OIL
Oil prices continued to fall during early Wednesday trading, carrying the negative momentum of the previous session. The price of Brent crude has so far this week dropped by more than 5%, with market sentiment remaining tilted to the downside. Investors are nervous about future demand, a feeling exacerbated by disappointing Chinese manufacturing data released overnight. With the economic outlook remaining uncertain for the world’s largest crude oil importer, demand expectations are falling, causing prices to drop. Meanwhile, those hoping that the lower demand would be offset by output cuts from OPEC+ countries were left feeling disappointed. Recent comments from Russian officials hinted at the country’s intention to maintain the current production levels, reducing the likelihood of an OPEC+ output reduction and further hindering the price of the barrel.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrades
EUROPEAN SHARES
European markets and US futures contracts opened lower on Wednesday, reflecting a bearish trend that emerged overnight in Asia. Uncertainty prevails as mixed macro developments weigh on market sentiment. European stock benchmarks are experiencing declines across most sectors, with consumer cyclical shares being the hardest hit so far. The negative sentiment came after investors saw poor PMI data from China, which indicates slower manufacturing and demand in the world's second-largest economy, and also impacted energy and mining shares. However, the wind may turn during today’s trading session as investors await a batch of CPI data from EU countries, expected to show improvements in the region, especially after France already reported cooling price pressure.
Softer inflation prints could see bets of a continuing hawkish stance from the ECB fade back, and lift risk appetite from traders.
Meanwhile, investor focus is also likely to turn towards the US as most are monitoring the debt-limit issue following the deal reached between President Biden and House Speaker McCarthy, while the US job openings and the Fed beige book release, due later this afternoon, should bring more volatility to equity and FX markets.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
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