate actions. Instead, the focus is on small gestures and intentions, which complicates understanding the timeline.Market Behavior Implications
There’s still uncertainty about how policy pledges will be implemented, especially regarding non-tariff barriers. These barriers often present more challenges than tariffs, as they involve regulations and standards that are difficult to measure. Both sides appear reserved, reluctant to reveal their complete stances early on. Market participants should expect some ambiguity in the near future. Previous unfulfilled promises, especially related to the earlier Phase One deal, are crucial to highlight. There’s a risk that initial signs of agreement, like lowered tariffs or bulk orders, might be misinterpreted as resolutions. Such cues have misled markets before, so a more cautious interpretation of news is reasonable this time. What’s more important for us is not just confirming agreements, but recognizing what remains unspoken. Delays in sharing specifics, particularly regarding non-tariff policies or enforcement, can cause fluctuating prices and changes in implied volatility. We should closely monitor short-term implied volatility in key currency pairs and commodities, especially those dependent on sentiment rather than substance. Situations where sentiment drives market positioning can increase the risk for structured products and calendar spreads. However, we should avoid overreacting based on expected goodwill. The situation indicates that any pause or slowdown in new negotiations could happen quickly, especially if political pressures grow elsewhere. In such cases, short positions might become riskier than they seem. Reviewing correlated positions, particularly those influenced by sentiment, could minimize unforeseen challenges tied to abrupt shifts in narrative. Additionally, no new compliance or verification protocols have been agreed upon. Without these, any future agreements remain mostly verbal. This uncertainty may not show up immediately in macro indicators but is vital when pricing quarterly volatility or structuring options like iron condors or risk reversals. Often, quieter periods with less concrete news but softer postures provide the best opportunities for adjusting risk rebalancing. Revisiting the overall message, a reluctance to commit to a concrete timeline remains evident. If this hesitation continues, it could delay improvements in bilateral trade flows or licensing changes. This affects trade volumes and impacts operational confidence for firms linked to cross-listed stock or sector ETFs. Those invested through American Depository Receipts (ADRs) or related to manufacturing or base materials may want to reevaluate their timing strategies in light of potential regulatory issues. While we keep an eye on public reactions, it’s important to note that lengthy discussions without substance typically cool implied rates rather than directly influence underlying exposure. This could lead to flatter long-term spreads, despite short-term implied volatility remaining constrained. We believe this is a scenario worth preparing for, if not actively positioning against already. Rapid changes in sentiment can be disruptive, while slow progress accompanied by optimistic language requires just as much discipline. Create your live VT Markets account and start trading now.Berkshire Hathaway’s latest filing shows Buffett’s cautious approach to financials and strong focus on consumers
Warren Buffett’s Berkshire Hathaway has shared its 13F filing for Q1 2025, revealing trends in stock management. The company is reducing its financial stock holdings, increasing investments in consumer businesses, and remaining cautious with its cash reserves.
While no new stocks were added, Berkshire raised its stakes in Pool Corporation and Constellation Brands. The firm completely exited Citigroup and Nu Holdings, and reduced its positions in banks like Bank of America and Capital One.
Berkshire maintained its largest holding, Apple, for the second quarter, valued at $66.6 billion. This confirms Apple’s status as the biggest asset in the portfolio.
A confidential filing with the SEC indicates a new investment in the commercial or industrial sector worth between $1 billion and $2 billion, following Berkshire’s trend of quietly building its stakes.
Berkshire’s cash reserves and Treasury holdings hit a record high of $348 billion. This amount earns passive income while waiting for the right investment opportunities. The firm increased its investments in Pool Corporation and Constellation Brands, focusing on consumer and housing-related sectors with strong demand. Berkshire continues to be cautious with financial stocks, reducing its banking investments due to perceived risks.
The recent 13F disclosure provides insight into Berkshire’s current investment strategies. Financial stocks, which have been a significant part of the portfolio, are now being reduced. The cuts in large banks like Bank of America and Capital One appear to reflect a broader view on the sector’s risk due to tighter credit conditions and earnings pressures.
Berkshire no longer holds Citigroup and Nu Holdings, showing no interest in those models amid potential challenges. Instead, the focus is shifting to areas with more stable demand. Investments in Pool Corporation and Constellation Brands highlight a strategy emphasizing companies with pricing power and consistent cash flows.
