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Stocks recover as Oil rises on DOE draw

17:13 20 June 2018

Summary:

  • Stock indices recover after recent weakness
  • Oil gains after DOE draw; OPEC on Firday
  • USD edges higher on Powell comments; Housing data disappoints
  • South African Rand surges on hike hints
  • Crypto mixed following another exchange hack

Given the latest tariff talk, stock markets are holding up fairly well with most of Europe and the US in the green on the European cash close. The US500 is back near its highest level of the week after dropping sharply during the Asian session on Monday night with growing fears surrounding an escalating trade war causing a drop of more than 40 points. However, a low was made not long after the European open and the market saw buyers step in and buy the dip and a long wick is evident below on a D1 candle.  

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There’s been a surprisingly muted reaction in the Oil price to the latest inventory data from the US, probably due to the fact that we are just a couple of days away from the bi-annual OPEC meeting. The weekly DOE inventory showed a print of -5.9M vs -2.1M expected and -4.1M prior with the reading being the lowest since January. Last night’s API came in at -3.0M so whichever way you look at it today’s number represents a large drawdown. 

It’s been a relatively quiet day on the data front with the only macro data from the US this afternoon the latest housing figures which missed forecasts. A reading of 5.43M for existing home sales in May is a little on the soft side, with  consensus calling for 5.52M and a prior reading of 5.45M (revised lower from 5.46M). The USD is making some small gains despite this, helped by positive comments from Fed chair Powell. 

The gains seen in the South African Rand have been far more impressive with ZAR surging even as the May inflation report came in below market expectations. The upward move is mainly driven by the latest remarks offered by the country’s central bank hinting at possible rate hikes once downward pressure on the ZAR does not subside.

The crypto space is fairly mixed with no clear moves seen overall. There have been reports of another hacking attempt however, with a statement released by Bithumb, the second largest South Korean cryptocurrency exchange and the sixth largest in the world, saying that it has been targeted by hackers. Cryptocurrencies worth around $30 millions were stolen in an attack. 

 

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This article is provided for general information purposes only. Any opinions, analyses, prices or other content is provided for educational purposes and does not constitute investment advice or a recommendation. Any research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Any information provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.

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