Daily Alert – Tuesday 18th January 2022: Oil rises on Yemeni drone attack

Mark NugentDaily Alert, Jan 2022

Daily Alert – Tuesday 18th January 2022: Oil rises on Yemeni drone attack

Good morning.

Oil is being driven up after Iran-backed Yemeni fighters launched a drone attack on the United Arab Emirates.

The US was on holiday yesterday and, predictably, the markets were quiet.

The Bank of Japan kept their negative interest rate unchanged but forecast higher inflation. Japan has been unusually resilient to inflation as Japanese manufacturers absorb raw material price increases but now the Bank of Japan is forecasting rising inflation, although there is currently no expectation of inflation getting to the bank’s mandated target of 2 percent. So, no interest rate hikes anytime soon from the Bank of Japan. The JPY fell.

There’s little left on the calendar today, only API oil inventories which is a secondary issue compared to fun and games like drone strikes.

Risk sentiment as of 830am GMT is negative with equities falling. It’s good to see this from a trading point of view as it simply gives us better pricing for the inevitable reversal.

We’ll be back tomorrow.

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