Oil swoons as equities remain well supported

Summary:

• Wall St. set for record weekly close

• Oil sinks over 3%

• Chilean Peso surges after CB intervention

• FTSE and GBP set for weekly gains

• Crypto newsletter: Cryptocurrency regulations for German financial firms?

Despite it being a shortened week for US markets and US indices ended earlier than usual this evening, it’s been another good one for bulls with record highs continuing to tumble. The Dow Jones Industrial Average (US30 on xStation) began on Sunday night with a gap higher and while it has pulled back a little from the all-time peak of 28172, the last couple of day’s trade are showing wicks below on the D1 candles which suggests any dips are still being keenly bought.

Being the final trading session in November there is a good chance that we get some month-end flows and overall it’s been a good performance for US stocks in the penultimate month of the year. The Dow began the month beneath the 27000 handle and has moved a full 1000 points higher to be on track for a monthly gain in excess of 4%. 

Russia's Novak says he favors taking OPEC+ extension decision closer to April. In addition the Interfax news agency cited kazakhstan's energy ministry said that Kazakhstan's Kashagan oilfield will resume oil production of 400,000 barrels per day by mid-December. Oil.WTI price sinks nearly 3%. The nearest support to watch is $55.5 handle.

Chilean peso is surging at the open and is the best performing EM currency today. The move is a response to yesterday’s announcement from the Central Bank of Chile that it will intervene on the FX market to prevent further depreciation of the currency. Industrial production data from the country was released at 12:00 pm GMT and it showed a decline of 3.4% YoY while market expected a decline of 6% YoY. It should be noted that social unrest started in mid-October therefore the data reflects half a month of protests and their damage on the economy. As one can see, the impact of the unrest is not as big as markets feared.

It’s been a positive week on the whole for UK assets, with both the FTSE 100 and the pound on track to post solid gains. The blue-chip benchmark is set for a second consecutive weekly gain with the bulk of the rally coming on Monday’s open as equities around the globe gapped higher over the weekend on further hopes of a US-China trade deal. Since then the market hasn’t really done much with some fairly subdued trade that has been caused in part by it being Thanksgiving week in the US. The index is around 2% higher than where it ended last month and while it still lags behind its international peers the market seems well placed for further gains heading into year-end.

Our latest Crypto newsletter focuses on the possibility that regulations which would allow for German financial firms to deposits cryptocurrencies could soon be implemented. Read the article in full here.