Oil prices hit 7-year high
Oil prices were higher on Tuesday, as markets reacted to growing tensions in the Middle East.
Prices have risen as the expectations for demand increases in 2022 continues to rise, as the world looks to move past the pandemic.
Reports suggest that OPEC and its allies which include Russia expect demand to reach pre-pandemic levels in upcoming months.
The cartel believes that demand could end up hitting 100 Million barrels per day in Q3.
If this were to happen, it would not only reach, but surpass pre-pandemic levels this year.
Yen volatile as BOJ raises inflation forecasts
The Japanese yen was volatile on Tuesday, as it was announced that the Bank of Japan had raised its inflation rates forecast.
Similar to the Bank of England of Monday, the BOJ now sees consumer prices climbing to as high as 1.1%.
This was the first time since 2014 that the bank made an adjustment to its inflation expectations, which it previously had at 0.9% in 2022.
|💡The Yen’s Importance in Asia’s Economy|
The Japanese yen is the third-most used currency only behind the U.S. Dollar and the Euro. It’s also the fourth-most popular reserve currency behind the US dollar, euro, and sterling. Although the Chinese Yuan is rapidly growing in popularity, the lack of flexibility means that the Yen is still the preferred Asian reserve currency. This is very important because when there is political or economic uncertainty in Asia, investors usually express their views through the Japanese yen.
In a statement following the monthly BOJ meeting where they opted to keep rates unchanged, Governor Kuroda stated that, “We are not debating an interest rate hike”.
He added that, “The median forecast of board members is for inflation to move around 1%. Under such conditions, we are absolutely not thinking about raising rates or modifying our easy monetary policy.”
FTSE 100 closes lower, despite UK creating record jobs
London’s FTSE 100 finished lower on Tuesday, despite data showing that the Labour force was growing.
Figures released by the office for national statistics reported that UK employers hired a record 184,000 workers in December.
This came despite the uncertainty caused by the Omicron variant, where the government advised employers to implement work from home measures.
December’s record payrolls in the UK helped push the unemployment rate to 4.1%, which is its lowest since June 2020.
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