Bundesbank President Jens Weidmann said ECB’s monetary stance is “currently appropriate” and “at the moment I see no reason to deviate from our assessment.”
Indeed, he argued that the economy could turn out to be better than ECB’s baseline scenario, because the EUR 750B EU recovery package wasn’t counted in, nor the EUR 100B fiscal measures of France.
Weidmann warned that Fed’s average inflation targeting could result in an asymmetric target. Central bank would be loath to cause a recession just to bring inflation back to an average after a period of overshooting.
US oil inventories rose 0.5m barrels, WTI fails 40 handle
US commercial crude oil inventories rose 0.5m barrels in the week ending October 2. At 492.9m barrels, inventories are about 12% above the five year average for this time of the year. Gasoline inventories dropped -1.4m barrels. Distillate dropped -1.0m barrels. Propane/propylene inventories dropped -0.1m barrels. Commercial petroleum dropped -2.0m barrels.
Price actions in WTI crude oil remained very volatile but it still could regain 40 handle with conviction. After all, it’s staying in consolidative pattern from 43.50. Further rise cannot be ruled out for the moment. But even a break of 41.43 might be seen, we don’t expect a break of 43.50 high. Meanwhile, on the downside, any decline attempt should be contained by 34.36/35.98 support zone.