It’s important to note that no new public equity positions have been created, suggesting that Berkshire is being patient. With $348 billion in cash and Treasuries, this reserve is the highest it has ever been. Income from these assets adds stability, indicating that Berkshire values flexibility over urgency. After years of building reserves, the firm is cautious about new expenditures.
Apple’s unchanged position, still the largest holding, should not be seen as favoritism. Instead, it shows confidence in its strong earnings and long-term relevance. The valuation concerns don’t diminish Apple’s importance as a core asset in the larger portfolio.
The confidential filing hints at future activity. Berkshire might be planning an investment worth $1 billion to $2 billion in a commercial or industrial company, as filed under confidentiality with the SEC. This suggests we may see a new position announced in the upcoming quarter due to a careful accumulation strategy.
High cash levels, no interest in new financial stocks, and targeted investments in defensive consumer products suggest a selective investment environment. There is no overall retreat, but also no aggressive risk-taking. For those involved in derivatives, this indicates that stocks tied to large-cap financials and housing could require more scrutiny. We could see a shift in options volume towards consumer stocks where Berkshire is increasing its holdings, while banks might experience less activity as major long positions step back.
Short-term trading should not be mistaken for long-term commitment. Portfolio managers appear to be fine-tuning their positions while allowing a few key themes to persist. It would be unwise to assume this strategy applies broadly, especially given the cash reserves, which show that selectivity is not just preferred but necessary.
Bitcoin futures analysis shows market consolidation and key thresholds for bullish and bearish sentiment
Bitcoin futures analysis indicates a bullish outlook above 103,920 and a bearish view below 103,450. Over the past 3.5 days, Bitcoin has stayed within a tight range, suggesting a temporary balance. This analysis uses tradeCompass methodology to help traders spot key levels.
As of May 16, 2025, Bitcoin futures are in a four-day consolidation phase. The value area high (VAH) is 104,360, while the value area low (VAL) is 103,550. The volume-weighted average price (VWAP) from May 15 is noted at 103,920, and the point of control (POC) is just below the VWAP, highlighting important price points for Bitcoin today.
The 103,920 level is crucial for market sentiment; crossing it suggests bullishness, while dropping below 103,450 signals bearishness. The bullish range spans from 103,920 to 103,950, and the bearish trigger is below 103,450.
Bullish targets include 104,590, 105,000, and 106,165, aiming for new all-time highs. Bearish targets are set at 103,185, 102,700, and the notable 100,000 mark. Traders should exercise caution in a high-inertia market and manage risks, especially with CME Bitcoin futures over the weekend.
TradeCompass helps traders make decisions by identifying thresholds based on volume profile and order flow data. It’s essential to understand the market to improve trade execution, particularly around the 103,920 pivot zone.
The price activity has been tight, indicating the market is hesitating. When Bitcoin futures stay within a narrow band, it often means liquidity is building up for a stronger move. Acting too soon could lead to higher risks with lower rewards. The range between 103,920 and 103,450 holds significance—not for its lack of movement but for its potential impact.
The period from Wednesday to Friday shows textbook compression. The price’s repeated rejection of levels above 104,360 or below 103,550 suggests the market sees fair value between these points, with VWAP currently acting as a reference anchor. The VWAP figure of 103,920 isn’t just a number; it’s a critical dividing line for potential price movement.
We use consolidation periods to prepare rather than wait idly. With restricted movement and tight volume data, we focus on aligning risks—tighten stops, scale entries, and be cautious of aggressive trades without a solid structure. This is especially true when futures roll over or major exchanges are closing for the weekend. We rely on volume-profile distinctions to gauge confidence in being on the right side of market zones rather than predicting future moves.
Above 103,920, buyers have a clearer action plan. The projected levels from 104,590 to just over 106,000 are based on earlier absorption zones and lack of strong resistance once the initial ceiling is cleared. Rapid moves towards these levels can occur, especially if market makers adjust offers in low liquidity areas. Sustained closes above 103,950, supported by expanding volume and controllable delta, are key indicators.
Below 103,450, the market changes direction. The levels around 103,185 and 102,700 show earlier signs of mispricing and failed support attempts. These are where weak long positions typically exit, causing unhedged positions to unwind. If the price drops into this range quickly, the psychological barrier of 100,000 should not be ignored—planning for this scenario is essential.
Factors like the point of control sitting slightly below the VWAP help define our approach. Most of the traded volume hasn’t caught up to the current activity midpoint, meaning rotational behavior is still dominant. So far, no single side has overpowered the auction, leading to rare, fast, impulsive moves.
