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Oil prices edge up, and Russia transfers record volumes on high seas

Oil is steadily rising in trading on Thursday amid expectations of increased demand. The easing of some quarantine restrictions in China promises the market a recovery in consumption this year, which supports the general optimism in the commodity sector.

Brent crude for March delivery was at $87.31 per barrel on the London ICE Futures Exchange by 17:39 London time, up 1.38% on the previous trading day.

The West Texas Intermediate for March delivery was at $81.22 a barrel on the New York Mercantile Exchange, i.e., 1.33% above the final value of the previous trading session.

Oil prices were also supported by the report on crude oil stocks in the US, which was published on Wednesday. The U.S. Energy Information Administration (EIA) reported that the country's commercial crude oil inventories rose by 0.5 million barrels during the week ending Jan. 20. Analysts had expected reserves to grow by 0.97 million barrels.

Distillate inventories continued to fall by 0.51 million, reflecting the cold weather in the country. Demand for refined products in the US declined slightly over the week, but still remained at quite comfortable levels for current prices - 19.5 million barrels per day.

Meanwhile, Bloomberg reported that Russia has transshipped record volumes of Urals oil at sea. According to the agency, a total of 19 million barrels of crude oil are likely to be transshipped in January and December. The report said that volume of such crude is expected to hit a record 14 million barrels in January alone.

Recall that at the beginning of December, the European Union prohibited the maritime transport of Russian crude oil and petroleum products. In addition to that, following the G7 plan, EU countries agreed to cap the maritime trade of Russian oil at $60 per barrel. Such a sanction measure led to the fact that the cost of freight began to grow rapidly. Vessels that transship crude at $60 and below are obliged to use insurance under the current conditions.

Bloomberg reported that sources said a fifth supertanker, or very large crude carrier (VLCC), are involved in transshipment of Urals. Three vessels have already departed for Asia, and two more are waiting for departure at the Spanish transshipment point.

The EU, among other sanctions measures, is also studying the possibility of imposing a price limit of $100 per barrel on Russian diesel fuel.

The EU is also studying the possibility of setting a price ceiling on oil products from Russia that are traded at a discount, such as fuel oil, at $45.

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TAIWAN CONSUMER CONFIDENCE IMPROVES SLIGHTLY ON STRONGER EXPECTATIONS

Taiwan's consumer sentiment strengthened for the first time in five months, albeit modestly, at the start of the year, led by the improvement in the households' perception of the general economic outlook, survey data from the National Central University's Research Center for Taiwan Economic Development, or RCTED, showed Monday.

The consumer confidence index rose to 59.73 from 59.12 in December. Among the six sub-indicators of the survey, five increased and one declined.

The biggest improvement was witnessed in the measure reflecting the view on the domestic economic situation in the next six months. The corresponding index added 1.25 points to reach 76.85.

Sub-indicators for the personal economic situation in the next six months and that for the intentions to invest in the stock market also climbed from the previous month.

Households also turned positive regarding big purchases this month. The indicator for employment expectations in the next half year increased slightly.

Meanwhile, the sub-index for the assessment of the domestic inflation in the next six months declined.

The survey was conducted over the telephone from January 18 to 21 among 2,900 people over the age of 20 in Taiwan.

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SOUTH KOREA INDUSTRIAL OUTPUT SLIPS 2.9% IN DECEMBER

Industrial production in South Korea was down a seasonally adjusted 2.9 percent on month in December, Statistics Korea said on Tuesday.

That was roughly in line with forecasts following the upwardly revised 0.6 percent increase in November (originally 0.4 percent).

On a yearly basis, industrial production sank 7.3 percent - shy of forecasts for a decline of 5.1 percent following the upwardly revised 3.4 percent decline in the previous month (originally -3.7 percent).

The all-industry index was down 1.6 percent on month and 0.8 percent on year.

