U.S. benchmark West Texas Intermediate closed up 4.21% to $48.25 a barrel today, July 25. International benchmark Brent climbed 3.93% to $50.51 a barrel. Big moves. Exactly what you’d expect on a day when both OPEC and U.S. shale producers produced big news.
Today it’s JPMorgan Chase CEO Jamie Dimon telling a conference that the unwinding of central bank bond-buying programs is an unprecedented challenge that may be more disruptive than people think. Tomorrow it’s Federal Reserve chair Janet Yellen giving Congress some clue (maybe) on when the Fed will begin to reduce its $4.5 trillion portfolio of Treasury and mortgage-backed debt instruments.
What? Did the regional Federal Reserve banks all miss their money coffee? Their GDP forecasts released today all sure were grumpy. The most visible of the bunch, the Atlanta Fed’s GDPNow forecast calls for 2.9% growth in the second quarter. The forecast was looking for 3.2% growth on Wednesday.
China’s government has announced its new economic growth target for 2017. At “around” 6.5% it’s just a bit lower than the 2016 target of 6.5% to 7%. China’s GDP grew by 6.7% in 2016. The slight decline in the headline growth target is echoed throughout the government’s planning.
At the start of February, Bloomberg reports today, traders were long a net 865 million barrels of oil across the futures for West Texas Intermediate and Brent crude That was a record long position and a 78% increase since OPEC and 11 other producers had pledged at the end of November to cut their production beginning in January 2017.
Federal Reserve chair Janet Yellen certainly didn’t say anything new in her testimony in front of the Senate Banking Committee this morning. But that in itself was enough to push market expectations for a Federal Reserve interest rate increase higher. The Fed Funds futures market, according to Bloomberg, saw 34% odds on a March interest rate increase after her talk. That was up from 30% before she spoke.