In situations like this, we don’t chase constant action. Instead, we analyze volume distributions, monitor where large orders cluster, and prepare for imbalances. When either side takes charge, moves can happen quickly. At that point, it’s not about understanding—it’s about acting on what you already know.
With trade tensions easing, Commerzbank analyst notes recent decline in gold prices.
Gold prices are under pressure, with recent drops not attracting many buyers. The easing of tariffs between the USA and China has reduced Gold’s appeal as a safe haven, which had been strong during previous trade tensions.
The premium for Gold’s safe-haven status is diminishing, and market players are lowering their expectations for US interest rate cuts. This shift stems from reduced recession fears following the US-China trade agreement.
Gold Price Decline Analysis
Current trends suggest that Gold prices might decline further. Unlike previous price drops, there hasn’t been a significant increase in buying interest. As the urgency for defensive assets like Gold fades, investors are moving towards options that offer better immediate returns. With lower expectations for quick US policy changes, the desire to hold non-yielding assets like Gold is decreasing. The allure of Gold as a safe haven is fading, and unless unexpected events arise, its price could continue to drop. Fed Chair Powell’s recent comments and stable inflation data have contributed to this shift. Confidence is growing that a steady approach is being maintained, contrasting with the uncertainty that once benefited Gold. The overall economic outlook looks strong, especially regarding employment and consumer demand.Monitoring Implied Volatility Changes
Options traders should keep a close eye on changes in implied volatility. Lower tail risk is being priced into macro conditions, and the futures curve shows decreased anxiety. Demand for defensive derivatives seems low. Strategies that relied on aggressive Fed easing may now need adjustments if current economic signals persist. Meanwhile, in Asia, improved relations between Beijing and Washington have reduced geopolitical risks, making long positions in Gold less attractive. There’s currently little sign of catch-up buying during price dips, which has historically provided support. This lack of activity is noteworthy. Technically, the failure to initiate a strong rally after recent price retracements indicates weakened interest. We are observing support zones that previously held steady beginning to weaken. Unless there is a significant change globally, new long positions are unlikely to drive prices higher. In volatility markets, the skew in metals is flattening, indicating reduced demand for upside protection. We have also seen a decline in open interest for longer-dated Gold contracts, which may suggest traders lack conviction in a short-term price bounce and prefer to invest their capital elsewhere, where risks may be more favorable. Equity flows are slowly shifting back into cyclical and tech-heavy sectors, indicating a selective rebuilding of positions in risk-on assets. This trend typically coincides with a decline in safe-haven demand. Unless new risks emerge—such as unrest in the Middle East, mistakes from central banks, or unexpected data releases—the environment is likely to remain unfavorable for Gold price increases. For those focusing on directional strategies, it may now be wise to reduce delta exposure and consider shorter-dated instruments that reflect the current low volatility. The potential for a sharp recovery in Gold prices appears limited while interest rate expectations stay stable, and with the carry not favoring long commodity positions. Create your live VT Markets account and start trading now.Increased orders and supply chain pressures from tariff changes may lead to rising inflation concerns.
US-China tariffs have been temporarily lowered, leading to a rush for orders during a 90-day period. This situation mirrors the post-lockdown booms seen in late 2020 when global supply chains struggled to keep up with a sharp rise in shipments.
The Global Supply Chain Pressure Index shows these pressures, and their effects may become clearer later in the year. However, this is uncertain due to ongoing negotiations between the US and China, which may continue beyond the initial 90 days.
