Commodidex

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====== Interest Rates ======

Higher rates reduce liquidity in an economy, leaving less money with industries, thereby curtailing demand for oil.((https://archive.ph/XXzDS#selection-8041.0-8044.0))

<wrap hi>Lower interest rates increase liquidity in an economy and</wrap> also <wrap hi>bring down borrowing costs for the public</wrap>, thereby <wrap hi>lifting demand for commodities such as crude oil</wrap>.((https://archive.ph/O452M#selection-8037.69-8037.74))

==== Effect on Dollar ====

==== Growth-oriented and interest-rate-sensitive industries ====

Consumer Discretionary stocks suffered the most, plunging 4.5%, followed by Real Estate, which dropped 4% as <wrap hi>rising rates weigh heavily on growth-oriented and interest-rate-sensitive industries</wrap>.((https://archive.ph/t9DTG#selection-3005.0-3008.0))

==== Commodities ====

<wrap hi>Lower interest rates</wrap> bode well for commodities as it <wrap hi>reduces the borrowing costs for the public, while also increasing liquidity in the economy.</wrap>((https://archive.ph/SZbeC#selection-8139.0-8142.0))

Denn die Zahl der neugeschaffenen Stellen deutet auf eine völlig normale Entwicklung des Arbeitsmarktes hin, so dass man ihn weiterhin als abgekühlt bezeichnen kann, und <wrap hi>eine höhere Arbeitslosenquote spricht sogar für den Zinsschritt nach unten</wrap>.((https://archive.ph/Yfb1I#selection-5825.120-5825.365))

> Eine steigende Arbeitslosenquote (mehr Menschen ohne Arbeit) deutet darauf hin, dass die wirtschaftliche Aktivität schwächer wird. In solchen Fällen kann es sinnvoll sein, die Zinssätze zu senken. Niedrigere Zinsen fördern Investitionen und Konsum, was die Wirtschaft und damit auch den Arbeitsmarkt stützen kann.

Investors will also monitor the release of key economic data from the US later this week. Stronger data would likely prompt the US Federal Reserve to slow down the pace of its rate cuts going forward.((https://archive.ph/e3zcR#selection-8193.0-8193.201))

Elevated interest rates weigh on crude oil prices as it leaves less liquidity in the market and borrowing costs also climb.((https://archive.ph/e3zcR#selection-8197.0-8206.0))

In June, when Trafigura published unaudited results for the half-year ended March, the word “Mongolia” wasn’t even mentioned. The company did report a sharp increase in overdue receivables, but incoming Chief Financial Officer Stephan Jansma explained that higher commodity prices and interest rates meant that “importing countries from time to time will have issues in their payment profile.”((https://archive.ph/nKlAZ#selection-1945.0-1953.137))

An often-cited reason is that <wrap hi>stocks have always gone up with Fed cuts</wrap> which describes events but doesn’t explain the economic forces at play.((WSJ September 20, 2024))

Some analysts say that <wrap hi>when interest rates fall, earnings on equities rise relative to bonds</wrap>. This <wrap hi>causes market participants to shift their investments to equities from bonds, triggering stock prices to rise and bond prices to fall</wrap>.((WSJ September 20, 2024))

Current stock market prices tend to reflect the present value of firms’ expected long-term profit streams. The higher firms’ expected profits, the higher their stock prices. Profits in the future, dollar for dollar, are worth less than current dollars. This is because current prof- its can earn interest between now and the future, which means that future profits must be discounted by some percentage to make them equal to current profits. The further in the future profits are expected, the lower their current value.
((WSJ September 20, 2024))

Niedrigere Zinssätze wirken sich in der Regel positiv auf die wirtschaftliche Aktivität aus, was wiederum die Nachfrage nach Rohöl stärkt.((https://archive.ph/4vEz6#selection-5669.0-5669.138))

Wenn die <wrap hi>Leitzinsen gesenkt</wrap> werden, wird das <wrap hi>Geld</wrap> im Allgemeinen <wrap hi>billiger</wrap>, was <wrap hi>Investitionen und Konsumausgaben fördert</wrap>. Dies kann zu einer <wrap hi>steigenden Nachfrage nach Rohstoffen</wrap>, einschließlich Öl (oft als "schwarzes Gold" bezeichnet), führen, da eine <wrap hi>wachsende Wirtschaft</wrap> typischerweise <wrap hi>mehr Energie</wrap> benötigt. In der Folge könnte ein erhöhter Energiebedarf die Ölpreise nach oben treiben, da die Marktteilnehmer mit einer höheren Nachfrage rechnen.

Steigen die Ölpreise zu stark, könnten sich die Notenbanken erst recht zu Zinsanhebungen veranlasst sehen.

   * U.S. interest rates tend to drive global borrowing costs


Wildcatters pioneered hydraulic shale frac- turing, aka fracking, and horizontal drilling some two decades ago. Many failed or sold out to larger producers when oil prices plunged in the middle of the last decade and again during the pandemic. Now rising interest rates are making it more expensive to drill, which is en- couraging more consolidation.


Higher interest rates are prompting consolidation across the U.S. economy, as smaller, less-capi- talized companies struggle to borrow. Oil and gas giants are flush with cash owing to the run- up in prices over the past two years.

The two-year's yield, which reflects interest rate expectations, fell 2.8 basis points to 4.913%, while the 10-year slipped 8.7 basis points at 4.575%.

Still, while rising energy prices complicate the Federal Reserve’s mission to lower interest rates, Blanch points out that central banks are presently more concentrated on curbing core inflation, which excludes the volatile sectors of food and fuel.((https://archive.ph/PZ9V1#selection-2373.0-2376.0))