The latest report from the EIA shows a decrease of 2,332K in US crude oil inventories, contrasting with the expected increase of 2,605K. The previous week’s figure was a rise of 4,633K.

Gasoline inventories increased by 369K, while a decline of 849K was anticipated. Distillates rose by 3,908K, exceeding the expected drop of 1,488K.

Although the crude oil draw represents positive news for the oil market, the figures for refined products suggest bearish conditions. Increased refinery activity aimed to address tighter diesel and fuel oil supplies.

A sharper decline in crude stocks than anticipated suggests a stronger pull on supply, which typically points to greater demand or lower production levels. The expectation was for inventories to grow, yet they dropped by over 2 million barrels instead. This shift could create tighter supply conditions if the trend persists. With last week’s large build, the latest figures show a reversal, but whether this continues depends on refinery throughput, imports, and broader consumption trends.

At the same time, refined product inventories moved in the opposite direction. Petrol stocks climbed despite forecasts expecting a reduction. Though the increase was small, it indicates that demand was not as strong as projected or that output ran ahead of consumption. Distillate supplies surged far beyond what markets had priced in, implying weaker demand for heating fuels and diesel or an intentional push by refiners to boost availability. Since refiners react to price signals and seasonal patterns, this jump in distillates could mean they are preparing for potential winter shortages or responding to prior supply constraints.

Much of this comes back to refining operations. Adjustments made in response to previous shortages of diesel and fuel oil have likely contributed to the shifts seen now. If processing rates remain elevated, further builds in refined stockpiles may weigh on margins. On the other hand, if crude inventories continue to shrink while refined products pile up, refiners may be forced to slow runs, affecting both upstream and downstream price movements.

The contrasting shifts in crude and products bring attention to refining decisions in the near term. Whether refineries maintain current output levels or scale back will depend on how product demand holds up and whether crude supply trends towards continued draws or renewed builds. Market participants need to watch for how these forces shape upcoming inventory reports and refining margins, as these will be key in determining potential price shifts.

Mortgage applications in the United States decreased by 1.2% on February 21, compared to a larger drop of 6.6% previously. This decline follows ongoing trends in the mortgage market.

In currency trading, the AUD/USD pair is facing resistance around the 0.6300 mark, while the EUR/USD pair struggled to breach the 1.0500 level. Gold prices have risen past $2,900 per troy ounce due to a weakening US Dollar.

Inflation in France is predicted to drop, influenced by reduced electricity prices, though rapid price rises in services persist across the Eurozone. Bitcoin remains around $87,000 following significant market volatility.

A slight dip in mortgage applications by 1.2% shows a slower pullback than the steeper 6.6% decline seen earlier. It suggests that while demand may not yet be strong, the previous sharp drop could have been an outsized reaction. Longer-term buyers still seem hesitant, but the slower decline hints that conditions might be stabilising.

The Aussie dollar remains pressured under 0.6300, struggling to gain momentum. It has had trouble pushing past resistance, which suggests sellers are still in control. Meanwhile, the euro tested 1.0500 but could not break higher, with markets keeping a watchful eye on any shifts in US monetary policy. If traders continue rejecting these price levels, we may not see an immediate recovery.

Gold has surged beyond $2,900 per troy ounce as weakness in the dollar provided a tailwind. A rising gold price often signals persistent fears about inflation or wider economic risks. If strength in gold sustains in the coming days, it might reinforce concerns that investors are shifting to safer assets.

French inflation is expected to ease, partly helped by lower electricity costs. However, services across the broader Eurozone still experience price increases, which complicates the overall trend. The European Central Bank will likely pay close attention to whether these pockets of inflationary pressure continue.

Bitcoin has largely hovered around $87,000 despite the turbulence in recent sessions. Sharp fluctuations haven’t led to an extended move in either direction, keeping traders alert for the next opportunity. If price swings settle, volatility-focused strategies might need adjusting.

EURUSD has experienced volatility today, alternating between essential technical levels. During the Asia session, it initially advanced, testing the weekly high at 1.0527 and the January high at 1.05325, reaching a peak of 1.05242 before turning lower.

As the U.S. session commenced, EURUSD fell below the 100-hour moving average at 1.04839 but remained above the 200-hour moving average at 1.04718. A critical support zone exists between 1.04529 and 1.04677, where the price had previously found support on Monday and Tuesday.