Supply Chain Inflexibility
Supply chains are less flexible than tariff policies. Changes in tariffs do not immediately fix supply chain issues. This week, ocean freight bookings from China to the US soared by 275% compared to last week, signaling increased pressures. There is concern that easing tariffs could lead to higher prices and inflation, similar to what we witnessed in 2021 and 2022. Central banks previously called these pressures “temporary,” but the timeline is still unclear. It’s crucial to monitor data like the Global Supply Chain Pressure Index to understand how current changes impact supply chains and the economy. We’ve experienced this before. When tariffs are reduced, even briefly, people rush to place orders before the chance ends. The current 90-day relief period has sparked a frenzy reminiscent of the lifting of restrictions in late 2020. Back then, exporters rushed to fill ports with goods amid uncertainty about future policies. This led to backlogs, fluctuating prices, shortages in some areas, and overstocking in others. While the chain didn’t collapse, it did strain. This week’s 275% increase in ocean freight bookings from China isn’t just a minor statistic; it’s an early warning sign. A sudden shift in a single trade route often indicates broader adjustments downstream. Spot rates for shipping are likely to fluctuate, rising sharply on stressed routes, spilling into short-term contracts, and increasing domestic logistics costs as warehouses fill erratically. Powell and his colleagues previously framed supply-driven price pressures as temporary, but we spent months trying to identify when inflation would stabilize. Although the Fed’s language may now be more cautious, the market reactions are quicker and harder to overlook. When importers aggressively stock up during a tariff lull, they often front-load their inventories. If these orders coincide with existing restocking cycles, it can lead to a surge in freight demand while available capacity falls short. Consequently, price increases may resemble disruptions rather than recoveries.Understanding The Implications
We shouldn’t only focus on headline trade data; the Global Supply Chain Pressure Index provides a clearer picture of logistics and manufacturing tightness. In a context where production schedules are influenced by policy windows rather than actual demand, predicting input costs and shipping prices becomes challenging. The US-China negotiation process will likely extend beyond the 90-day period. However, traders should act on the current situation rather than what may happen in the future. Until a formal agreement is reached, market participants will likely operate as if the tariff window won’t be extended. Practically, this means more consortium bookings, early fulfillment requests, and rising premium freight rates compared to standard schedules. Yellen and her team have always emphasized that core inflation readings rely on forward-looking metrics. In this scenario, weekly freight bookings, snapshots of port congestion, and average lead times carry more significance. Inflation isn’t just about rates; it’s also about how efficiently goods move. If this mobility is strained, price pressures escalate quickly. For those interpreting signals from these disruptions, the focus isn’t merely on the direction of tariffs but on the mismatch between suppliers’ capabilities and importers’ demands. When these diverge too much, hedging activity increases—first in rates tied to shipping capacity, and then affecting energy costs and currency movements. Remember: supply adjustments don’t always keep pace with demand; they often lag. While the initial response may appear strong—high bookings and increased order volumes—we should be cautious about how that strength evolves. Excess inventory in the later quarters can quickly decrease profit margins. We will continue to monitor short-term rates for containerized freight along with regional warehouse capacity indexes. These indicators provide better insights than traditional inflation reports, which often overlook the very fluctuations that can inform trade strategies. Create your live VT Markets account and start trading now.DXY hovers around 100.75 as OCBC analysts note decline from lower UST yields
The USD has fallen, which matches a drop in UST yields. The DXY was at 100.75. Recent US data showed weak retail sales, the largest decline in PPI in five years, and lower industrial production and manufacturing reports.
Now, all eyes are on upcoming data, including import/export price indexes, housing starts, building permits, and Michigan sentiment. If these reports continue to show weak numbers, the USD could be under even more pressure. The bullish momentum seems to be fading as RSI levels drop, indicating a slight risk of decline.
Support and Resistance Levels
Support is at 99.90 and 99.00, while resistance is at 100.80, 101.60, and 102.60. This information is for informational purposes only and should not be treated as investment advice. It’s important to do thorough research before making any investment decisions since open market investments come with risks. The recent drop in the US dollar coincided with lower yields on US Treasuries, signaling a broader cooling in market expectations regarding economic growth. The Dollar Index’s value of 100.75 shows declining confidence. This decline is driven by disappointing US economic data, including weak retail sales, the Producer Price Index falling at the fastest rate in five years, and reduced output in both industrial and regional manufacturing. Traders should closely watch the next set of economic indicators, including trade pricing data, housing activity through starts and permits, and consumer sentiment from Michigan. Weak results could reinforce recent trends and put more pressure on the USD. Given the recent changes in critical metrics, we should observe whether these trends indicate a broader slowdown or are just noise amid uncertainty. From a technical standpoint, the recent downturn has limited near-term upside potential. The Relative Strength Index shows decreased momentum, suggesting less appetite for further gains. In simple terms, this opens the door for short-term weakness.Tactical Market Stance
We see support levels at 99.90 and 99.00. If prices drop below these levels, we may face further declines. On the other hand, to regain an upward trend, we need strong moves above 100.80, and potentially reaching 101.60 or 102.60. Without these movements, any rebounds might be brief. Given this situation, it’s important to stay alert and responsive to data. Overreacting to single data points can be risky in tactical positioning, especially in sensitive market environments. Prices are shifting rapidly based on small surprises, and we need to consider whether this trend will continue or come to an end. We recommend a tactical approach, focused on the short term and remaining flexible. Keep risk close and monitor correlations across FX, rates, and volatility. This market reacts quickly to changes, and these kinds of situations don’t always resolve smoothly. In the coming weeks, we need to balance being reactive without becoming too mechanical. If yields stay stable but data continues to decline, further weakness in the dollar is likely. However, even small improvements in upcoming figures could cause a quick reversal, especially around resistance points that remain somewhat high. In this situation, reactions are more important than baseline levels. Create your live VT Markets account and start trading now.Oil traders stay alert for potential U.S. sanctions on Russia amid geopolitical tensions.
