Daily Market Report - Wednesday, Sep 6, 2023


Crude oil prices spiked to fresh ten-month highs on Tuesday after the largest oil producers & exporters namely Saudi Arabia and Russia agreed to extend their voluntary oil production cuts through the end of this year, trimming 1.3 million barrels of crude out of the global market and boosting energy prices.

The Saudi production cut of 1 million barrels per day, which first took effect in July, will continue "until the end of December 2023," the kingdom's Energy Ministry said in a statement. Russia, the world’s second-largest oil exporter has added its own voluntary export cuts in recent months, with Deputy Prime Minister Alexander Novak adding on Tuesday that its 300,000 b/d export reduction would stay in place until the end of the year.

“This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” the Saudi Press Agency report said.

However, considering the strong bounce the upside momentum was limited due to the concerns about the health of the Chinese economy continuing after the services PMI at the world’s largest crude importer disappointed.


European stocks opened lower following the release of disappointing German factory orders data. The factory orders at German factories dropped to 11.7% in July, a further indication of declining demand for goods from Europe’s largest economy. US stock futures remain under pressure as markets bet on more Fed interest rate hikes. On Tuesday, Fed Governor Waller stated that "there's nothing that is saying we need to do anything imminent anytime soon, so we can just sit there, wait for the data, see if things continue".


Crude oil futures traded flat on Wednesday Morning as investors obsessively waiting for the next batch of economic data which included the US ISM PMI and weekly crude inventory report. Overall, the momentum remained bullish throughout this month so far supported by a large crude inventory draw and OPEC+ cut expectations. U.S. crude stockpiles fell more than expected last week.

In the currency market, the Japanese Yen slightly recovered early losses against the US dollar following the comments from Japan's top currency diplomat Masato Kanda about the currency's persistent weakness. Masato Kanda said speculative moves will be dealt with "appropriately". The US dollar index hit a fresh 5-month high on Tuesday after the release of better-than-expected release of US factory orders data. The bullish momentum was also boosted after Goldman Sachs lowered its forecast of the probability of a US recession in the next 12 months to 15% down from 20%.


Gold price extended the reversal on the view the Federal Reserve may raise rates one more time to cope with persistently solid inflation. Fed Officials have signaled that additional rate hikes are on the table this year until there is more substantial evidence that high inflation has retreated for good. As of this writing, the metal trades below $1926. Moving ahead to the North American session, Gold investors and traders should closely monitor the release of US ISM services PMI data.

Economic Outlook

On the data front, Australia's Q2 GDP reports modest growth for the seventh straight month, beating estimates. The recent report showed real gross domestic product rose 0.4% in the second quarter, slightly beating forecasts of 0.3%. That compared with an upwardly revised 0.4% growth in the first quarter. Through the year, the economy grew 2.1%, slowing from a 2.4% gain in Q1.

Moving ahead today, the important events to watch:

US – ISM services PMI: GMT – 14:00

Canada – BOC interest rate decision and statement: GMT – 14:00

US – Beige Book: GMT – 18:00

Technical Outlook and Review

From a technical perspective, the pair is maintaining a negative bias according to the weekly chart. If the bearish momentum continues, then the next key support area to watch is 1.0700 and 1.0680.


The important levels to watch for today: Support- 1.0700 and 1.0680 Resistance- 1.0770 and 1.0800.

GOLD: Technically the current price action signals suggest that the medium-term bearish trend remains intact. On the downside, the decline is more extensive, and it will be hard to rule out a run towards $1918/15 if the bearish momentum continues. On the flip side, the immediate resistance near $1932.

gold neww

The important levels to watch for today: Support- 1920 and 1915 Resistance- 1932 and 1938.

Quote of the day “The investor’s chief problem—and his worst enemy—is likely to be himself. In the end, how your investments behave is much less important than how you behave.” ~ Benjamin Graham.
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