Oil surges higher as equities remain well supported

Summary:

• Oil surges on Saudi comments after dip on inventories

• US500 remains near recent highs as US-China trade talks end for now

• BOC unchanged as expected; USDCD dips below 1.32

• EURUSD break 1.15 for the first time since October

• Do regulators hinder the development of cryptocurrencies

There’s been a strong push higher in the crude markets in the past hour with both Oil and Oil.WTI recovering from a dip after the latest inventory numbers, largely thanks to some upbeat rhetoric from the Saudi Oil minister. Falih said that “We are confident OPEC+ cut deal are certain enough to bring market into balance unless something unexpected happened”. Falih’s comments have driven the markets up to their highest level in almost a month with Oil.WTI higher by more than 4% no the day at the time of writing.

Once more US indices are trading in the green this afternoon with the US500 moving up to its highest level in 3 weeks and probing the potential resistance zone from 2589-2624. After Friday’s strong gains the recent sessions have been a bit more measured, but they have still been gains nonetheless with the market on course for a 4th consecutive green close. European markets are also up on the day, but the DE30 and UK100 are lagging behind their peers across the Atlantic.

The latest monetary policy decision from the Bank of Canada (BOC) has seen no change in the base rate, with the overnight interest rate remaining at 1.75%. Despite this, there has been heightened volatility in the Canadian dollar since the announcement with the USDCAD pair falling below 1.32 to tag its lowest level since the beginning of December. Looking at the accompanying statement there doesn’t really seem to be too much on the hawkish side to support further gains in the Loonie, with the initial gains possibly due to it not being as dovish as some had expected.

The US dollar is on the selling block on Wednesday after comments from the Fed officials trying to suggest that future moves will be more data dependent and leaning towards the view that interest rate hike this year is not to be taken for granted. One of the consequences of this is EURUSD rising well above 1.15 for the first time since October of 2018. The pair sees another resistance at 1.1625 but it’s not particularly strong. Bear in mind FOMC minutes at 7pm BST (8pm CET) that may have an impact on the pair too.  

The larger crypto market are little change dn the day with Bitcoin continuing to hover around the $4000 mark.  Nonetheless, more attention deserves Litecoin which broke through its short-term resistance earlier this week. We are presenting a technical view regarding this cryptocurrency here. Let’s begin today’s newsflow with the interesting story from Ukraine where a high-ranking representative of the country’s central bank, Mikhail Vidyakin, said that “an excessive number of regulatory agencies are interfering with the prospects of successful development of cryptocurrencies in Ukraine.” He also added that “the main issues around the legalization of digital assets are institutional in nature.” Instead, he favours regulations that give the cryptocurrency market a chance to develop.