The spread of the coronavirus in Asia continues to worsen, with Japanese authorities stating that the outbreak in Tokyo is out of control and urging for new measures to restrict mobility. Elsewhere in Australia, the lockdown of its two main cities could be extended, and in China, its main container port has already been closed.
Yesterday, the U.S. Energy Information Administration (EIA) lowered the expected demand for oil for the second half of 2021 by 500,000 barrels per day due to restrictions imposed after the expansion of the delta variant. The EIA stated in his latest report that the oil market might return to excess production in 2022 if OPEC + continues to eliminate its cuts and producers from outside the organization increase their supply.
Oil traded lower after the content of the EIA report was out, losing 1% and heading again towards the support level located around 66.40.
The all-important figure for July’s PPI report was published in the United States, showing an increase in production prices of 7.8% on a yearly basis, from a previous figure of 7.3%, surprising investors.
This reveals bottleneck problems in the global supply chain, which could be a serious obstacle in the way of inflation. The market practically did not react to this data, with the U.S. Dollar remaining stable against almost all its counterparts.
Important U.K. economic figures such as trade balance, manufacturing and industrial production and quarterly GDP were also out yesterday. The results were mixed, leading to the pound’s sell-off.
GBP/USD lost ground following the release of the economic figures, retreating after not being able to break above the 100-day SMA line located at 1.3927, which was acting as the main resistance. Below this level would be a support area in a wide range of prices ranging from 1.3670 to 1.3600.
Sources: Bloomberg, reuters.com.