01, Production Cut

OPEC+ announced in the early hours of today that it plans to reduce oil production to 40.46 million barrels per day in 2024. Meanwhile, Saudi Arabia is also planning additional cuts, with the duration of the reduction yet to be determined.

Saudi Arabia's reduction has greatly facilitated OPEC+'s plan, and Russia has also cooperated with this decision, expressing willingness to adjust production to balance the crude oil market.

In October 2022, OPEC+ made predictions about the oil market and implemented intervention measures. At that time, the price of oil was trending sharply downward, and OPEC+'s intervention measures greatly stabilized the oil market.

However, during this period, crude oil was still affected by other factors, including supply and demand, which led to continued fluctuations in the price of crude oil.

It is believed that this production cut by OPEC will lead to a reduction in the supply of oil in the market, which will greatly support the rise in oil prices.

However, the rise in oil prices is very unfavorable for inflation in the United States, so the Federal Reserve may be forced to continue raising interest rates.

It seems that the oil war between the Middle East and the United States is still escalating.

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02, Forced Interest Rate Hike

Recently, the U.S. labor market has shown strong performance, with non-farm employment increasing by 339,000 jobs, sparking discussions among market participants about raising the federal funds rate.This data highlights a robust job market performance and increases the likelihood of inflation due to demand issues.

However, some economists have pointed out that the Federal Reserve needs to delve deeper into the labor market to determine whether it is loosening.

She anticipates that the Federal Reserve is likely to be forced to continue raising interest rates in July due to severe inflation problems.

But due to the impact of the US banking crisis, the Federal Reserve has actually been considering halting the pace of interest rate hikes, yet the development of the job market has influenced the Federal Reserve's decision to raise interest rates.

Continuing to raise interest rates is also a reluctant decision for the Federal Reserve.

The continuous interest rate hikes by the Federal Reserve are by no means a good thing for the US economy, and it is very likely to drag the US economy into a severe recession.

03, Visiting China

Due to the unfavorable economic outlook in the United States, this has also led to an increasing number of foreign enterprises visiting China intensively.

Mainly because the Chinese market occupies an important position in terms of economic trade for American companies.

Recently, executives from several US companies have expressed their intention to continue investing in China, including Tesla, Starbucks, JPMorgan Chase, and others.Not only executives from well-known American companies, but also those from some renowned German and French brands are making intensive visits to China, seeking to invest in the Chinese market.

Currently, the economic development in Europe and America is quite unsatisfactory, and they still have to face the unresolved issue of high inflation and low growth for more than a year.

The problem will continue to exist in the future and has not been completely resolved.

The GDP of the United States only grew by 1.3% in the first quarter of this year, while Germany showed a downward trend. This indicates that the economy of Europe and America is still in a state of depression.

However, the pace of interest rate hikes by the Federal Reserve and the European Central Bank has not stopped, exacerbating the economic downturn.

This makes companies more eager to find another large market with certainty to support their development. In this regard, the Chinese market is the best choice.

Looking at the data for the first quarter of this year, China's economic development is recovering strongly.

Although the data for the second quarter is still to be observed, research institutions generally agree that China is one of the few major economies in the world with certain growth this year.