• Brent oil prices take a breather after 3-day rally
• Robusta coffee prices hit all-time high due to bad weather in Vietnam
• US30 index reaches new record high ahead of US PCE inflation data
• Rate cut likely in September, with 71.5% chance of 25 bps cut
   

1 – BRENT

Brent is taking a breather after the last three days of rally driven by heated tensions in the Middle East.

Traders remain cautious on the threat of Libya, an OPEC member producing 1.15 million barrels per day (2-3% of total OPEC+ output), having to halt its production.

However, the remaining output cut of 2 million bpd may offset this Libya-related shortfall. In addition, OPEC+ may increase its production levels starting in October 2024.

China's uncertain macroeconomic outlook adds to the uncertainty about the future of global oil demand.

The country has experienced a slowdown in demand growth amid a structural shift to electric and hybrid transportation, as well as weakened demand for petrochemical products.
 

2 – ROBUSTA

Robusta bulls are trying to maintain momentum after pushing the price to an all-time high of $5065.71 amid the worsened weather conditions.

Robusta coffee have skyrocketed to unprecedented levels due to adverse weather conditions in Vietnam. The country's coffee production is expected to fall by 20% this year.

However, the International Coffee Organization reports a 5.8% increase in production last year, resulting in a surplus.

The USDA is forecasting a 4.2% increase in production for the 2024/25 season, which could put downward pressure on coffee prices.
 

3 – US30 INDEX

The US30 index reached a new record high during yesterday's trading session (26/08/2014) as investors awaited the US PCE inflation data.

The upcoming reading will be closely watched by market participants, as it could potentially influence the Fed's highly anticipated interest rate decision in September.

At the time of writing, the probability of a rate cut stands at:

• 71.5% - 25 bps
• 28.5% - 50 bps

Lower interest rates can into indicies moving higher.

More By This Author:

This Week: Nvidia Earnings And US&EU Inflation Data
Robusta Hits An All-Time High Of $4877.41
US500 Nears All-Time High Ahead Of Jackson Hall And Nvidia Report