Daily market commentary: Brent crude oil prices hedge down


Brent crude oil prices hedged down during early Tuesday trading, adding to the losses of the previous session when it dropped by more than 3%. It is interesting that these losses are occurring at the same time as the G7 price cap on Russian oil kicks in. The measure, which some feared would destabilize the market, hasn’t yet produced such effect. With traders still weighing the actual impact of the price cap on the markets, other factors continue to dictate oil’s price action. Among these we can include expectations of further monetary tightening from the US Federal Reserve. Yesterday’s losses came as US PMI data revealed that the country’s economy is still running hot, creating scope for more interest rate hikes, and downgrading short- to medium-term growth prospects; a scenario that would entail a drop in oil demand..

Ricardo Evangelista – Senior Analyst, ActivTrades

Daily Market Commentary

European Shares

Share markets fluctuated in Europe on Tuesday, following an Asian trading session closing on a mixed tone as positive sentiment from China offset uncertainties linked to the latest batch of US data. Traders continue to welcome the latest developments from China as Beijing continues to shift away from its zero-covid policy following its decision to stop testing requirements in several public areas. This shift in policy is likely to accelerate risk appetite in the region in the short- to mid-term, especially as Chinese shares can be bought at a much cheaper price following this year’s discount. Elsewhere, investors are maintaining their focus towards US macro data as the “good news is bad news” stance seems to be back on track after last week’s strong NFP and yesterday’s better than expected US service sector numbers fuelled the prospect of higher terminal borrowing rates in the country. While a slow-down or pivot in rate hikes is now fully priced in, investors are still struggling to assess where rates will sit, and how far the Fed will go with its tightening cycle. Most European benchmarks have now broken-out their bullish trendline, now trading close to their first available support, with prices likely to keep trading sideways if uncertainty will remain. Today’s market volatility may be on the rise as traders brace for US import/exports data alongside the EIA short-term energy outlook, which may have a significant impact towards the energy sector.

Pierre Veyret– Technical analyst, ActivTrades

Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.


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