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JAPAN MANUFACTURING PMI HOLDS STEADY IN JANUARY - JIBUN

The manufacturing sector in Japan continued to contract in January, and at a steady pace, the latest survey from Jibun Bank revealed on Wednesday with a manufacturing PMI score of 48.9.

That's unchanged from the December reading and remains beneath the boom-or-bust line of 50 that separates expansion from contraction.

The main positive influences on the headline PMI came from slower cutbacks to production and a smaller decline in new orders. January data pointed to only a modest reduction in output levels across the Japanese manufacturing sector, with the speed of decline the slowest since October 2022.

Survey respondents noted that production schedules were curtailed due to weaker customer demand and more subdued underlying business conditions, especially across the electronics supply chain. At the same time, some firms commented on a boost from improved materials availability and efforts to replenish inventories.

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POUND REBOUNDS AFTER BOE DECISION


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As expected, the Bank of England raised its key rate by 50 basis points to 4 percent from 3.50 percent. Following the decision, the pound recovered against its major counterparts. The pound was trading at 1.2368 against the greenback, 158.17 against the yen, 1.1244 against the franc and 0.8896 against the euro around 7:04 am ET.


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JAPAN SERVICE SECTOR ACCELERATES IN JANUARY - JIBUN


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The services sector in Japan continued to expand in January, and at a faster pace, the latest survey from Jibun Bank revealed on Friday with a services PMI score of 52.3. That's up from 51.1 in December and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Anecdotal evidence suggested that the recovery from the COVID-19 pandemic continued in January thanks to the easing of restrictions. A number of respondents indicated that the National Travel Discount Program had added an extra boost to domestic travel. As well as helping to boost activity, these factors also supported new business at the start of the year. The survey also said that the composite index improved to 50.7 in January from 49.7 in December.


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ESTONIA INDUSTRIAL PRODUCTION SLUMPS 11.6%

Estonia's industrial production continued to decline sharply at the end of the year, data from Statistics Estonia showed on Monday.

Industrial production contracted 11.6 percent year-on-year in December, slightly slower than the 12.2 percent rise in the previous month. Further, this was the fourth successive monthly decrease.

Among the main sectors, mining and quarrying output fell the most by 14.7 percent annually in December, which was worse than the 11.1 percent fall in the prior month.

Manufacturing production also registered a double-digit negative growth of 11.5 percent, and output produced in the utilities sector plunged 13.1 percent.

In energy production, the volume of electricity production decreased by 16.2 percent and the production of heat by 10.7 percent annually, the agency said.

On a seasonally adjusted basis, industrial production recovered 2.1 percent monthly in December, reversing a 3.8 percent drop in November. It was the first increase in four months.

In 2022, total industrial production declined 1.9 percent compared to 2021, largely led by a 2.7 percent fall in manufacturing output.

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AUSTRALIA CENTRAL BANK HIKES RATE BY 25 BPS

Australia's central bank raised its benchmark rate by a quarter-point on Tuesday, as widely expected.

At the first meeting of the year, the board decided to lift the cash rate target by 25 basis points to 3.35 percent.

The interest rate on Exchange Settlement balances was also raised by 25 basis points to 3.25 percent.

The current sequence of policy tightening has taken the cash rate target to 3.35 percent from 0.10 percent, indicating a total 325 basis-point increase since April 2022. RBA Governor Philip Lowe said further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary.

"The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that," Lowe said.

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INDIA CENTRAL BANK HIKES RATE FOR SIXTH STRAIGHT MEETING

India's central bank raised its benchmark rates for the sixth consecutive meeting, as widely expected, on Wednesday.

At the end of its three-day monetary policy meeting, the Monetary Policy Committee of the Reserve Bank of India decided to raise the policy repo rate by 25 bps to 6.50 percent.

Four members including Governor Shaktikanta Das voted in favor of a quarter point rate hike, while two members voted against the proposition.

Members also voted 4-2 to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.

"The MPC is of the view that further calibrated monetary policy action is warranted to keep inflation expectations anchored, break core inflation persistence and thereby strengthen medium-term growth prospects," the governor said.

