OIL
Brent oil prices eased in early trading, prompted by the latest US stock inventory report revealing an unexpected surge in reserves. This development has heightened concerns regarding a potential slowdown in demand. Over the last few weeks, the price per barrel has remained relatively stable within a narrow range. On the one hand, apprehensions persist regarding the impact of prolonged restrictive monetary policies on economic activity, potentially leading to reduced demand. On the other hand, supply pressures continue to loom large, exacerbated by ongoing tensions in the Middle East that pose threats to the global oil supply chain. Given this backdrop, market participants will closely monitor the upcoming release of US personal consumption expenditure figures, which serve as a key inflation metric for the Federal Reserve. The interpretation of these figures could solidify expectations regarding the timing of the first Fed rate cut, with many now speculating it could occur as late as June. Such speculation may further contribute to downward pressure on oil prices.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Stocks continued to climb higher in Europe on Thursday, with investors cheering on positive corporate results ahead of key US data this afternoon.
Market optimism for EU shares continues to rise despite patchy earnings reports from companies in the old continent.
There is a lot on investors' plates as poor results from Worldline, Teleperformance, and Air France offset strong reports from Airbus and Moncler.
However, this patchy corporate picture has yet to affect risk appetite significantly, as investors are focused on macro developments, with today's US PCE index on sight.
This crucial data, which receives great attention from the Fed and always plays a big part in its monetary decisions, is also expected to deliver a mixed message this month.
Indeed, while the Core PCE index is widely expected to show a slight decrease (from 2.6% to 2.4%) compared to last year, the MoM estimated data suggests prices have accelerated from 2.8% to 2.9%.
Of course, reassuring data in the shape of lower figures than initially estimated should significantly boost risk appetite further. But a more mixed picture could induce investors to take some profits out, leading the market into a correction phase in the very short term.
The STOXX-50 index still trades above the 4,880.0pts level, with most sectors in the green so far, but more volatility is expected in the afternoon.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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