OIL
Brent oil prices edged down in early Tuesday trading after Hurricane Beryl passed through the Gulf of Mexico causing less damage than predicted. Since the region’s energy infrastructure remained largely unaffected by the storm, fears of an impact on oil supply dissipated, leading to a slight softening in prices. Meanwhile, in the Middle East, growing prospects of negotiations between Hamas and Israel are alleviating fears of a broader conflict in the region that could potentially affect oil production and shipping. With supply-side worries easing and driving lower oil prices, all eyes will be on the release of US inflation data. A low reading, confirming several recent data releases indicating a slowdown in the US economy, would increase the chances of an interest rate cut as early as September, raising oil demand expectations and offering support to the price of a barrel.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Stocks drifted lower in Europe on Tuesday, as investors await more clues regarding the outlook for monetary policies in Europe and the US this week, likely to be provided by this week’s batch of CPI data. Market sentiment remains uncertain on stocks following the latest political developments in France and the UK.
Even if a “Frexit” scenario has been cleared off the table after the second round of voting in France last Sunday, the political landscape provided by a hung parliament keeps uncertainty alive in the region. Meanwhile, traders and analysts are bracing for this week’s inflation reports from the US and many EU countries, hoping they will make the monetary outlook less blurry.
The STOXX-50 index failed to clear the psychological 5,000pts level twice yesterday. It is trading lower, back to its first very short-term support around 4,955pts, driven downward by energy and industrial shares. We are certainly headed for another volatile week, which will likely provide good opportunities for short-term equity traders but also turbulence for long-term investors.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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