Market Analysis

Oil and the Suez block

FOREX

The US dollar is almost flat to other major currencies during early Monday trading. The dollar’s gains of the last few weeks, which largely resulted from fears that the post-pandemic economic rebound will take inflation to unhealthily high levels, can be seen as a rebound within a wider trend of a weaker greenback in the longer term. However, this short trend correction is likely to linger for a while yet as the markets appear determined to seek insurance against the possibility of the economy overheating in the aftermath of the pandemic.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

OIL

The blockage of the Suez seems to be solved in the short term, which is positive news for the majority of financial assets, but not for oil. As a result, the barrel has started the new week in red as investors are less worried about supply. Focus now switches to the OPEC meeting, which should tell investors more about the production cuts in the next few months. From a technical point of view the scenario remains uncertain. After the long bullish rally of the last 10 months, the price is consolidating and new market drivers will be needed for any further rallies.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

EUROPEAN SHARES 
European share markets had a mixed opening as modest gains in Frankfurt and Paris were offset by drifting prices in Copenhagen and Stockholm. This hesitant market sentiment follows an uncertain Asian trading session due to revelations of Archegos Capital’s massive bets against US and Chinese giant tech firms. While this news came as a surprise to many and brought a sudden increase in market volatility, the impact should be short-lived as many investors still have the economic recovery, further stimulus expectations and vaccine roll-out at the centre of their focus. This week investors are likely to keep their eye on oil markets and energy shares with Wednesday’s release of the latest US crude oil inventory data and the OPEC+ meeting on Thursday, while President Biden is also expected to announce further stimulus measures before Good Friday.

Pierre Veyret– Technical analyst, ActivTrades

 

All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.