A strong rally for crude oil and global equity markets

Tuesday, February 03, 2015

Global equity markets extended gains in today’s trading session and climbed higher following a strong rebound in crude oil prices and as concerns regarding Greece’s uncertainty eased. The DAX, CAC, IBEX and the London equity benchmark index rallied between 0.9% and 2.6%, while in the US the Dow Jones index gained over 180 points (+1.05%) towards 17,550 and the S&P 500 index surged almost 1% despite the tepid economic data.

The DAX index extended gains towards 11,000

DAX Index (Deutsche Boerse AG Ge 2015-02-03 16-03-08

The IBEX index rallied over 2.5%

IBEX Index (IBEX 35 Index )  Dail 2015-02-03 16-02-57

US factory orders declined -3.4% in December missing analysts’ expectations of a 2.4% drop, while the ISM New York purchasing manager index plunged to 44.5 in January from 70.8 in December. The USD index retreated below 94.0 against a basket of currencies after hitting a high at 94.697 earlier on the day.

The USD index retreats below 94.0 following poor US economic data

DXY Curncy (DOLLAR INDEX SPOT)   2015-02-03 15-48-47

In the UK, Markit/CIPS construction PMI climbed to 59.1 in January from 57.6 in December, verifying improving market conditions in the UK manufacturing and construction sectors. Sterling spiked against the dollar, surging above 1.50. Furthermore, the euro surged above 1.143 against the US dollar, amid hopes that Greece will reach a deal soon with Euro Area on debt issues.   

The euro rebounds above 1.145 against the dollar

EURUSD Curncy (EUR-USD X-RATE)   2015-02-03 16-06-49

Crude oil prices continued their strong upside rally as WTI front month futures rebounded over 3% to breach $51/barrel today and Brent front month futures rallied towards $56.50. Crude prices have climbed over $9 in the last four trading sessions, suggesting the potential for subsequent gains in the short-term, following a softer USD. In London, Royal Dutch Shell, Tullow Oil and BP surged between 2.6% and 5.1%.   

WTI front month futures rally above $51/barrel

CLH5 Comdty (WTI CRUDE FUTURE  M 2015-02-03 16-08-53

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