Market Analysis

The dollar rebounds after dropping almost 2% last week

FOREX

The US dollar index, which measures the performance of the greenback in relation to a basket of six other major currencies, is back on the front foot during early Tuesday trading. The dollar rebounded, after dropping almost two percent in the previous week, as investor expectation recalibrated following the publication of a surprisingly strong jobs report on Friday. The vitality of the US labour market increased the odds of the Federal Reserve hiking rates by 50 basis points in March. There may be scope for even more dollar gains, should inflation figures, which are to be released later in the week, at least match the general consensus of 5.9%.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader

 

OIL

WTI crude oil prices are easing during early Tuesday trading, down from the seven-year highs recorded last Friday. The revival of indirect talks between the US and Iran could lead – in a best case scenario – to the reopening of international markets to Iranian oil. Oil price sentiment has been dominated by the imbalance between supply and demand, and in such a tight market, the mere possibility – albeit not a very clear-cut one – of increased supply was sufficient to take some of the pressure off the price of the barrel.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader

 

EUROPEAN SHARES 
EU stocks traded significantly higher on Tuesday, with benchmarks in green territory from Lisbon to Stockholm, while US Futures fluctuated. Beijing’s decision to relax the timeframe of carbon emissions targets for China’s steelmaking sector, has boosted industrial metals such as aluminium and iron ore overnight, and has driven market sentiment higher. That said, price action seen in other sectors and even other benchmarks tells us uncertainty remains in the short term. Volatility reigns everywhere, most stock indices still lack clear directionality while treasuries continue their gradual drops as investors wait for the next move from central banks on monetary policy. Other asset classes such as precious metals and crypto markets benefit from this uncertain situation, as investors look to hedge.

Traders will have a particular focus over the key US CPI report due on Thursday, for clues to any incoming policy moves from the Federal Reserve. Meanwhile, all eyes will be on the energy sector as investors cautiously monitor the diplomatic talks over the Russia and  Ukraine, as well as the prospect of a new nuclear deal with Iran, which could allow the country to resume its oil exports, easing the pressure on oil markets.

Pierre Veyret– Technical analyst, ActivTrades

Source: ActivTrader

 

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