For sellers to strengthen their position, they must breach both moving averages. Otherwise, the pair may remain within a defined range, with resistance at 1.0525 to 1.05325 and lower support from 1.04529 to 1.0467.

Declining beneath both moving averages would indicate that sellers have regained control. If the price holds above these levels instead, buyers may attempt another push towards the resistance area. With fluctuating sentiment, short-term positioning will be key.

We have seen price movements largely guided by technical barriers rather than a decisive directional shift. The failure to sustain gains beyond the week’s high points hints at hesitation among buyers, while sellers have not yet demonstrated enough strength to overwhelm support levels. This leaves the market in a state where both sides will need greater conviction to establish momentum.

The 100-hour and 200-hour moving averages now serve as pivotal markers. Any sustained movement beneath them would suggest downward pressure is building, particularly if the nearby support area fails to hold. Continued tests of this range without a break mean consolidation remains in play. If support holds firm, expect attempts to push higher again, but gains should be monitored for rejection near recent tops.

Market participants should be aware of whether price action stays confined within this structure or if a decisive breakout occurs. Short-term positioning should reflect the boundaries currently in place, while any breach will require reassessment of expectations. Without a firm directional push, fluctuations within the broader technical range will likely persist.

Lowe’s reported challenges in the US housing market, with shares rising 2.5% due to modest revenue and earnings growth, following an 18% decline since October. The persistent high mortgage rates, currently at 6.8%, contribute to a struggling sector.

For 2025, Lowe’s forecasts same store sales to remain flat or increase by up to 1% after a 3.1% revenue decline in FY2024. Conversely, comp store sales rose 0.2% quarter-on-quarter, ending an eight-quarter downward trend.

Home Depot’s CEO stated that housing turnover has likely bottomed out at approximately 3% of units, with no expected rebound or significant increases in new housing starts.

The latest update from Lowe’s highlights a familiar concern: the ongoing weakness in the US housing market. Despite shares climbing 2.5%, revenue and earnings growth remained moderate. This upward movement in share price comes after months of decline, with Lowe’s stock having fallen by 18% since October. The broader picture remains challenging, as persistently high mortgage rates, now at 6.8%, continue to keep prospective homebuyers on the sidelines. Elevated borrowing costs limit activity, reducing demand for home improvement projects and renovations—key drivers of Lowe’s performance.

Looking ahead, the company’s outlook for 2025 suggests no major sales rebound. Same-store sales are projected to be unchanged or rise by a modest 1%, following a revenue dip of 3.1% in the previous financial year. However, one recent development offers a slight shift in momentum: comparable store sales in the last quarter edged up 0.2%, marking the end of an eight-quarter decline. That increase, though small, is a break from the persistent downward trajectory seen since early 2022.

Meanwhile, Home Depot’s leadership reinforced concerns about the broader market environment. Ted made it clear that housing turnover appears to have stabilised at roughly 3% of total units. From that level, Home Depot does not anticipate a resurgence in housing transactions or a wave of new construction. That statement suggests that, barring external changes, demand for home improvement retail is unlikely to change dramatically in the coming months.

For those monitoring price movements, these updates provide plenty to consider. Investors have already adjusted expectations, as reflected by Lowe’s recent share price recovery. The stabilisation in comparable sales might suggest a floor has formed for now. However, the absence of a rebound in housing market activity keeps long-term growth prospects constrained. Mortgage rates remain high, affordability concerns linger, and with no major pick-up in home sales or new construction expected, the pace of any recovery looks uncertain.

As market trends play out, positioning will need to account for these contrasting signals. Some risks remain elevated, while recent earnings reports indicate that the sector may not deteriorate much further in the near term. Price action in the coming weeks will reflect how much of this has already been factored in.

USD/JPY has seen a gradual decline after reaching a lower high of 158.85, compared to the previous high of 162 in 2024. It recently fell below the 200-DMA and is currently testing the December low of 148.60, which acts as interim support.

The daily MACD has crossed below the equilibrium line, indicating sustained downward momentum. Should a short-term bounce occur, resistance may be found at the Moving Average of 152.50.

Failure to breach 152.50 may prompt further declines, with potential support levels identified at 147/146.85 and 145.

