Life     Digests

In the Know – June 21, 2022

POSTED ON JUNE 21, 2022    

In May, China’s crude oil imports from Russia soared 55% to a record level from a year earlier, displacing Saudi Arabia as the top supplier. Refiners cashed in on discounted supplies amid sanctions on Moscow over its invasion of Ukraine.

 

With the current lack of widespread lockdowns in China, manufacturing is back to its normal levels. This means that factories need power for their operations, so cheaper oil benefits them.

 

It also lessens China’s competition for oil with countries that are boycotting Russian crude, which may have an effect on worldwide prices.

 

In the US, not much trading happened because of the Juneteenth holiday but the prices of US Treasury futures fell, which implied a 0.05% rise in yields. European bond yields also increased, as the European Central Bank and Bank of England tightened their monetary policy even faster.

 

If you have money in bonds from the US or Europe, or in a bond fund that does, you may feel some impact on your investment.

 

A tight monetary policy is the term for when a central bank takes steps to manage the speed of growth in an economy, or to control inflation. Increasing interest rates is one of the usual ways to do this.

 

Raising rates makes both bond yields and the cost of borrowing money go up, ultimately causing prices to drop and managing inflation.

 

President-elect Ferdinand R. Marcos, Jr. said he will take on the role of agriculture secretary “at least for now.” He will focus on boosting food production amid rising food inflation and anticipated shortages in the next quarters of the year.

 

The Bangko Sentral ng Pilipinas (BSP) said that it will most likely raise interest rates by 0.25% on Thursday, despite market expectations of a more aggressive tightening. It said there is no urgency to match the pace of the US Federal Reserve (the Fed) because the situation in the Philippines is different.

 

There haven’t been any big developments so far, and so it might be a good idea for you to continue following your strategy until something changes.

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