OIL
Brent oil prices edged up in early European trading but remained below $78 per barrel, following two negative sessions that led to a price drop of more than 4% this week. The global demand outlook is deteriorating, as illustrated by the latest API report, which showed a surprising uptick in US crude stocks. With markets still pricing in the OPEC+ decision to taper its self-imposed output cuts, which, if confirmed, will result in an increase in production after October, the drop in demand may create further downside for the price of the barrel.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Stocks edged higher in Europe on Wednesday, and risk appetite is growing as investors wager on rate cuts in the US. Dip buyers seem to have taken control of the market as the STOXX-50 rebounded over 4,940pts, led higher by all sectors, with top performers among tech and utility shares.
Yesterday's US JOLTs data coming short of expectations have highlighted a narrowing labour market in the world's largest economy, which sparked hopes of a more dovish approach from the Fed and provided support to equity markets.
This is seen as a strong bullish catalyst for traders who have recently struggled to assess the monetary and economic situation on the other side of the Atlantic. However, we expect market volatility to remain high throughout today's session and the rest of the week as key US PMI data looms in the afternoon, ahead of tomorrow's ECB's decision on rate and Friday's US NFP release.
While this second part of the week may bring a lot of turbulence and sharp price actions, we expect these data to shape the short- to mid-term sentiment for both US and EU equities.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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