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Brent Oil hits highest level of the year

Oil prices have soared once more today after Friday’s strong gains, and in doing so the European benchmark Brent has traded it’s highest level since early December last year. As we begin a big week for Oil traders that will conclude with the meeting of OPEC and non-OPEC members in Doha, there’s a noticeable coincidence in the market in that the current price seen is in close proximity to that traded when OPEC last met. There’s been no news supporting this latest rally, with the announcement of record production in Iraq this morning a possible bearish development that has failed to stop the bid in it’s tracks. 

It’s been a relatively quiet day on the data front with comments from US Treasury secretary Jack Lew and FOMC member William Dudley failing to cause any reaction in the markets. News that Blackrock, the world’s largest money manager, are pulling funds out of Japanese equities in a move that will contribute to the 13 weeks straight outflows by foreign investors raises question marks around the strength of the Nikkei going forward.

The Dax (+0.64%) is the best performing of the major indices in Europe, however it has pared back some of it’s early gains going into the cash close to trade close to the 9700 handle. The FTSE (+0.02%) has had a remarkably quiet day considering the moves seen in the Pound which have possibly negated the rise seen in many other indices. Across the pond all three major US indices are in positive territory at the time of writing with the Nasdaq (+0.24%) leading the way. It may be worth noting that the small cap index the US2000 (-0.19%) is trading in the red and may be serving a sign of caution.

It’s been another good day for Crude bulls with both Brent (+2.20%) and WTI (+1.77%) moving firmly higher. American Benchmark WTI now trades at $40.27 back abov ethe big psychological $40 handle. Precious metals have also risen strongly with Silver (+3.58%) outperforming the more widely viewed Gold (+1.44%). Natgas (-3.58%) has come under pressure however and dropped back after strong recent gains of late.

The Pound has begun the week brightly gaining against most it’s major crosses as the GBPUSD (+0.92%) trades back near last weeks and above the 10 and 50 day SMA. The EURUSD (+0.14%) and USDJPY -0.17%) have been relatively quiet so far, with both trading in narrow ranges in a similar fashion to Friday’s session. USDCAD (-0.58%) has moved back close to recent lows as the Canadian Dollar receives another boost from the resurgent Oil price. 

Looking forward we have the outcome of the meeting between Fed Chair Yellen and US President Obama this evening before an Asian session that’s most significant release is the latest business confidence data from Australia. A slew of UK data at 09:30 tomorrow morning will give a better indication as to the the inflation dynamics in the economy at present and will be of particular interest to Sterling traders after today’s strong gains. 


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