Jens Nærvig Pedersen
Danske Bank A/S
Market Movers
There is a limited number of interesting data releases on the calendar today to guide financial markets in the midst of rising turmoil. The market will therefore likely position itself ahead of Federal Reserve chairwoman Janet Yellen’s Humphrey Hawkins testimony tomorrow.
The key event for the oil market will be the release of the International Energy Agency’s Oil Market Report today. Last month’s report showed a drop in China’s oil demand in Q4 15 and a downwards revision in its forecasted demand for 2016. The market will therefore take note of further revisions to the outlook for world oil demand, as weak demand has been the main culprit behind the significant slide in the oil price.
The US Energy Information Administration is also scheduled to publish its updated oil market forecasts in its Short Term Energy Outlook today.
Selected Market News
The VIX index climbed to the highest level since the middle of last month and the gold price topped the highest level since last summer yesterday, as broad-based risk aversion has taken over financial markets on the back of concerns over the state and outlook for the global economy. Consequently, stocks and commodity markets were outperformed by core fixed income markets on a day where the only real news on the economy were new figures indicating declining investor confidence in the euro area. The rout has continued overnight with Nikkei notably plunging more than 5%.
Headlines continue to surface in the oil market of hints that OPEC and non-OPEC oil producers are looking into ways to cooperate to stabilise the oil market and the oil price. Recent attention has been on rumours that Russia and Saudi Arabia could be working on such a strategy. Yesterday, Saudi Arabian oil minister Ali al-Naimi confirmed that Saudi Arabia and Venezuela have held a meeting on the topic. The 3% drop in the price on Brent crude yesterday suggests that the oil market is paying less attention to major oil producers trying to ‘talk up’ oil prices and more to the broad concerns for global economic growth that are currently hampering financial markets.
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.
Recommended Content
Editors’ Picks
USD/JPY briefly recaptures 160.00, then pulls back sharply
Having briefly recaptured 160.00, USD/JPY pulls back sharply toward 159.00 on potential Japanese FX intervention risks. The Yen tumbles amid news that Japan's PM lost 3 key seats in the by-election. Holiday-thinned trading exaggerates the USD/JPY price action.
AUD/USD extends gains above 0.6550 on risk flows, hawkish RBA expectations
AUD/USD extends gains above 0.6550 in the Asian session on Monday. The Aussie pair is underpinned by increased bets of an RBA rate hike at its May policy meeting after the previous week's hot Australian CPI data. Risk flows also power the pair's upside.
Gold stays weak below $2,350 amid risk-on mood, firmer USD
Gold price trades on a softer note below $2,350 early Monday. The recent US economic data showed that US inflationary pressures stayed firm, supporting the US Dollar at the expense of Gold price. The upbeat mood also adds to the weight on the bright metal.
Ethereum fees drops to lowest level since October, ETH sustains above $3,200
Ethereum’s high transaction fees has been a sticky issue for the blockchain in the past. This led to Layer 2 chains and scaling solutions developing alternatives for users looking to transact at a lower cost.
Week ahead: Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.