Attention shifted away from equities over the last few days as markets await more pertinent data later on in the week. Focus instead turned towards the recently overlooked oil markets, which have had a rough start to the week to say the least. Brent Crude and West Texas Intermediate both plummeted the better part of 4% on Monday, following a surprise commitment from OPEC and its broader members to unwind production cuts from October onwards. The move is unexpected because it comes in light of reduced demand worldwide, making it hard to justify any increase in production. Losses extended on Tuesday, forcing Brent Crude down to $77 a barrel and WTI down to $73, prices not seen since January and February respectively.
Staying in commodities, gold has remained range bound for the past couple of weeks, oscillating around $2,340 an ounce. Monday saw the precious metal gain a solid one percent, only for it to completely reverse the move the following day. Silver on the other hand fared considerably worse, falling over 4% yesterday, losing the $30 level it had fought so hard to attain.
Services PMI figures are the only remaining item on the menu for today, before moving onto a potentially revealing press conference at the ECB tomorrow. The central bank is expected to reduce its deposit facility rate, the rate awarded to banks for storing cash within the ECB, to 3.75% from 4%, affecting the wider Euro interest rate. It is the first central bank to make such a move, possibly opening the way for other banks to follow suit. NFPs Friday.
Risk Warning : Trading derivatives and leveraged products carries a high level of risk.
OPEN ACCOUNT
