Daily Close | Forex, Metals, Oil, Agriculture June 02, 2021



Antero Resources Corporation, an independent oil, and natural gas company acquires, explores for, develops, and produces natural gas, natural gas liquids, and oil properties in the United States. This signals that the oil market is tightening and demand is robust, paving the way for an oil rally. The start of the summer driving season in the United States, the world’s top oil consumer, has bolstered optimism over energy demand. The OPEC and its allies agreed at their latest meeting to continue easing production cuts gradually amid a rebound in oil prices.
Adding to the positive sentiment is the state of backwardation in the oil futures market, where later-dated contracts are cheaper than the near-term contracts. Notably, Brent crude jumped to the highest since May 2019 while U.S. crude advanced to the highest level since June 2018. This is especially true as gasoline demand jumped 9.6% on May 30, above the average of the previous four Sundays. The Organization of the Petroleum Exporting Countries (OPEC) expects stockpiles to decline by at least 2 million barrels a day from September through December.

United States

The Fed is still buying about $120 billion per month in Treasury securities and mortgage-backed securities, thereby adding systemic liquidity. So we ask: does the current tsunami of take-ups in the Fed’s O/N Reverse Repo facility matter, as tightener of systemic liquidity? Using our monetary policy tools, the Fed promotes maximum employment and price stability—two foundations of a strong, stable economy that can improve economic outcomes for all Americans.
Last year, the Fed issued a proposal for a strengthened, modernized CRA framework, with the objective of building broad support among both external stakeholders and participating agencies. The Fed is doing this to keep the banks healthy while reserves are flowing into savings instead of into the working economy. Last April, for instance, the Fed expanded the Paycheck Protection Program Liquidity Facility in order to broaden its reach to include some nondepository lenders. less At the end of March, the Fed reinstated the required reserves into the SLR of the banks.
But with the take-ups in the O/N Reverse Repo facility of $670 billion (to date), the Fed undid almost 6 months of Quantitative Easing. Money market and GSE (Government-sponsored Entities) funds are placed into the O/N RRP, and the Fed issues those investors Treasury securities as collateral for those placements. Commenting on the overall state of economic activity, the Fed found that: Tyler Durden (pseudonym) is the lead writer at ZeroHedge.
Research from our team of in-house analysts has been quoted by The Wall Street Journal, Bloomberg, MarketWatch, USA Today, Kitco, Reuters, US News & World Report, CNBC, and more. The major benchmarks are inching higher at midday, as Wall Street attempts to brush off after a muted start to June. Most Wall Street analysts believe AMC shares will drop significantly lower. However, because the Fed is continuing with the SOMA expansion, the net tightening is somewhat blunted.
Biotechnology concern is one of the best-performing stocks on the Nasdaq today. The Fed can contribute as well. (ZM) is also on Wall Street’s radar. The Fed does stealth Quantitative Tightening (QT) with the O/N RRP. 3, below) following the mandates of the US Treasury.