US stocks stabilize in first session of the week

Markets await economic data and earnings reports from major companies

By Raed Alkhedr | @raedalkhedr | 5 July 2023

  • Oil prices continue to stabilize near $80 per barrel

  • US markets are eagerly anticipating important economic data to be released this week

  • The Japanese yen experiences strong selling pressure following statements made by the Bank of Japan governor

Oil prices are continuing to stabilize near $80 per barrel

According to some sources, Aramco will supply many buyers in North Asia with a full month's contract in May, despite its commitment to reducing production by 500,000 barrels per day.

This move comes after OPEC+ and its allies surprised the markets last week by announcing an additional cut in production of 1.16 million barrels per day from May for the rest of the year. The announcement caused futures for Brent crude and West Texas Intermediate crude to rise by 6% last week, returning to levels last seen in November. Currently, prices are stabilizing near $80 per barrel for West Texas Intermediate.

Last week, Saudi Aramco also surprised the market by raising the price of its main Arab light crude oil, which it sells to Asia, for the third consecutive month in May. It also raised prices for other oil grades for Asian customers due to expectations of a contraction in supply in the market.

US Stocks Stabilize in First Session of the Week

On Monday, futures for the S&P 500 index remained flat as investors kept a close eye on inflation data and quarterly earnings reports from several companies. The market saw significant volatility throughout the previous week, with fluctuations between disappointing economic data and improved performance in the job market, leading to a rise in futures for stocks and treasury yields. Additionally, US markets were closed on Good Friday in observance of the holiday.

Investors are bracing themselves for a week full of important economic data, including the latest consumer price index and producer price index data scheduled to be released on Wednesday and Thursday, respectively. These data will be crucial in determining whether the Federal Reserve will continue to raise interest rates or prefer to begin changing the current monetary policy. Furthermore, several companies, including JP Morgan and Citigroup, are expected to announce their quarterly earnings this week.

Japanese yen under pressure after Bank of Japan Governor's statement

The Japanese yen is facing strong selling pressure as it experienced significant declines in the first session of this week. This comes after Bank of Japan Governor Kazuo Oyama indicated in his first statement that it is important to continue the current monetary policy to control the yield curve. As a result, the USD/JPY pair saw a significant rise and is now stabilizing near the 133 levels. Last week, the yen saw notable gains due to increased demand for safe-havens, causing the USD/JPY pair to fall to the 130.60 levels before rising again.