Market Analysis

Oil is back in the green.

OIL

Oil is back in the green. As stocks recover from the selloff of the final part of last week, oil benchmarks are also trading positively. Friday’s decline seemed a psychological correction resulting in a temporary “risk off” scenario, as investors became nervous about an unstable bond market. Therefore, the main trend for the barrel remains positive, with both WTI and Brent gaining around $1. Investors are still betting on a quick economic recovery thanks to the vaccinations. That’s the reason why the travel and leisure sector is continuing to rebound and could also lead to oil demand growing over the next few months.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

FOREX

The US dollar is gaining ground on other major currencies during early Monday trading. The correlation between the performance of the greenback and the bond market is clear, as was illustrated by the treasuries sell-off last week which pushed yields up and forced an increase in dollar demand. This dynamic, with investors, fearful of an explosive economic recovery that will fire-up inflation in the aftermath of the pandemic, selling low yielding treasuries, has been dictating the performance of the US currency over the last few trading sessions. As things stand, the conditions appear conducive to the lingering of these inflation-fearing trades and therefore to continuing dollar strength.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

EUROPEAN SHARES 
Asian and European stocks traded higher on Monday, alongside US Futures, amid calmer trading conditions following last week’s panic. It is the “calm after the storm” on most markets today after investors have been reassured over the weekend by a global response from central bankers announcing that their dovish monetary policies will remain in place for an unspecified amount of time. In addition, investors also welcomed the approval of the $1.9 trillion stimulus package in the US while positive vaccine news is also supporting today’s market sentiment. However, most traders now face a busy macro agenda this week with speeches from central banks (RBA and the FED), the OPEC+ meeting and the highly anticipated US nonfarm payrolls on Friday likely to increase market volatility on riskier assets.

 

The Stoxx-50 Index invalidated last week’s bearish break-out of its flag pattern by opening above the strong 3,655-3,665pts zone this morning. The market is now trading closing in on 3,700pts with 3,705pts, 3,720pts and 3,732pts the next targets in sight.

Pierre Veyret– Technical analyst, ActivTrades

 

The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.

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.