Das said inflation is seen at 6.5 percent in the current financial year, down from 6.7 percent estimated previously. Based on the assumption of a normal monsoon, inflation is projected at 5.3 percent for 2023-24.

Real economic growth for 2023-24 is projected at 6.4 percent, with risks broadly balanced.

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U.S. WEEKLY JOBLESS CLAIMS REBOUND SLIGHTLY MORE THAN EXPECTED

A report released by the Labor Department on Thursday showed first-time claims for U.S. unemployment benefits rebounded by slightly more than expected in the week ended February 4th.

The Labor Department said initial jobless claims rose to 196,000, an increase of 13,000 from the previous week's unrevised level of 183,000. Economists had expected jobless claims to inch up to 190,000.

The uptick came after jobless claims decreased in four out of the five previous weeks, falling to their lowest level since hitting 181,000 in the week ended April 23, 2022.

Meanwhile, the report said the less volatile four-week moving average edged down to 189,250, a decrease of 2,500 from the previous week's unrevised average of 191,750.

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CHINA CONSUMER PRICES RISE 0.8% ON MONTH IN JANUARY

Consumer prices in China were up 0.8 percent on month in January, the National Bureau of Statistics said on Friday.

That exceeded expectations for an increase of 0.7 percent following the flat reading in December.

On a yearly basis, consumer prices advanced 2.1 percent - missing forecasts for 2.2 percent but still higher than 1.8 percent in the previous month.

The bureau also said that producer prices dropped 0.8 percent on year versus expectations for a decline of 0.5 percent following the 0.7 percent drop a month earlier.

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DOLLAR RISES AGAINST MAJOR COUNTERPARTS ON RATE HIKE BETS

The U.S. dollar climbed higher against its major rivals on Friday, lifted by expectations the Federal Reserve will continue to hold interest rates higher for more time.

Data showing an improvement in consumer sentiment, and a rebound in near-term inflation expectations supported the dollar.

Data released by the University of Michigan this morning showed U.S. consumer sentiment saw a continued improvement in February. The report showed the consumer sentiment index rose to 66.4 in February from 64.9 in January. Economists had expected the index to inch up to 65.0.

The consumer sentiment index increased for the third straight month, reaching its highest level since hitting 67.2 in January 2022.

Meanwhile, one-year inflation expectations climbed to 4.2% in February from 3.9% in January, with expectations rebounding after falling for three straight months.

Richmond Fed President Thomas Barkin said it's important for the U.S. central bank to continue to raise rates to ensure it brings inflation back to the 2 percent target. The dollar index surged 103.68 before easing slightly to 103.59, still up 0.36% from the previous close.

Against the Euro, the dollar firmed to 1.0680 from 1.0743.

The dollar strengthened to 1.2060 against Pound Sterling, gaining from 1.2121.

Against the Japanese currency, the dollar eased marginally to 131.38 yen.

The dollar is trading at 0.6917 against the Aussie, rising 0.3%. Against Swiss franc, the dollar advanced to CHF 0.9238 from CHF 0.9222. Against the Loonie, the dollar firmed to C$ 1.3445 from C$ 1.3359.

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SINGAPORE GDP GROWS 0.1% ON QUARTER, +2.1% ON YEAR IN Q4

Singapore's gross domestic product expanded a seasonally adjusted 0.1 percent on quarter in the fourth quarter of 2022, the Ministry of Trade and Industry said on Monday.

That missed expectations for an increase of 0.3 percent following the 0.8 percent gain in the third quarter.

On a yearly basis, GDP was up 2.1 percent - again shy of expectations for 2.3 percent following the upwardly revised 4.0 percent increase in the three months prior (originally 2.2 percent.

For all of 2022, GDP expanded 3.6 percent, slowing from 8.9 percent in 2021.

Upon the release of the data, the MTI maintained its growth forecast for 2023 at 0.5 to 2.5 percent.

