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AUD/USD bulls eye a break into the 0.67s
The Australian Dollar edged higher and continued to correct from the four-month lows as a rescue package for First Republic Bank eased market concerns. AUD/USD remains on the backside of the prior bear trend and breaking out.
EUR/USD bulls are in the market eyeing 1.0700
EUR/USD has started out the day on the bid following the news that Switzerland’s UBS has reached a deal to buy struggling rival Credit Suisse after an intense weekend of negotiations. The 50 bps move from the European Central Bank on March 16 was accompanied by a risk-on the environment which has been weighing on the US Dollar.
Gold is front side of the trend ahead of the Fed
Gold price printed a fresh 11-month high at $1,988.33 on Friday. The precious metal is approaching the psychological resistance of $2,000.00 and is expected to test soon as the odds of an unchanged interest rate policy by the Federal Reserve (Fed) have accelerated dramatically.
Will the Fed see a decline in inflation expectations?
US inflation expectations are declining, which could be good news for the stock market, suggesting less pressure on the Fed to raise interest rates. The University of Michigan’s inflation expectations index for the year ahead fell to 3.8%, the lowest since April 2021.
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The oil and gas industry across the United States is facing continued downturn, as the United States Baker Hughes US oil rig count declined to 589 from its previous figures of 590.
According to the US oil rig counts released by the Baker Hughes, the decline was observed across all major geographical regions, including the US Gulf of Mexico (GOM), Permian Basin and the Eagle Ford. The decline in the rig count can largely be attributed to the lack of capital expenditure and discretionary spending in the current environment.
As per the latest data, the total US rig count declined by 1 unit compared to the previous week, with a total of 887 active rigs being present. This is the lowest figure since the counts were initiated more than a decade ago. The decline in the rig count does not bode well for the performance of the US oil industry, as it suggests a decrease in the number of new wells that can be drilled.
The decline in the rig count has been largely due to the excessive volatility witnessed in the market. With diminishing demand from the global market, oil and gas companies have been forced to reduce their capital expenditure in order to conserve cash. This has resulted in a fall in the number of rigs being deployed to drill new wells.
The lower-for-longer environment has further impacted the US rig counts, as the companies have adopted a wait-and-watch approach towards new drilling operations. This has forced the companies to reduce the human resources and keep the number of active rigs to minimum, resulting in a decline in the overall US rig count.
While the decline in the US rig count is a cause of concern, industry experts believe that the US oil and gas industry will soon pick up with recovering demand. With the global economy regaining its footing, the rig count is expected to witness an upsurge in the coming days.
