OIL
Brent oil prices surged and hit a multi-month peak during early Tuesday trading. The price of the barrel reached its highest level since October 2023, fuelled by the market's optimism about an improved global economic outlook, which signals heightened demand. Simultaneously, escalating geopolitical tensions in the Middle East have spurred concerns over supply. The recent Israeli strike on the Iranian embassy in Damascus marks another ominous development, further exacerbating a conflict centred in Gaza but casting a shadow over the entire region. Should this conflict intensify, it could significantly disrupt global crude supply chains. Market reactions have been swift, with uncertainty stemming from increased tension being factored into pricing.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European shares started the trading week on a positive note, with most benchmarks edging higher as risk appetite remains strong despite expectations of monetary easing cooling down.
The STOXX-50 index registered a new all-time high as the market trades above the 5,110.0pts level, mostly led higher by energy and tech stocks this morning.
However, today’s rise doesn’t seem to fit the bigger picture.
Indeed, most indices are already trading above or close to historical highs, and investors need strong reasons to continue buying and defend the high valuations in the market.
In addition, recent data from the US and EU have shown that these economies are expanding, while central banks are still awaiting confirmation that inflation rates are trending down. This is cooling expectations of monetary easing and should negatively impact risk appetite from investors.
Finally, the sell-off in US and EU bond markets tells us cash is going out of the market, at least temporarily. This situation tends to make us think this morning’s stocks rise could be short-lived, caused mainly by a euphoric spike.
Meanwhile, investors will pay attention to today’s German CPI print alongside the UK Manufacturing PMI data, while US job figures will loom in the afternoon.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.