Market Analysis

WTI is starting the week on the front foot

OIL

WTI is starting the week on the front foot, climbing above the $70 level for the first time in over a week. These gains in the price of oil happen as concerns grow over US production, following the damage caused by Hurricane Ida to infrastructure in the Gulf of Mexico, which has seen output drop by about 1.4 million barrels a day since late August. Meanwhile, the consensus, despite the uncertainty caused by the growing number of coronavirus cases, is that oil demand will continue to increase in the runup to the end of the year, in a dynamic that could support further increases in price.

Ricardo Evangelista – Senior analyst, ActivTrades

 

FOREX

The US dollar is finding support during early Monday trading. The greenback’s gains against the other major currencies occur in the runup to the release of a batch of important American economic data later in the week, including inflation and retail sales. Positive readings would once again highlight the risk of inflation and be likely to strengthen the case for the Fed to bring forward the tightening of policies. This morning’s dollar gains show that investors are on the whole expecting such an outcome, despite growing concerns over the increase of COVID cases, which could force fresh containment measures to be imposed that could have a detrimental impact on growth.

Ricardo Evangelista – Senior analyst, ActivTrades

Source: ActivTrader

 

EUROPEAN SHARES 

Stocks opened slightly higher in Europe despite a cautious trading stance from investors. Today’s dented market sentiment is a result of China targeting Alipay in its new regulatory crackdown, which led tech stocks lower in the region. More generally, the trading mood isn’t really “risk-on” as investors are cautiously monitoring the reopening of economies as the Delta variant continues to spread, while awaiting key macro data this week. The prospect of poor macro data this week as well as expectations of reduced monetary support from central banks is increasing the risk of a near-term correction on stock markets, particularly with most indices near record levels. Most market operators will have their eyes on a batch of CPI releases from the US, UK, Canada and the eurozone in an effort to assess the “transitory” effect of inflation as well as a possible timeline for reduced stimulus.

Pierre Veyret– Technical analyst, ActivTrades

 

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