Crude oil surges amid renewed Middle East conflicts

Thursday, March 26, 2015

Crude oil prices rallied over 5% this morning, heading for their biggest five-day gain since 2011, supported by news that Saudi Arabia and its allies started bombing Shiite rebels targets in Yemen. Brent front month futures opened at $56.35 and surged towards $60 per barrel, while WTI front month futures opened at $49.02 and rallied over $3 above $52 per barrel in early trade this morning. The current conditions are quite tentative showing a possible escalation in tensions between Saudi Arabia and Iran.

Brent futures surge towards $60

CL1 Comdty (Generic 1st 'CL' Fut 2015-03-25 16-11-20

Asian equity markets retreated sharply overnight as the Nikkei index plunged over 270 points (-1.39%) to end the session at 19,471.12 while the Hang Seng index slid lower (-0.13%) towards 24,495. The JPY surged 0.9% following the renewed political uncertainty in Middle East.     

European equity markets fell sharply in early trade this morning, as investors remain cautious following the deteriorating conditions between Saudi Arabia and Yemen. The CAC, DAX, IBEX and London equity benchmark indices fell between 0.6% and 1.5%. German GfK consumer confidence rose to 10.0 in April from 9.7 in March, beating analysts’ expectations of 9.8. However, the optimistic German economic data has been overshadowed by the uncertainty in Middle East.

The USD index weakened towards 96.0 against a basket of currencies, while the euro climbed above 1.10 against the US dollar. The release of the weekly US jobless claims and Kansas City Fed manufacturing data could provide further momentum today.   

USD index retreats sharply towards 96.0

DXY Curncy (DOLLAR INDEX SPOT)   2015-03-26 09-25-11

Kraft Foods Group announced that it will merge with H.J. Heinz yesterday. Following the news, Kraft’s sharp prices rallied over 30%.

Kraft Foods Group jumped 30%

KRFT US Equity (Kraft Foods Grou 2015-03-26 09-26-32   

Events for today: 

0700

DE

Apr

GfK Consumer Confidence

0930

UK

Feb

Retail Sales

1230

US

w/e

Jobless Claims

1345

US

Mar

Markit Composite PMI

1500

US

Mar

Kansas City Fed Manufacturing

1530

US

w/e

EIA Nat Gas

2330

JP

Feb

CPI

 

All times UK Local Time

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