Market Analysis

WTI crude oil prices hedged up, approaching the multi-year maximums

OIL

WTI crude oil prices hedged up during early Wednesday trading, once again approaching the multi-year maximums reached last week. The barrel price action is being determined by growing apprehension that ongoing supply issues may worsen due to the escalating tension between Russia and the West over Ukraine and the threat of military attacks on infrastructure in the Middle East. With demand remaining high and global reserves still low, investors continue to react to supply side issues. Problems in the Arabian Peninsula, where Iran backed Yemeni rebels threaten to disrupt the regions oil output, can be added to the ongoing dispute between Russia and the West over Ukraine and may end up further disrupting the supply of energy to Europe.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

Source: ActivTrader

 

FOREX

The euro has been on the back foot during early Wednesday trading, as investors look ahead to the conclusion of the Federal Reserve’s first 2022 meeting and react to the growing tension between Russia and the West. The single currency is hovering close to the year minimums reached on Tuesday in relation to the US dollar, as the markets increase the odds of the US central bank intensifying its tilt towards hawkishness. This prediction may become a reality later today, should the Fed provide further hints regarding the acceleration of its monetary policy tightening. Such a development could create scope for further greenback gains on the euro, with the weakness of the single currency likely to be amplified by the tensions with Russia, a scenario that favours havens such as the dollar and the yen.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader

 

EUROPEAN SHARES 
Today is the D-Day for equity markets

European assets traded all in the green on Wednesday, alongside US Futures and following a mixed sentiment registered in Asia, as investors brace for the incoming Federal Reserve announcement. Volatility is likely to remain high on riskier assets today, especially towards growth stocks, as most market operators wait for a major decision on rates and balance sheet reduction from the FOMC meeting later today. A first hike in interest rates is now widely expected among stock traders, and there is a high chance markets will welcome the news, reassured by the fact the Fed is finally taking action to tackle inflation. On the other hand, a dovish or moderately hawkish speech, with no rate hike, would come as a surprise among investors and could seriously dent market sentiment and put further pressure on risky assets. In any case, stock investors will also keep an eye on the debt markets as Treasuries as these are likely to set the tone following the FOMC announcement.

Technically speaking, EU indexes are paring some of the recent losses, with the DAX-40 index trading above the 15,400 pts level (38.2% Fibonacci resistance). The next targets can be found around 15,560 pts and 15,730 pts by extension.

Pierre Veyret– Technical analyst, ActivTrades

Source: ActivTrader

 

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