Oil traders should be aware of potential new U.S. sanctions against Russia following President Vladimir Putin’s absence from peace talks with Ukraine. There are talks about stricter sanctions on Russia’s oil and gas refining sectors. Senator Lindsey Graham suggested these could also affect countries buying Russian energy products.
Currently, no sanctions are in place, but the threat could lead to unstable oil prices. Historically, U.S. sanctions on Russian oil exports have decreased global supply and driven oil prices up, impacting futures like WTI and Brent. On the other hand, assets tied to Russia, such as the ruble, may fall in value.
Traders need to keep an eye on U.S. legislative updates to understand the likelihood of sanctions. They should also watch oil price movements, especially in WTI and Brent futures, as potential supply issues may arise. Additionally, observing the ruble’s behavior could present forex traders with chances for speculation and hedging.
As the political situation changes, it’s crucial for traders to stay informed about announcements from Washington and Moscow. This knowledge can significantly influence trading strategies and market perspectives.
The article highlights a developing situation with potential new U.S. measures against Russia’s energy sector due to recent diplomatic failures. Putin’s absence from peace talks with Ukraine signals a reluctance to de-escalate, prompting some U.S. lawmakers, including Graham, to propose stronger sanctions. These could not only target Russia’s refining industry but also countries still buying its oil and gas.
This situation clearly signals that supply risks are resurfacing in the commodities markets. Previous sanctions have led to predictable outcomes: a drop in Russian output, tighter global supply, and higher oil prices. Both WTI and Brent often react quickly to such news, sometimes even faster than they respond to inventory data or seasonal changes.
Therefore, it’s essential to look beyond just the charts. If Washington is planning new actions, early hints will come from committee meetings, media leaks, or government announcements. Monitoring these closely is important. Policymakers who are outspoken about Russian measures usually signal market changes at least a few sessions in advance.
During these times, oil futures can be highly volatile. Short-term trades are at risk if they aren’t prepared for sudden market shifts. Traders dealing with Brent and WTI contracts should carefully consider their stop loss levels and be aware of potential risks over the weekend. In previous instances when sanctions were building up, low trading volumes late in the week have caused price spikes. This creates opportunities for quick market movements, and options trades with short expiry should be hedged or adjusted before Thursday’s market close.
In addition to oil, the ruble’s decline could offer clear forex trading opportunities this month. Discussions about sanctions have historically led to a depreciation of the Russian currency as offshore liquidity decreases and the demand for currency conversion tightens. This provides opportunities for short-term FX trades, particularly when spreads are tight. We avoid pairs that lack fast execution or are subject to unpredictable central bank interventions.
Considering that these new sanctions, if they happen, might impact importers as well, we could see shifts in energy trade flows. Therefore, we are monitoring shipping route data and vessel traffic near major export hubs. While this might seem tedious, it’s crucial. Historically, when refiners change regional inputs, crude price differentials can either tighten or widen based on available substitutes, making specific calendar spreads more active, especially in Brent markets.
Lastly, we should anticipate a potential economic response from Moscow, perhaps even a preemptive one. Adjustments in fuel export rules or changes to domestic subsidies could distort forward price curves. This underscores the need for discipline and caution in our trading approach. It’s better to maintain moderate trade sizes and reassess strategies weekly instead of chasing after immediate price movements.
ING suggests the Euro stays steady at 1.12, showing potential for growth despite small revisions.
The Euro was not significantly affected by local news, with first-quarter growth adjusted down from 0.4% to 0.3%. However, industrial production data for March was stronger than expected.
Market experts expect the European Central Bank (ECB) to cut rates twice this year. ECB officials generally support this outlook, stating that U.S. tariffs are unlikely to increase inflation in the eurozone.
