New battle lines drawn in oil

4 April, 2016

We jump into the new quarter with both feet today, Friday’s US Employment Report induced volatility now behind us. It’s notable that the initial gains after the data have been partially unwound (dollar index), with the dollar weakness most prevalent against the yen, with USDJPY below the 111.50 in early European. The main mover overnight has been oil prices, the front Brent contract below the USD 38.50 level as more manoeuvring takes place ahead of the key meeting of oil producers later this month. Saudi Arabia has today stated that it will freeze output only if Iran does the same. It has previously indicated that it would let Iran reach its pre-sanctions level of output before demanding a freeze. This makes the backdrop ever more precarious ahead of the meeting in Doha later this month.

Other overnight activity has been fairly muted, with China and Hong Kong markets closed for a public holiday today. The Aussie has moved off the recent highs, down to 0.7620 into the European open ahead of the RBA policy meeting tomorrow. The market is still pricing a decent chance of a cut in rates later in the year, although the latest statement from the RBA suggested that it was in no hurry. For today, there are no major data releases for markets to get their teeth into. Overall, it’s going to be a struggle for the dollar to regain its stronger footing unless the data start moving to the positive side of expectations. Emerging market currencies, especially those that have been under pressure recently, could well continue to recover in this environment.


Source link  
USD Bears Return

USD bears returned to the market as the tensions between North Korea and the US have greatly cooled this week. North Korean media reported that North Korea Leader Kim had delayed...

USD Bears

On Wednesday, St. Louis Federal Reserve President Bullard (a non-voting member of the FOMC) stated in an interview that he, is opposed to further U.S. interest rate increases by the Federal...

Oil & GBP slide lower

Oil continues to be under “over supply” pressure resulting in prices dipping to 7 month lows. Yesterday Oil suffered a 2% drop as the increased supply...


Brexit Negotiations to be Triggered

Although Theresa May has stated before no deal is better than a bad deal, Chancellor said on Sunday that...

Markets mixed following averted shutdown

Global equities rose with U.S. futures, fixed income retreated...

Gold Bears Test Near Term Major Support

Gold spot price has turned bearish since 27th Feb, after hitting a one-and-a-half month high of 1263.73...


GBPUSD Retreats Post Surge on Theresa May’s Hard Brexit Speech

Trump stated on Tuesday that a strong dollar is risky to the US economy, as it weakens competitiveness of US exports and corporate profits...

The dominant dollar

The dollar appreciated a further 1% through the course of Thursday in the wake of the Fed meeting result seen Wednesday evening. We saw some pull-back into the NY close and again through the Asia session...

Crossing the Bridge

The usual bridge day between Thanksgiving and the weekend arrives which will keep volumes light and ranges on the tighter side, all being well. That’s unless you are a retailer, in which case this is known as ‘Black Friday’, a phenomenon that has crossed the Atlantic in recent years...

  


Share: