WTI experiences losses on market caution, moves below $84.00
- Crude oil retraces the recent gains as investors adopt caution ahead of Fed decision.
- Investors await Chinese PMI data; seeking cues on world's leading crude importer’s economic scenario.
- Upward 10-year US Treasury yield could provide support in underpinning the US Dollar.
Western Texas Intermediate (WTI) trades lower near $83.90 per barrel during the European session on Monday. Investors are approaching the upcoming US Federal Reserve policy meeting and China's manufacturing data with caution, leading to a decline in crude oil prices. This cautious stance is overshadowing the support previously provided by tensions in the Middle East.
Crude oil prices saw an increase on Friday as Israel expanded ground operations in Gaza. This has raised concerns about the potential widening of the conflict in a region responsible for a third of global oil production.
Looking at China, the upcoming release of manufacturing and services PMI data for October is eagerly awaited. Investors seek for signals indicating stabilization in the world's leading crude importer's economy. Market participants are particularly interested in gauging whether supportive measures implemented by Beijing have contributed to an improvement in Oil demand.
The US Dollar (USD) encounters resistance as market expectations lean towards the likelihood of the US Federal Reserve (Fed) maintaining interest rates at 5.5% in the upcoming Wednesday meeting. However, the US Dollar Index (DXY) shows positive movement post lukewarm intraday performance during the Asian session, hovering around 106.70 as of now.
The 10-year US Bond experiences a rebound, reaching 4.85% at the moment, providing support to the Greenback. Additionally, investors will closely monitor key indicators such as the US ADP Employment Change and the ISM Manufacturing PMI for October.