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IRELAND CONSTRUCTION SECTOR LOGS CONTRACTION IN JANUARY

Ireland's construction sector posted another contraction in January albeit at a slower pace, survey results from S&P Global showed on Monday.

The BNP Paribas Real Estate Ireland Construction Total Activity Index rose to 47.7 from 43.2 in December.

However, a reading below 50.0 indicates contraction. The latest decrease was the softest since the current downturn first began last October.

The contraction was broad based across all three categories in January. Civil engineering posted the biggest fall in January as has been the case over the past eleven months. Meanwhile, commercial activity posted the softest fall, while housing activity decreased for the fourth month in a row.

Although firms struggled to secure orders, the decline in orders was the joint-weakest in the current ten-month sequence of decline. Further, survey showed that firms raised their workforce for the first time in three months.

Input price inflation continued to increase across a broad range of products. But the rate of inflation eased for the second consecutive month. At the same time, sub-contractor rates increased at an accelerated pace.

The outlook for activity over the coming 12 months brightened in January with sentiment rising to an 11-month high. Firms expect an improvement in demand conditions with new projects set to start in months ahead.

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JAPAN GDP RISES 0.2% IN Q2

Japan's gross domestic product expanded a seasonally adjusted 0.2 percent on quarter in the fourth quarter of 2022, the Cabinet Office said on Tuesday.

That was shy of expectations for an increase of 0.6 percent following the downwardly revised 0.3 percent contraction in the third quarter (originally -0.2 percent).

On an annualized basis, GDP added 0.6 percent - again missing forecasts for an increase of 2.0 percent following the downwardly revised 1.0 percent decline in the three months prior (originally -0.8 percent).

Capital expenditure was down 0.5 percent on quarter, missing forecasts for a fall of 0.2 percent, while private consumption matched expectations with an increase of 0.5 percent on quarter.

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EUROPEAN ECONOMIC NEWS PREVIEW: UK INFLATION DATA DUE

Consumer and producer prices from the UK are due on Wednesday, headlining a light day for the European economic news.

At 2.00 am ET, the Office for National Statistics releases UK consumer and producer prices for January. Consumer price inflation is forecast to ease to 10.3 percent from 10.5 percent in December.

Economists forecast UK output prices to grow 13.3 percent in January from the last year, slower than the 14.7 percent increase in December. Likewise, input price inflation is seen easing to 14.7 percent from 16.5 percent.

At 3.00 am ET, Spain's INE publishes final consumer and harmonized prices for January. Inflation is forecast to rise slightly to 5.8 percent, as initially estimated, from 5.7 percent in December.

At 5.00 am ET, Eurostat publishes euro area industrial production and foreign trade figures. Industrial output is expected to fall 0.8 percent on month, reversing November's 1.0 percent increase. The trade deficit is seen widening to EUR 12.5 billion in December from EUR 11.7 billion in November.

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DUTCH JOBLESS RATE RISES SLIGHTLY TO 3.6%

The Netherlands' unemployment rate increased slightly in January from a six-month low in December, data from the Central Bureau of Statistics showed on Thursday.

The seasonally adjusted ILO jobless rate for the 15-75 year old age group rose to 3.6 percent in January from 3.5 percent in December. In the corresponding month last year, the unemployment rate was also 3.6 percent.

The number of unemployed increased to 360,000 in January, up from 352,000 the previous month.

The youth unemployment rate, which applies to the 15 to 25 age group, climbed to 7.8 percent in January from 7.5 percent in the prior month.

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SWISS INDUSTRIAL PRODUCTION EXPANDS 6.1% IN Q4

Switzerland's industrial production continued to expand strongly in the fourth quarter on the back of sharp growth in the manufacturing sector, while construction output contracted, the Federal Statistical Office reported on Friday.

Industrial production rose 6.1 percent year-over-year in the fourth quarter, slightly faster than the 6.0 percent rise in the third quarter.

