Global equities experience further sell-off

Wednesday, August 26, 2015

WTI front month futures have been hovering around $39 per barrel ahead of the release of the weekly EIA oil inventories data. Brent front month futures remain under pressure after trading around $43 per barrel. Crude oil prices have lost over $20 during the last 3 months as bearish oil fundamentals and a slowdown of Chinese oil demand have weighed sharply on market sentiment in the oil market. That means possible cheaper petrol prices for the coming weeks. On Monday, the RAC suggested that the price of unleaded petrol is likely to decrease to £1/litre in the next few weeks (the lowest level in six years), according to Telegraph.  

WTI front month futures remain under pressure below $40/barrel

CLV5 Comdty (WTI CRUDE FUTURE  O 2015-08-26 09-03-49

Asian equity markets extended declines overnight, remaining under heavy pressure. The Hang Seng index dropped nearly 150 points (-1.5%), while the Shanghai Composite index declined by 1.3%. However, the Nikkei Index bucked the downtrend and climbed higher to end the session above 18,370 (+3.20%). Please note that Chinese equity markets have lost 30% of their value in the past three weeks, while the turmoil has weighed strongly to other global equity and commodity markets.

US equities failed to remain in positive territory yesterday, as the Dow Jones, S&P 500 and NASDAQ indices gave back earlier gains and finished lower between 0.45% and 1.35%. The USD index has been trading around 94.0 against a basket of currencies this morning. Market participants will be keeping an eye on the release of the US durable goods and the Markit Composite PMI for further direction.

European equities experience further pressure this morning as the DAX, CAC, IBEX and London equity benchmark indices retreat between 1.75% and 2.20%, in early trade. The EUR has been holding around the 1.15 area, against the USD. In precious metals, gold has extended declined towards $1130/ounce this morning and silver breached below the key level of $15. The softer USD has failed to provide any support to base metal prices which have been under serious pressure amid concerns over Chinese slowdown. Copper has retreated over 1.5% this morning, heading towards $4980 and aluminium dropped over 1% towards $1500.

 

Events for today:

1330

US

Jul

Durable Goods & New Orders

1445

US

Aug

Markit Composite PMI

1530

US

w/e

EIA Energy Stocks

All times UK Local Time

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