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In an interview on Dubai TV, Mohammed Hashad, Head of Research and Development Department at Noor Capital and a member of the US Society of Technical Analysts, commented on the latest developments of the financial markets
The fear of the shortage of supplies led the American crude oil to the highest level in two months, and the barrel of oil was seen above the level of 116.30 cents per barrel. There are two reasons for fear; the first is the scarcity of supplies and fuel, especially with the upcoming summer demand season in the United States and Europe, which makes the fear of a decrease in the oil supply dominates the market. The second reason is that there is no alternative to Russian oil. Russian oil plays a key role in the oil markets. Alternatives need many years and huge investments for a country like Venezuela to return to producing only 2 million barrels per day.
The current trend of all central banks is to raise interest rates, led by the Federal Reserve, which continues to raise interest rates to control inflation levels, but raising interest rates is not a magic wand that can push inflation levels towards the target. Still, we may see more moves that may exceed expectations. For example, central banks or governments may increase taxes or even return to open market operations.
This week we are waiting for the US jobs data and unemployment rates, and I believe unemployment levels may continue to fall below the 3.5% level. I expect the jobs data to be weaker than expected, but it will not affect the Fed’s decision but may only affect the amount of the hike.
