Three things you need to know today

Alistair Schultz Independent Analyst

Oil Price recovery

Oil has seen a turbulent twelve months; the onset of the pandemic and the very ill-advised output increases early in 2020 saw the collapse of prices in futures markets. Considering how nasty it was last time I am sure the memory is still quite fresh and raw for many oil producers, who have been mostly compliant with oil cuts throughout the pandemic. Currently both brent and west Texas intermediate crude prices have recovered to near $60 per barrel a long stretch from the worst of the oil crash in 2020.

Another OPEC meeting is on its way, so expect them to measure for compliance of the current output agreements. I feel that we may be up for another bout of controversy surrounding oil in the near term; The relationship between OPEC+ and Russia is sketchy at best when I comes to oil cuts and pricing, and a slight disagreement could result in another run of output increases that flood the market and dilute value.

Yellen and life after stimulus

Former Federal Chair Now Treasury Secretary Janet Yellen has spoken very highly on Joe Bidens stimulus plan over the weekend. She again pushed the theory that if the US enacts a large enough stimulus package that ‘maximum employment' could be achieved by 2022, but a miss on the size of the package would ultimately leave the US economy struggling for longer.

I am inclined to agree with Former treasury Secretary Larry Summers who highlighted the issues of a large stimulus package in relation to inflation. As much as a gigantic stimulus package sounds nice, $30 trillion of debt is hardly appealing, and neither are the prospects for developing another asset bubble or runaway inflation.

Meme Stocks

It's the story that just wont die, the WallStreetBets saga it lives. Now while the likes of GME, AMC and even silver seem to have come back to reality, it has brought a behavioral change. Investors previously considered the pros have begun moving into other asset classes to avoid the potential pressures of retail traders. One such example is the increase of CDS and CDO volumes, those pesky instruments at the center of the GFC. Most retail traders are unable to get access to this market making a viable way of avoiding retail traders entirely while still conducting short side operations.

Author

Alistair Schultz

Independent Analyst

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.