The holiday uncertainty urges investors to retreat

December 30, 2016

Crude Oil benchmark trades mixed with the spread of WTI and Brent rising to $3, due to the different expectations in market from both the US and the rest of the oil producing world. Brent advanced by 0.23% fuelled by the upbeat expectations of the OPEC cuts in January, while US Oil (WTI) trades in a red zone on the fears of the weekly EIA report, which might post gains in US inventories. The report from the API has already stoked concerns, projecting that the oil stockpiles rose by 4.2M barrels in the week ending on December 23rd.

EIA is projected to show reduced oil supplies by 2M barrels, at the same time gasoline reserves have risen by 1.3M barrels and distillates have increased by 1.8M barrels.

EU equities
The European stock indices have shown downfall, after the decline on Wall Street the day before. As Dow squashed the hopes of the mark rising over 20,000 points. The index showed the second-worst decline since November 8th, when the presidential elections took place in the United States.

EURO STOXX 50 eased by 0.11%, as France’s CAC 40 lost 0.11%, while Germany’s DAX 30 fell 0.33%.  Investors are also taking profits after the European Stoxx 600 closed on Wednesday at the annual maximum.

The British Pound
Earlier, the British data showed that house prices rose in December by 0.8%, which was higher than the projected increase of 0.2%. The annual growth was 4.5% compared to the 4.4% a month earlier, which also beat the expectations of the original 3.8%. The Pound rose slightly on the positive data, as the signals about the expending economy is generally supported.

The Eurozone M3 money supply grew by 4.8% in November, as it was expected to increase by 4.4%. The volume of lending to the private sector rose by 1.9%. The European currency trimmed a part of its yesterday’s declines rising to 0.45% against the US Dollar.

The US Dollar
The index which tracks performance of the US currency against a basket of six other majors fell by 0.40% to a 102.83 level, as the holiday uncertainty urges investors to retreat from risk.

Safe heavens
Gold continues to advance together with other safe heavens including the Japanese Yen and Swiss Franc, while yields on major government bonds have shrunk signalling that the sentiments on the market have turned risk-averse. Gold futures for the January delivery rose by 0.6% to $1.147 per troy ounce, as the Japanese Yen gained 0.58% with Swiss Franc adding 0.40% against the Dollar. German 10YR bond profits finally fell by 8.16% after a long-sustained rally, the US 10YR bond yields trade at 0.87% lower on a 2,484 level.

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