OIL
Brent oil prices hedged up during early Wednesday trading, reflecting the overall positive sentiment that currently dominates the markets. The mood of investors has improved over the last few weeks, with inflation stabilizing and better than expected economic activity pushing back recessionary fears in the US and in Europe. At the same time, expectations that the Federal Reserve will stop hiking interest rates before the summer have weakened the US dollar, offering further support to the price of the barrel. However, some volatility in oil prices can still be expected. As demand-side prospects improve, doubts remain over supply. While OPEC countries are expected to maintain current levels of production, there have been reports that Moscow is selling its crude to Asian clients at heavily discounted prices, in a dynamic that may limit the upside for global crude prices.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Equity markets opened higher in Europe on Wednesday, starting February on a bullish note following solid performances in the first month of the year.
All benchmarks trade in the green as the negative performance brought by healthcare shares are being offset by all other sectors, with real estate stocks at the top of the board.
The bullish optimism continues to support market sentiment this week despite uneven corporate results, while investors wait for key rates decisions from central bankers, starting today with the FOMC meeting. A less hawkish stance, in the shape of a reduced 25 bp rate hike, is now widely expected by everyone. However, if no surprise comes with this data release, investors are likely to pay close attention to Jerome Powell’s wording during the press conference following the decision on rates, to get more clues to the Fed’s next move. We expect higher market volatility in share markets as the Fed chairman is likely to reaffirm the commitment to fighting inflation and announce rates will stay high for as long as necessary. Meanwhile, earnings reports will continue to bring rhythm to stock markets, especially in the tech sector as investors wait for Facebook’s Q4 results later this afternoon.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
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