Stock markets continue to calm after Monday’s madness, while a slump in US oil inventories shows there is nothing with American oil demand following Friday’s shock job numbers, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
Stocks rise and the VIX falls
“The disorderly selloff of Monday’s session has been replaced with more gains for stocks and a continued decline in the volatility index, a sign that things continue to calm down. The light macro and earnings calendar this week has proved to be an unexpected blessing, giving investors space to reassess their outlook on the next few months. However, it might not take much to tip them into risk off mode again, particularly if signs of a fresh unwind in the yen trade rear their head.”
Oil prices hit three-day high
“Oil prices hit six-month lows at the beginning of the week despite signs that geopolitical tension in the Middle East might boil over into all-out war. While an Iranian strike on Israel still seems likely, today’s sharp drop in US inventories has been behind the surge in WTI and Brent this afternoon. The US economy might be closer to a recession than it was a week ago, but oil demand isn’t currently flashing any warning signals.”
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