Crude recovery

25 January, 2016

Today marks the first Monday in 2016 where we’ve seen gains for Asian indices and this is due to rub off on European markets that are looking to add to the bounce from the end of last week. The risk appetite has been seen markedly in commodity markets where crude prices are enjoying their biggest two day rally in seven years with Brent and Nymex firmly back above the $30 a barrel mark. This is causing a considerable squeeze on the short sellers and there could be further strength to come as we are pressing the 20% mark of gains from last week’s lows, which as we know only too well from the calls of now being in an equity bear market following declines of 20% from their highs, that it is a signal that we are now back in a bull market for crude. Many are rushing to adjust upwards their forecasts for the price of oil especially since the commodity bear market has been ongoing for a year and a half now, in some cases longer if you consider some of the softs. Despite this strong bounce we are still down around 15% on the year for crude prices so it’s too early to say the worst is over for the commodity complex.

The bounce in oil has allowed some of the dollar majors to recover in particular GBPUSD which has visited levels above 1.4300 briefly overnight and if we see a continued rebound in commodities, further dollar weakness could allow cable to have another run at the 1.4500 level. The economic calendar is quiet today with just the German Ifo survey due for release and expected to soften, but the week becomes much busier with the FOMC on Wednesday and BOJ on Friday.


Source link  
CB Monetary Policy Unchanged

Thursday saw the latest Monetary Policy Committee (MPC) report from the Bank of England. The BoE stated that further modest increases...

No Surprises as Fed Raises Rates

The Federal Reserve, as expected, raised its benchmark interest rate by a quarter of a percentage point, to a range of 1.25% to 1.5%. The latest hike...

CB meetings dominate the week

With no impactful economic data releases on the calendar today, the markets are focusing on a plethora of Central Bank meetings scheduled...


No Surprises from BoC & ADP

In an unsurprising move, the Bank of Canada decided to hold its benchmark lending rate at 1%, after two small hikes earlier in 2017. The BoC stated...

Moderate Gains for USD

On Monday, the US Commerce Department released Factory Orders data for October, indicating that the continued strength in the Manufacturing...

OPEC Extends Output Cuts

On Thursday, OPEC (Organization of Petroleum Exporters) and non-OPEC producers led by Russia agreed to keep output cuts until the end of 2018...


US Economy Expands Faster Than Predicted

Data released on Wednesday showed that the US economy expanded at its quickest pace since 2014 in Q3. The US Commerce Department said that...

Political Turmoil in Germany Hurts EUR

The EUR lost ground against many of its peers on Monday on news that Chancellor Angel Merkel’s efforts to form a coalition government had collapsed...

USD Suffers on Subpoena News

The Trump Administration is back in the spotlight with news of a report that Special counsel Robert Mueller’s investigators have issued a subpoena...

  


Share: