OIL
Oil prices edged higher in early Friday trading, driven primarily by escalating concerns over supply. Libyan crude production continues to underperform, operating at just half capacity due to political rivalry among local factions. This situation is affecting production and disrupting shipping, as tensions have led to the halting of exports from local ports. This crisis could persist for an indefinite period, potentially resulting in a loss of up to one million barrels per day. Meanwhile, news of an Iraqi output reduction further intensified traders' supply worries. The country has exceeded its OPEC+ quota and reportedly plans to cut its daily production in September. Against this backdrop, there may be room for further increases in oil prices.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European shares kept climbing on Friday despite uneven sectoral performances, as market sentiment improved following the latest inflation data in the region. Risk appetite climbed after investors welcomed reassuring CPI data from the two biggest economies of the old continent, Germany and France, supporting the case for further rate cuts from the ECB during its next monetary meeting.
This is seen as a major bullish catalyst for investors, especially following a summer season marked by uncertainty on a local and global scale. The top performers can be found in the luxury sector, with LVMH, Hermes and Ferrari leading benchmarks higher, offsetting negative performances from tech shares as the extended drop in Nvidia’s share price continues to pressure the sector.
Meanwhile, in the US, investors cautiously await today’s PCE data, the Fed’s favourite gauge, while the start of the next rate cuts cycle is widely priced in for the next FOMC meeting. The environment remains bullish for stocks in both the US and Europe as investors continue to welcome progress on both the economic and the monetary front in those regions. The STOXX-50 index is now getting closer to the 5,000pts/5,050pts zone, still trading inside its bullish channel that started at the beginning of August.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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