Tuesday, October 31, 2023

Crude slips in face of war; Xi to SF?

Oil prices fell Oct. 30. Equities were in the red ahead of a Federal Reserve policy meeting this week with traders fearing it will probably keep interest rates elevated for an extended period - possibly into January - as inflation remains high. 

Crude pared Friday's almost 3% gains even while Israel's military continued air and ground operations in Gaza that are tempering worries of an all-out war that could drag in Iran and the United States. 

The threat of a wider conflict remains, with Iran saying the battle could "force everyone to take action", while US National Security Advisor Jake Sullivan said there was an "elevated risk" of a spillover.

Observers said there was a sense of relief among investors for now, easing crude supply worries and taking some pressure off prices.

Still, equity markets struggled to build on Friday's rally in Asia, tracking losses in the S&P 500 and Dow. 

There was little relief for investors from data showing the Fed's preferred gauge of inflation remained at 3.4% in September - still above the bank's 2% target. 

Analysts said the still-high reading meant officials would likely err on the side of hawkishness with borrowing costs unlikely to fall soon. 

"Expectations are for the bank (the Fed) to stand pat" this week, said National Australia Bank's Rodrigo Catril.

"Inflation and labor market data releases between now and then are going to be important, including non-farm payrolls on Friday." (AFP 10/30/23) Crude slips on easing worries of region-wide Middle East war (energy-daily.com) 


US still planning for Xi's visit to San Francisco

The United States and China agreed on Oct. 27 to work towards setting up a meeting between the two countries' leaders next month, after President Joe Biden met Beijing's top diplomat at the White House.

Biden has invited Xi Jinping to San Francisco in November for the Asia-Pacific Economic Cooperation (APEC) summit at a time of tense relations between the two powers. Xi has not yet confirmed he will come.

After Chinese Foreign Minister Wang Yi held talks with Biden and other senior US officials in Washington, the White House said both countries had agreed to keep up "high-level diplomacy" to try to smooth ties.

The two sides "reaffirmed" that they were "working together towards a meeting between President Biden and President Xi Jinping in San Francisco in November," the White House said in a statement.

A senior administration official said the White House was leaving it to Beijing to confirm that Xi would come, but "we are making preparations for just such a meeting."

An official readout of talks between Wang and US National Security Advisor Jake Sullivan released by Beijing confirmed "both sides agreed to make joint efforts to realize a meeting between the two heads of state". (AFP 10/30/23) US, China agree to work towards Biden-Xi meeting next month (energy-daily.com)

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