Crude oil rebounds due to a weak USD and bullish inventories data

Wednesday, May 06, 2015

Crude oil prices rebounded and posted renewed gains this morning with WTI front month futures climbing above $61 per barrel and Brent futures surging above $68 per barrel. The weaker USD provides strong support to the oil market, while the main focus will turn to the weekly EIA oil inventories report this afternoon. The release of the weekly API oil inventories report yesterday was very bullish for the market after showing an unexpected large decline of 1.5 million barrels in crude oil stocks for the week ending 1st May 2015.

Brent front month futures climb towards $69/barrel

COM5 Comdty (BRENT CRUDE FUTR  J 2015-05-06 08-50-03

Precious metal prices have been consolidating within the recent range during the last few trading sessions, struggling for clear direction. Gold hovered around $1190/ounce this morning and silver held around $16.50. Market participants will be keeping an eye on the release of the US ADP Employment data which could give indication ahead of the release of the US non-farm payroll data on Friday.

China’s HSBC services PMI increased to 52.9 in April from 52.3 in March, while China’s composite PMI was reported at 51.3 in April compared to 51.8 in March. Following the mixed PMI data, the Hang Seng index consolidated overnight and slid slightly lower towards 27,700 (-0.20%). The Dow Jones index retreated over 140 points yesterday (-0.80%), while the S&P 500 and NASDAQ declined sharply by 1.18% and 1.55%, respectively, spreading a bearish tone across the global equity markets.

However, this morning European equities rebounded and climbed higher in early trade. The DAX and London equity benchmark indices held in positive territory in early trade while the CAC and IBEX indices remained under some pressure. The euro rallied further and extended gains above 1.1250 against the USD, showing strong upside momentum. In addition, the USD index plunged towards 94.50 against a basket of currencies this morning following the recent downtrend since mid-April 2015.

EURUSD

EUR Curncy (Euro Spot )  2015-05-06 08-36-41

 

Events for today:

0245

CN

Apr

HSBC Services PMI

0855

DE

Apr

Markit Services PMI

0900

EZ

Apr

Markit Services PMI

0930

UK

Apr

Markit/CIPS Services PMI

1000

EZ

Mar

Retail Sales

1315

US

Apr

ADP Employment Change

1330

US

Q1

NF Prod. & Labour Costs

1530

US

w/e

EIA Energy Stocks

All times UK Local Time

 

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