The recent price action shows a clear shift in momentum, and traders should be prepared for continued volatility. The fact that USD/JPY has fallen below the 200-day moving average is telling. This level often acts as a dividing line between longer-term bullish and bearish trends, and when price drops below it, sentiment can turn negative quickly.

A test of 148.60 was inevitable given the selling pressure. This level provided support in December, but there’s no guarantee it will hold now. If it breaks, market participants may start targeting 147, with 146.85 lining up as another point of interest. If this zone gives way, then attention will likely shift to 145, which is a psychologically round number and previously acted as a key area in the past.

On the upside, any recovery might be capped near 152.50, where a moving average stands in the way. If price begins to rebound, expect sellers to emerge around this level. A failure to push through could reinforce the idea that the broader move remains biased to the downside.

Momentum indicators also confirm the recent weakness. With the MACD now below its equilibrium line, bearish momentum remains in place. If there’s a temporary rally, it will take more than just a minor uptick to change the current sentiment. A sustained push higher would be needed before anyone can start considering a shift in trend.

As we navigate the coming sessions, it’s wise to remain flexible and react to price behaviour rather than predict it. Moves towards support levels should be watched closely, as well as whether any attempted rally finds rejection near resistance. Keep an eye on how price behaves around these key markers—persistent failures could reinforce the downward trajectory.

Canada’s January wholesale trade increased by 1.8%, based on a 59.1% survey response that will receive further updates.

Aircraft movements in Canada have recovered to only 92% of the levels seen in 2019, contrasting with the US where flights have surpassed pre-pandemic figures.

Furthermore, monthly load factors for November and December were lower than those recorded in 2023.

In a positive development, a survey indicates a forecasted 5.5% rise in non-residential tangible capital asset investment for 2025, with growth expected in both public and private sectors.

However, concerns exist regarding potential decreases in consumption due to tariff uncertainties and challenges in the housing market, particularly in Ontario and British Columbia.

The reported wholesale trade expansion in January suggests that commercial activity is showing momentum. However, the reliability of this figure remains open to adjustment due to the modest response rate in the survey. While the initial number indicates growth, revisions in the coming updates could either reinforce or temper the outlook. If the final figures continue to reflect gains, this would point to robust transactional activity across multiple sectors.

Air travel remains subdued when compared to pre-pandemic benchmarks. Canadian airport traffic still lags behind 2019 figures, whereas the United States has surpassed its previous peak. This slower revival suggests that domestic and international travel demand remains somewhat constrained. Load factors for the final two months of last year also fell short of those recorded the previous year, implying that capacity utilisation on flights has not recovered in tandem with initial optimism. Without a rebound in passenger volume, revenue efficiency for airlines operating in Canada may face pressure in the near term.

On a more encouraging note, projections indicate an expected rise in non-residential investment next year. Both private businesses and government entities anticipate increased spending on physical assets, aligning with broader economic expansion efforts. If these plans materialise, they could support employment levels and economic development. That said, external risks could still influence whether planned investments translate into actual expenditures.

Consumption risks remain evident, stemming from uncertainty around trade barriers and affordability challenges in property markets, particularly in Ontario and British Columbia. Ongoing concerns surrounding tariffs could weigh on purchasing behaviour, especially if import costs rise. Meanwhile, housing-related difficulties could constrain discretionary spending as households prioritise essential financial obligations. Market reactions to these factors will reflect whether demand remains resilient.

China’s technology sector presents attractive alternatives to US giants, supported by government backing and favourable market valuations. Easing regulations have opened opportunities in sectors like AI, semiconductors, cybersecurity, and electric vehicles (EVs).

E-commerce remains strong with companies like JD.com and Meituan thriving through innovations such as live-streaming. In semiconductors, domestic producers like SMIC and Hua Hong Semiconductor are expanding due to the need for local alternatives.

In AI and cloud computing, Alibaba, Baidu, and Tencent are at the forefront. The EV market is led by BYD, XPeng, and Li Auto, with cybersecurity firms like Qi An Xin gaining from increased demand for local services.

With lower valuations compared to American counterparts, these firms are drawing the attention of investors who see both growth potential and reduced regulatory risk. The easing of restrictions has not only allowed them to innovate more freely but has also encouraged interest from domestic and international markets.

