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Crude futures extended overnight gains of more than 5% after China reported zero locally transmitted COVID-19 cases. Expectations that the U.S. Federal Reserve would delay tapering its asset purchases, supported by weaker preliminary PMI data, also fed a risk-on rally.
Expectations of continued easy monetary policy weaken the dollar and support commodity demand, while China's containment supports oil demand, pushing prices higher.
spglobal.comAndrew TohAug 24, 2021After 487 past bullish macro events, Crude Oil (WTI) moved a median +1.0% over 5 sessions (60% higher; middle half -2.0% to +4.0%), and +1.5% over 20.
After 323 past bullish macro events, Crude Oil (Brent) moved a median +0.7% over 5 sessions (58% higher; middle half -2.9% to +3.7%), and +1.3% over 20.
After 1,637 past bearish macro events, US Dollar (Broad) moved a median -0.2% over 5 sessions (39% higher; middle half -0.6% to +0.3%), and -0.2% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Describes the overnight gains of more than 5% on China's zero local cases and expectations that the Fed would delay tapering, a risk-on and dollar-weakness mechanism. It is dated Aug 24 but describes the Aug 23 move.