Production in the manufacturing sector grew 7.9 percent, while the mining and quarrying segment logged a negative growth of 3.0 percent. Electricity supply also slumped 10.3 percent.

Secondary sector production, which combines industry and construction, grew 4.1 percent annually in the December quarter, following a 3.7 percent gain in the September quarter.

Meanwhile, construction output declined 5.5 percent, slower than the 8.8 percent plunge in the preceding three-month period. Industrial turnover advanced 8.7 percent in the fourth quarter and construction turnover rose 2.7 percent.

The growth in production and turnover has been uninterrupted since the first quarter 2021, the agency said.

In December, industrial production climbed 8.6 percent year-on-year, following a 1.0 percent growth in November.

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EUROPEAN ECONOMIC NEWS PREVIEW: BUNDESBANK MONTHLY REPORT DUE

A monthly report from Germany's central bank is the only major data due on Monday, headlining a light day for the European economic news.

At 2.00 am ET, Statistics Sweden is scheduled to issue consumer prices for January. Consumer price inflation is forecast to ease to 11.8 percent from 12.3 percent in December.

At 4.00 am ET, industrial production, producer prices and employment figures are due from Poland. Industrial production is seen growing 4.3 percent annually in January after rising 1.0 percent in December. Economists forecast producer price inflation to slow to 18.5 percent from 20.4 percent a month ago.

At 5.00 am ET, Eurostat releases euro area construction output data for December.

At 6.00 am ET, Germany's central bank is set to publish the February edition of the Monthly Report that comments on the economic situation during the winter 2022/23.

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European stock indices decline moderately during trading

The composite index of the largest companies in the region Stoxx Europe 600 by 12:33 GMT + 3 fell by 0.05% and amounted to 464.09 points.

The British stock index FTSE 100 fell by less than 0.1%, the German DAX - by 0.24%, the French CAC 40 - by 0.31%. The Italian FTSE MIB and the Spanish IBEX 35 lost 0.1% and 0.3% respectively.

Trading activity in world markets is expected to be lower than usual on Monday due to the celebration of Presidents Day in the US.

Stocks in Shanghai and Hong Kong rose sharply on Monday on news that the People's Bank of China kept its one-year Loan Prime Rate at 3.65% and the five-year lending rate at 4.3%. per annum.

People's Bank of China has not changed rates for six meetings in a row. At the same time, many economists believe that in the coming months the rate may be lowered to stimulate economic growth, writes Bloomberg.

On Wednesday evening, the minutes of the last Fed meeting will be made public, at which the key interest rate was raised by 25 basis points.

Investors are particularly looking forward to the minutes as several Fed officials, including the heads of the Federal Reserve Banks of Cleveland and St. Louis, said last week that they were calling for a sharper rate hike.

Shares of Pernod Ricard SA rose 0.1%. One of the world's largest producers of alcoholic beverages announced the start of a new stage of the share buyback program. The purchase of securities in the amount of up to 300 million euros will take place before April 6 and will be carried out as part of a total program of 750 million euros.

Stellantis and Pirelli are up 2%, leading gains on the Milan bourse, while Telecom Italia shares are down 2.9%.

Capitalization of the British retailer Frasers Group rose by 3.5% after the company announced a share buyback worth up to 80 million pounds ($96.26 million).

Quotes of Commerzbank AG fall by 2.7%. As reported, the shares of Germany's second-largest bank will be included in the calculation of the main German stock index DAX 40 from February 27 instead of the papers of the chemical company Linde, according to a report by Deutsche Boerse AG, operator of the Frankfurt stock exchange.

French supermarket chain Carrefour jumped 8% in market value to lead growth in the Stoxx Europe 600 index. The retailer reported annual revenue of more than 90 billion euros and recorded an 11% increase in like-for-like sales in the fourth quarter of last year.

The decline leader in the Stoxx Europe 600 is Raiffeisen Bank International, shedding 7.6%, while the gainer was led by French medical equipment maker Orpea S.A., which jumped 17.7%.

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