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Daily Outlook: The U.S. announced the release of 50 million barrels of crude oil from its strategic reserves, thus challenging OPEC+


The U.S. announced the release of 50 million barrels of crude oil from its strategic reserves, thus challenging OPEC+:

The United States will release 50 million barrels of crude oil from its strategic oil reserves to coordinate actions with China, Japan, India, South Korea, and the United Kingdom. The unprecedented move by some of the world's largest oil consumers to suppress oil prices may trigger a rebound in OPEC+. The White House stated on Tuesday that 32 million barrels of this will be released in exchange from the US Strategic Petroleum Reserve in the next few months, and 18 million barrels will be released at an accelerated rate based on previously authorized sales. This is one of the largest releases of crude oil reserves in the history of the United States, surpassing the scale of US intervention during the turmoil in Libya in 2011 and Operation Desert Storm in 1991.


Investors' inflation concerns continue to cool, and the market has increased their bets on the Fed's turn to eagle:

Bond traders’ expectations for U.S. inflation have cooled for the fifth consecutive day, as U.S. President Biden’s decision to nominate Powell as chairman of the Federal Reserve will help to consolidate market expectations that the Fed will take more stringent actions to curb consumer price increases. With officials such as Richard Clarida suggesting that the Fed may accelerate the rate of downsizing, the market’s implied inflation expectations have fallen from the record high set earlier this month, and traders have also raised their outlook for next year’s policy tightening. . The overall US inflation rate, which was largely driven by supply chain disruptions and policy stimuli, jumped to 6.2% last month, the highest in three decades.


The Bank of New Zealand is expected to raise interest rates to curb inflation, and hinted that the pace of tightening will accelerate in the future:

The Bank of New Zealand is expected to raise interest rates for the second consecutive month, and hinted that in the face of labor shortages, it will adopt a more aggressive tightening cycle to curb inflation. Among 23 economists surveyed, 21 believe that the Bank of New Zealand will raise the official cash rate by 25 basis points to 0.75% on Wednesday. Two economists expect to raise interest rates to 1%, and investors believe that the central bank has the possibility of raising interest rates by 50 basis points. However, the Bank of New Zealand may raise interest rates by 25 basis points, while hinting that the pace of tightening will accelerate in the future.


The Governor of the Bank of England said that quantitative easing must eventually be withdrawn, indicating that he may support the reduction of bond holdings in the future:

Bank of England Governor Andrew Bailey said that the 895 billion pounds ($1.2 trillion) bond purchase plan implemented during the COVID-19 pandemic will eventually be withdrawn. "The size of the balance sheet cannot be this large forever," Bailey said in a testimony to the Economic Affairs Committee in the House of Lords on Tuesday. “There is a need to downsize, and a balance sheet policy is needed.” This is consistent with the Bank of England’s plan to stop purchasing assets at the end of this year and consider when to tighten monetary policy.


U.S. regulatory agencies have released roadmaps and new policies, and cryptocurrency regulatory thinking is taking shape:

The U.S. banking regulator provided more information on the cryptocurrency regulatory program on Tuesday, released a to-do list of priorities for next year, and announced a new policy that banks must obtain special permits before launching cryptocurrency business. According to a joint statement, agencies such as the Federal Reserve issued an agenda outlining some key areas, including how they plan to regulate custody services, cryptocurrency loans, and the possibility of establishing capital requirements. In addition, the Office of the Comptroller of the Currency stated that banks must obtain additional approval from the agency before they can conduct digital currency business.


The Turkish lira exchange rate hits a record low. The president of the country previously defended low interest rates:

The Turkish lira exchange rate hit a record low on Tuesday after President Erdogan defended measures to cut interest rates to boost economic growth and job growth. The lira fell below the level of 12 lira to the dollar, and it was reported at 12.0580 at 11:28 Istanbul time, down 5.6%.


The International Atomic Energy Agency ended its trip to Iran and failed to provide a solution for breaking the deadlock:

The United Nations nuclear inspectors ended their talks with Iran's top diplomat on Tuesday, but they failed to fully resolve concerns about inspecting the locations of sensitive nuclear facilities and may put pressure on the resumption of negotiations between Iran and major powers in the world next week. Iran’s Ministry of Foreign Affairs issued a statement after the meeting in Tehran on Tuesday, stating that Iran’s Minister of Foreign Affairs Hossein Amirabdollahian and IAEA Director General Rafael Mariano Grossi pledged to cooperate in solving “technical issues” in the coming months. Iran also expressed its “strong willingness” to engage in constructive contact with this nuclear supervisory agency, but stated that the International Atomic Energy Agency “should avoid taking a political stance on the country’s nuclear program”.

Risk Warning: The above content is for reference only, and does not represent JRFX’s position. JRFX does not assume any form of loss caused by any trading carried out in accordance with this article. Please consult your financial planner for your investment portfolios and manage your own risk.

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