Oil quotations remain under pressure. The US labor market is cooling in the US

Economic news from the US on Tuesday was mixed. On the bullish side, the ISM Services Business Activity Index for November rose by 0.9 to 52.7, beating expectations of 52.3. In contrast, the October JOLTS Job Openings Index fell by 617,000 to a 2-year low of 8.733 million, indicating a weaker labor market than expectations of 9.300 million.

The ECB’s monthly inflation expectations survey showed that expectations for 1-year inflation in October were unchanged from September at 4.0%, above expectations of 3.8%. 3-year inflation expectations were 2.5%, unchanged from September and in line with expectations. ECB Executive Board spokesperson Schnabel said yesterday that another ECB interest rate hike is rather unlikely.

The build-up in US crude oil exports is putting pressure on oil prices. In addition, the rise in the dollar index to a one-week high on Tuesday was a negative factor for oil. In addition, Saudi Arabia’s actions to cut official oil selling prices for Asian buyers for January delivery is a negative factor for oil. Russian Deputy Prime Minister Novak said OPEC+ may take additional measures if last week’s production cuts fail to balance the oil market.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 1.37%, China’s FTSE China A50 (CHA50) lost 2.55% yesterday, Hong Kong’s Hang Seng (HK50) fell by 1.91% on the day, and Australia’s ASX 200 (AU200) was negative 0.89% on Tuesday.

China’s Shanghai Composite index fell to a 5-week low as Moody’s Investors Service cut its outlook on China’s sovereign debt from stable to negative, weighing on global growth prospects. According to the median forecast of 28 economists surveyed, China’s exports are expected to decline 1.1% in November from a year earlier, following a 6.4% drop in October and continuing a downward trend for the fourth consecutive month.

Australia’s real gross domestic product (GDP) rose by 0.2% in the July-September quarter from the previous quarter, marking the eighth consecutive quarter of growth, albeit the slowest in a year. Australia’s economy barely grew in the third quarter as exports contracted and households suffering from soaring mortgage payments were reluctant to spend, suggesting higher rates are curbing demand.

Ryozo Himino, deputy governor of the Bank of Japan (BoJ), said the central bank should determine the timing and appropriate structure of the exit from ultra-loose monetary policy while closely monitoring developments in wages and prices. He also noted that Japan is making progress in exiting the protracted period when wage and price growth remained stagnant.