Summary:
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Oil hits highest level since 2014
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USDTRY plunges on hopes for US Pastor release
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EURUSD hits 3-month high above 1.18
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Stock indices lower as China cancel US trade talks
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Crypto markets in the red
The price of Oil, as taken by the front month Brent crude contract, has hit its highest level in four years after the world’s biggest producers refrained from agreeing upon a production increase over the weekend. The OPEC+ group which includes Russia had been rumoured to be considering raising their output by 500k barrels per day at their meeting in Algeria and this speculation caused a swift drop in the price on Friday afternoon. This rumour was given greater credence by a Trump tweet a couple days beforehand in which the US president called for the organisation to get prices down, but the inaction has buoyed the market which has opened up strongly and rallied through the day.
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Open account Try demo Download mobile app Download mobile appThe US dollar is down on Monday and emerging market currencies are gaining ground despite intensifying rift between the US and China. USDTRY is down as much as 2% after the WSJ suggestion that the US pastor detained in Turkey could be freed next month. Such move could repair relation between Turkey and US as president Trump requires the pastor to be freed before any talks with Ankara resume.
There’s been a notable rise in the Euro this afternoon, with the single currency gaining across the board after some hawkish comments from Mario Draghi. The ECB president was speaking in Brussels, as the Italian testified on the economy and monetary policy and his remarks seem to have caused a bit of a reaction in the markets with not only the currency rising but also the German Dax (DE30 on xStation) and 10-year government bond (Bund10Y on xStation) falling lower. The EURUSD rose above the 1.18 handle to a 3-month high earlier but price has subsequently pared the gains somewhat.
The DE30 remains lower on the European close while US indices are fairly mixed. The US30 trades on its lowest level of the day at the time of writing while the US100 is close to its highs. The US500 has fallen back to retest its breakout level around 2918 and this could be seen as a key level to watch going forward. One possible cause of the decline was news that China has pulled out of scheduled trade talks with the US. While this is no doubt negative overall, it seems highly unlikely to mark a turning point for these markets as they shrugged off the trade-war escalation between the world’s two largest economies last week en route to higher prices.
Another asset class trading in the red today is the Crypto space with some sizable declines seen across the board. Ripple is the worst hit and lower by 8% after last week’s incredible gains. The other 4 markets are also trading lower with Bitcoin down by a little over 1% to trade around 6550 at the time of writing. According to Bloomberg reports the parent company of the Brazilian’s largest independent broker is setting up a cryptocurrency exchange (XDEX) in coming months. Some leaks have signalled that the new exchange will support trading in Bitcoin and Ethereum. The reason why the broker decided to take such a step was the fact that 3 million Brazilians already own some BTC holdings. This number could be impressive when we compare it with the number of inhabitants having holdings in stocks which is around 600k.
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