Logistics and service-driven platforms are refining user engagement, particularly through real-time interaction with buyers. JD.com and Meituan have capitalised on this by merging entertainment with retail, which has strengthened customer retention. The focus is not just on traditional e-commerce but on creating digital ecosystems that integrate shopping, payment, and local services smoothly.

In semiconductor production, there has been a strong push to build local supply chains. SMIC and Hua Hong Semiconductor are gaining ground as demand for domestically produced chips increases. With external pressures affecting imports, these businesses are becoming central in efforts to improve self-sufficiency. The combination of government incentives and industry expertise is accelerating the shift towards reliance on homegrown solutions.

AI advancements are moving quickly, with Alibaba, Baidu, and Tencent positioning themselves to compete globally. Their cloud computing divisions are expanding beyond domestic markets, targeting businesses seeking alternatives to Western providers. Given past setbacks related to foreign dependencies, having robust in-house AI and cloud services ensures more stability.

While EV competition remains strong, BYD, XPeng, and Li Auto continue to refine battery technology and vehicle design. Lower production costs combined with growing demand mean they are well-positioned domestically and internationally. Meanwhile, reliance on cybersecurity from local firms is becoming the standard. Qi An Xin stands out as businesses and governments prioritise protection from external threats.

For those trading derivatives, understanding how these trends translate into volatility is essential. Regulatory shifts, earnings reports, and geopolitical influences will create price swings, presenting both risk and opportunity. Those focused on short-term movements must stay alert to policy announcements and market sentiment, as these factors directly affect pricing.

Monitoring liquidity levels in these stocks is also key, particularly given varying overseas investor sentiment. While long-term holdings may benefit from regulatory stability, short-term trades are highly reactive to policy changes and quarterly updates. Staying ahead of industry developments ensures no sudden shifts catch traders off guard.

The US-Ukraine deal has been released, with President Zelensky set to travel to the US for its signing. This agreement establishes a Reconstruction Investment Fund aimed at fostering collaboration between the two nations.

The fund’s investment strategy will focus on Ukrainian assets, including natural resources and key infrastructures, such as ports and state-owned enterprises. The US is committed to a long-term financial relationship, involving a joint management approach with Ukraine.

In total, Ukraine will contribute 50% of future monetisation revenues from its natural resources to the fund. The deal also includes provisions to ensure the protection of mutual investments.

This agreement outlines a long-term financial commitment between both countries, with Washington securing influence over Ukrainian assets in exchange for investment. By requiring half of future revenues from resource monetisation—an arrangement that effectively ties Ukraine’s economic recovery to the fund—the US has ensured a degree of oversight. This structure reduces uncertainty for investors, as joint management prevents sudden policy shifts that could deter capital.

Natural resource-backed financing creates an interesting dynamic for pricing. As Ukraine remains a commodity-heavy economy, future asset values will fluctuate based on energy demand and infrastructure stability. Ports, for example, serve as major transit hubs for agricultural exports, and with US involvement in their administration, efficiency gains could materialise. If those improvements translate into increased shipments, related commodities may see higher liquidity.

For those watching volatility-driven opportunities, the protection clauses within the agreement imply lower downside risk for foreign capital flows. Joint oversight suggests that abrupt nationalisation policies are unlikely, which stabilises expectations in sectors subject to government influence. That assurance reduces uncertainty premiums typically baked into valuations when operating in politically exposed markets.

With Zelensky preparing to formalise this arrangement in Washington, clarity on implementation details will follow. Negotiations of this scale frequently involve secondary agreements, and any adjustments could alter perceived risk exposure. Until the final text is available, pricing in potential legislative changes remains a factor.

Market reactions will likely hinge on whether Ukraine enacts domestic policies that complement this framework. If institutional safeguards improve, capital flows may rise at a pace that shortens the recovery timeline. Any divergence, however, would have the opposite effect on valuations in relevant sectors.

European natural gas prices decreased by 6% yesterday, with TTF as a notable index suffering from this drop. Contributing to this decline is a US-Ukraine minerals deal and calls from German utilities to ease storage target rules ahead of winter.

Utilities propose reducing the storage target from 90% to 80% for November 1st. Current EU gas storage levels are just over 40%, down from 64% at this time last year and below the 5-year average of 51%.

This average is influenced by milder winters in recent years and the effects of the Covid pandemic.

