Crude oil prices hovered within the recent range in early trade this morning as investors await renewed talks that Russia is ready to meet OPEC and non-OPEC crude oil producers in order to discuss the market.
The news provided strong upside momentum in the oil market, as Russia has been thus far unwilling to cut oil production and cooperate with the OPEC members in order to support the current low crude oil prices.
European equity markets opened the week in the negative side, as disappointing European PMI manufacturing data weighed heavily on market sentiment, raising fresh doubts about Eurozone’s economic stability and current prospects.
European equity markets rebounded strongly in today’s session, showing a strong upside rally after the heavy sell-off in the last few sessions. Robust corporate earnings results by Apple and Swedbank AB improved market sentiment and increased risk appetite.
Asian equity markets retreated sharply to hit their lowest level in six months, tracking sharp declines in Wall Street. The Nikkei index plunged more than 330 points (-2.22%), breaching below the key level of 15,000.
Iron ore, which remains key export of the Australian economy, extended its year-to-date price drop to more than 40% overnight. China’s equity markets extended declines overnight despite the fairly robust Chinese economic data.
Crude oil prices and base metals remained under pressure in today’s trading session. Brent front month futures retreated sharply more than 1.4% to retest $97 per barrel as bearish oil fundamentals weighed heavily on market sentiment.
Silver has been under heavy pressure in early trading this morning declining for a fourth consecutive session towards $17.50. Gold retreated lower trading around $1210/per ounce remaining near its lowest level in 8 ½ months.
Scotland voted ‘No’ to independence after voters decided to stay in the United Kingdom by 55% to 45%. The GBP rallied strongly following the announcement and hit a 2-year high against the euro at 1.2804 and a 2-week high against the USD at 1.6525.
Precious and base metal prices rallied, partially on softer USD while investors remained cautious awaiting key decisions from the US Federal Reserve Bank tomorrow regarding a possible time-frame for an interest rate increase. Brent front month futures surged strongly above $99 per barrel.
European equity markets opened the session higher this morning ahead of the releases of Eurozone’s industrial production data for July and employment figures for Q2 2014. Sterling fluctuated around 1.625
Brent front month futures retreated sharply to reach a 17-month low yesterday. This morning, crude prices breached below $99 per barrel. The high levels of crude oil stocks and the strong USD weigh heavily on market sentiment, while oil demand from the US and China remains fairly low.
Brent front month futures remain under heavy pressure, breaching below $100 per barrel. Brent futures plunged and tested a low at $99.36 yesterday but managed to finish the trading session at $100.20. The recent tepid US economic data and the strong USD currently weigh heavily on market sentiment in the oil market.
GBP weakened to its lowest level in 10 months -trading around $1.6168- following concerns about possible political uncertainty after an opinion poll showed supporters of Scottish independence from Britain have been taking the lead for the first time since the referendum campaign began.
Brent front month futures retreated sharply yesterday to retest $102.50 per barrel. Investors remained cautious following the fairly disappointing PMI manufacturing data from the Eurozone and China. In addition, geopolitical risks in Russia and Middle East continue to dominate the markets.
The euro remains under heavy pressure trading around 1.33 against the USD, showing sharp downside momentum following the recent down-trend which started on 1st July when the European currency was trading around the 1.37 area.
Brent front month futures slid sharply lower in early trading this morning, extending the recent sell-off in the oil market. Brent front month retreated towards $103.5 per barrel suggesting the potential for further declines towards $102.98. (August 2013’s low).
Portugal’s central bank took control of Banco Espirito Santo in a 4.9 billion-euro ($6.6 billion) bailout. The Bank of Portugal’s Resolution Fund will move Banco Espirito Santo’s deposit-taking operations and most of its assets to a new company, Novo Banco, which it will own outright.
The Dow Jones Industrial Average fell sharply by more than 300 points yesterday. Asian equity markets reversed and retreated lower, tracking a large sell-off in US equities which dampened market sentiment and raised renewed concerns about the strength of the US economy.
Argentina defaulted on its sovereign debt for the second time in 13 years on Wednesday, as serious last-minute talks between the country’s government and holdout creditors failed to come to an agreement.
European Union expanded sanctions against Russian individuals and companies yesterday, adopting a range of fresh economic sanctions. Furthermore, US in coordination with Europe will “implement additional measures” against Russia this week, the White House reported yesterday.
The USD continues its strong rally, holding above 81.0 near a six-month high against a basket of currencies. Today, the main focus will turn to the release of the US Case-Shiller index as well as the consumer confidence figure for July and the Dallas Fed services index.
Asian equity markets rallied strongly with the Hang Seng Index climbing more than 200 points (0.9%) towards 24450. The Nikkei also posted strong gains, breaching above 15,500, rising more than 0.45%. Profits earned by Chinese industrial companies surged by 17.9% in June.
There is a lot of uncertainty across equity and commodity markets today. Reports that a Malaysia aircraft had been shot down over the Ukraine yesterday triggered a spike in risk aversion and raised renewed concerns over political tensions between Ukraine, Russia and the West. Furthermore, following an Israeli ground offensive in the Gaza Strip, conditions remain fairly tentative in the region.
Chinese economy expanded by 7.5% in the Q2 of 2014, beating analysts’ expectations of a 7.4% rise. The GDP report showed optimistic signs for an achievement of the Chinese government target of 7.5% growth for 2014.