OIL
After Friday’s surge, when the price of the barrel of Brent crude rose more than 5%, oil prices showed signs of stabilisation this morning. Prices eased slightly but, as the European session got underway, remained above the $90 level. The sudden price increase felt on Friday came as traders pondered on the developments in Israel and started to price in the potential disruption to the global oil supply that may emanate from the conflict. The big question mark surrounds a possible spillover of the confrontation, which could affect major oil producers in the region, and how such a scenario could affect the global supply of crude. Against this background, uncertainty will remain high, in a dynamic likely to continue to support the price of the barrel.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European markets started the week trading mostly lower, alongside US futures and following a slide in Asian equities overnight, as market sentiment remains under pressure.
The status quo remained on most asset classes on Monday, and risk aversion still seems to prevail as investors wait for further geopolitical developments in the Middle East, hoping the military conflict will not escalate further or directly involve other nations.
Price action hasn’t been very significant so far, and havens such as gold, silver, oil and treasuries have mostly held last week’s gains while global equities remain under pressure amid a “wait and see” stance from traders.
With the lack of significant news from both the corporate and macro data front today, the current geopolitical situation involving Israel, the Gaza Strip, Iran and the US will likely remain a major market driver for everyone.
The STOXX-50 index is trading lower than last week following a break-out of its short-term bullish trend, opening the door to a deeper correction with the 4,060.0pts / 4,010.0pts zone now in sight.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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