Daily Report (Market Drivers & Snapshot) – 20/04/2018

OPEC – JMMC Meeting in Jeddah all day.

Dow Jones 24566 / Dax 12553
Oil $68.37/bbl
Gold $1341/oz
UK: No Data.
EZ: No Data.
North America: CAD: CPI and Retail Sales figures at 03:30 pm.

Omani oil minister Mohammed al-Rumhy told reporters that $65-75/b was a “more realistic number” for the rest of the year. “I don’t think we need to worry about a $100 scenario,” he added. His comments pared some of the crude oil gains. As said yesterday in our report, the market pushed the crude oil prices to a new 3 years high on expectations that OPEC and Russia will press for more production cuts. Our expectation was for no change in recommendations. This morning, OPEC committee stated that “the meeting will end with no new recommendations.” Crude oil prices may slip back to the 67.00 level.

Meanwhile, the Sterling slipped further today on dovish Carney as he said: “May hike No Done Deal.” Moreover, EU said to reject U.K. Brexit plan; the main controversy is the Irish border issue. On the other hand, ECB seen delaying stimulus exits decision on their next week monetary policy meeting, as trade worries mount and the economic figures deteriorated. Both the Euro and the Cable look heavy today and further losses may occur.

On the other side of the ocean the biggest story in the financial markets yesterday was the sharp rise in Treasury yields. Two year yields hit fresh 9 year highs as ten year rates rose above 2.9%, the increase in yields supported the dollar’s gains against other currencies. North Korea’s denuclearization discussions supported the dollar as well. Further Iran officially stated that they will switch to euros from dollars for its foreign financial reporting, no direct impact on the dollar.

Today A.D.G. Rosenstein tells Trump he’s not target in Muller, Cohen probe. The geopolitical uncertainty is on hold for now and no major economic news in the U.S. The market will follow OPEC meeting and any direction from central banker’s speeches.

Today’s Snapshot
DAX-M18 Last 12567 (same outlook from yesterday, as we see potential profits in Dax for the coming week)

The DAX crossed the 12600 level two days in a raw but couldn’t close above it. That is preventing a decisive breakout above 12,600. The market is fluctuating higher and lower around the key February high of 12,600 this indecisive phase of trading continued into the early moves of today’s session. The run of higher lows continues to build above the six week pivot at 12,160 with support at 12,256 and 12,375. A close above 12,600 suggests the bulls are finding traction, with opening to 12,745 and 13,000 next resistance levels.

Written by:
Nehmat Harb
Financial Advisor

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