This change in gas prices is not an isolated event. The decision by Germany’s utilities to seek lower storage targets reflects a wider concern about supply and demand heading into winter. Falling below the five-year average raises questions about whether European nations can comfortably meet their energy needs without resorting to last-minute purchasing at higher rates. The markets, predictably, reacted.

US involvement in Ukraine through mineral deals introduces another layer to the issue. The deal adds another dimension to Europe’s already complex energy network and could shift how traders assess risks in the short term. If companies expect more material movements from outside typical suppliers, pricing models may have to adjust accordingly.

With storage levels lower than in recent years, expectations for colder weather could influence contracts. If we start seeing long-range forecasts predicting an early or harsh winter, traders will be forced to be more aggressive in securing their positions. At the same time, political conversations around storage relaxation may lead to greater volatility or delays in decision-making, keeping contracts in limbo.

Alex, pushing the storage rule changes, argues that flexibility is needed to avoid unnecessary cost burdens. Some within the sector disagree, stating that relying on lower reserves could backfire if unexpected weather shifts occur or if supply chains weaken. These divisions matter because policy uncertainty will ripple through short-term derivatives markets.

On the US side, the latest agreement involving Ukraine affects futures pricing by subtly reinforcing an alternative route for securing critical materials. If more capacity is freed up in one area, we could see indirect impacts on gas deliveries elsewhere.

Some traders might be tempted to assume the market is stabilising after this price movement. That is an assumption that should be tested carefully. Price signals from Asia and the U.S. need to be watched closely since European demand could shift depending on how other buyers respond to similar supply concerns.

In the coming weeks, careful tracking of short-term weather models and continued discussion about European reserves will be decisive. Johannes, advocating for stricter targets, warns that scaling back now could leave the continent vulnerable. As the debate continues, positions will need to be adjusted based on whether any policy shifts materialise.

New winter supply arrangements—particularly those involving liquefied natural gas (LNG)—should also be monitored. If LNG deliveries become irregular, effects on TTF could be immediate. Continuing price movements may reflect traders repositioning based on the probability of an underprepared storage framework.

Traders should look out for more detailed policy announcements in the next fortnight. Forecast variations or unexpected production updates from major suppliers may lead to price swings that affect forward contracts more than expected.

Mortgage applications in the US decreased by 1.2% for the week ending 21 February 2025, compared to a decline of 6.6% the previous week.

This reduction is primarily attributed to a drop in refinancing activity, indicating a shift back to a quieter housing market after a brief increase at the year’s start.

Meanwhile, purchase applications saw only a modest change, suggesting that homebuyers are not rushing into the market despite lower refinancing numbers. The shift follows a period of increased activity during early January, when falling mortgage rates briefly encouraged more homeowners to refinance. Now, with rates stabilising and fewer borrowers seeing financial benefits from refinancing, demand has eased.

Recent remarks from Jerome indicate that policymakers remain focused on long-term stability rather than short-term market reactions. While no immediate adjustments to monetary policy were outlined, his tone reinforced expectations that interest rates will not see abrupt changes. This aligns with previous comments from other Federal Reserve officials, who have repeatedly pointed to a data-driven approach.

Labour market reports continue to show resilience, reducing the likelihood of any sudden rate cuts. Wage growth remains steady, and unemployment figures have not deviated much from expectations. If job numbers continue on this trajectory, the central bank has little reason to adjust its stance in the coming weeks. Inflation data also suggest that price pressures are easing gradually, giving policymakers room to observe before making any moves.

Further insight came from Lael, who emphasised the importance of keeping inflation on a controlled path over the coming months. Her statement reinforced the message that while progress has been made, officials want to ensure price stability before considering rate reductions. Market participants should recognise that this approach will likely lead to continued rate steadiness unless fresh data shifts the outlook.

The bond market reacted with muted movement following these comments, showing that expectations for policy adjustments remain largely unchanged. Treasury yields have held within a narrow range, reflecting a calm response from traders who see little chance of unexpected shifts in the near term. Equity markets also displayed minimal reaction, as investors had already priced in a steady policy approach.

Looking ahead, the focus stays on upcoming inflation figures and employment reports. Any surprises in these areas could prompt markets to adjust their projections, but current indications suggest a steady path forward.