Crude benchmarks have been the biggest gainers of the afternoon session, however they’re still set to end lower for the second consecutive week. Today we can observe several reversals in the prevailing trends of the week. The Euro and Japanese Yen are both lower alongside Gold, with all three enjoying significant gains prior to today. Stocks and Oil are the opposite, with both asset classes enjoying green days in a welcome break from recent declines.
This afternoon we had a mixed bag of data from the US with retail sales and import prices coming in above expectations and showing strength in the world’s largest economy, before the University of Michigan consumer sentiment indicator contradicted this to paint a rather more negative picture. Vice-chairman of the FOMC William Dudley was on the wires this afternoon, with his overall rhetoric seeming fairly neutral and making no comments that were particularly market moving.
The FTSE (+2.31%) is leading the way as far as stock indices are concerned, no doubt boosted by a resurgent Rolls Royce that has rallied 16% following it’s earnings release this morning. The Dax (+1.16%) and Eurosotxx (+1.48%) both end the final trading session of the week in the green, erasing some of their earlier losses whilst US stocks are also in positive territory at the time of writing, with the US500 (+1.43%) up 240 ticks.
As previously mentioned it’s been a strong day for oil prices, with WTI (+7.30%) outperforming Brent (+5.76%), as both benchmarks show they won’t go down without a fight. Gold (-0.87%) is on course for it’s best weekly gain since 2008 as the precious metal has soared on a combination of risk-off sentiment and a weakening US Dollar. The safe-haven asset currently trades close to it’s upper bound of the bearish channel that has contained price for the past 2 and a half years.
The resurgence in the Buck today comes after a bad week for US Dollar bulls, as market expectations for the path of future Fed rate hikes moves ever lower. Having said that, the Greenback is the best performing currency today, notching gains against all G10 countries. The NZDUSD (-1.46%) is the biggest mover, and the drop in EURUSD (-0.73%) of just over 80 pips may be the start of a longer term reversal.
Looking forward we have the latest Baker Hughes rig count released this evening at 18:00, with a further decline in operational drillers potentially providing further bids for oil. On Sunday night we have the latest GDP data from Japan closely followed by Chinese trade balance data as their market re opens after the week long holiday. It’s a busy week in terms of economic releases with UK CPI data at 09:30 on Tuesday followed by the latest employment figures being released the next day. Wednesday evening sees the minutes from January’s FOMC meeting released, which will be closely viewed despite the lack of action at the accompanying meeting as traders try to ascertain the central banks intentions for it’s next meeting in March.