Does news that U.S. will let Russia’s big aluminum producer avoid sanctions remove this wild card from commodities and stock markets?
U.S. Treasury Secretary Steve Mnuchin said today that Russian metals giant Rusal, could get sanctions lifted if Putin-connected oligarch Oleg Deripaska relinquished control. The Treasury also gave Rusal a five month extension as it considered Rusal’s appeal of the sanctions. Commodity prices–especially aluminum–fell on the news.
The dollar continued its fall today after European Central Bank president Mario Draghi voiced minimal concern over the rise in the euro. That currency topped $1.25 for the first time since 2014. The MSCI Emerging Markets Currency Index jumped 0.9%, its biggest leap in more than a year.
On Sunday the Chinese government announced that the headline Consumer Price Index (CPI)rose at a year over year rate of 1.8%. Economists had expected a 1.6% increase. The August rate was the fastest pace since January. Core CPI, that is without the effect of volatile prices for energy and food, rose at a 2.2% year over year rate.
West Texas Intermediate was down 2.74% to $48.90 a barrel today as of noon New York time. International benchmark Brent crude was lower by 2.60% to $51.73 a barrel. The drop in West Texas Intermediate brought the price per barrel below the psychologically important $50 level. Oil had already tumbled 5.7% in the last three trading sessions.