Oil prices fell by about 1%, helped by news of peace talks between Israel and Hamas, which eased fears of a broader conflict in the Middle East.
A Hamas delegation will visit Cairo on Monday for peace talks, a Hamas official told. Meanwhile, Israel's foreign minister said on Saturday that the planned invasion of Rafah could be postponed in the event of an agreement involving the release of Israeli hostages. A White House spokesman said Israel had agreed to heed U.S. concerns about the humanitarian consequences of a potential invasion.
Investors are also adjusting their positions ahead of the Fed meeting, the results of which will be announced on Wednesday at 18:00 GMT. After keeping rates at the same level at its March meeting, the FOMC indicated the likelihood of a rate cut this year, which will begin in the coming months. This "dovish" attitude was also evident in the summary of economic forecasts. Both the comments and the rate forecasts were described as “data-dependent,” and since March, the data has not particularly supported these expectations. The downward trend in inflation seen over the past few months was broken, with Friday's data showing the PCE deflator rose 2.7% over the past year. The resilience of economic activity, especially in the services sector, does not give policymakers any indication that it is time to begin easing policy. The FOMC is likely to leave interest rates unchanged at Wednesday's meeting. Without a planned update of economic forecasts, the market will analyze the accompanying statement and closely follow every word of Fed Chairman Powell at the press conference after the meeting. Overall, rate expectations continue to decline.
Some pressure on oil prices was exerted by Chinese data, which showed a slowdown in industrial profit growth - the latest sign of weak domestic demand. The total profit of industrial companies increased by 4.3% per annum in the 1st quarter, compared with an increase of 10.2% per annum in the first two months of 2024. Meanwhile, experts warn that the price of oil may rise if data on oil reserves in the United States and China's PMI indices show an improvement this week.