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XTB TRADEBEAT

Stocks attempt to recover; Oil surges on large DOE drop

Summary:

  • Stocks rise on easing of trade tensions
  • Oil surges on largest DOE draw since Sep ’16
  • ZAR drops on Moody’s report
  • Will Bitcoin boost Japanese growth
  • Deutsche Bank sinks to new all-time low

Two positive developments not far apart have caused a fairly sharp bounce in stock indices with the DE30 jumping over 200 points off its lows while the US500 moved up near to its highest level of the week. First off, some comments from Trump relating to trade have seemingly shown a little softer approach with the president deciding to use less stringent methods to curb Chinese investments in US-based technology companies.

A massive drop in the weekly crude oil inventory release has provided further support to the rally seen in the oil price since last Friday’s OPEC meeting with Oil.WTI trading back within striking distance of its 2018 peak. The headline decline of 9.9M barrels was even larger than last week’s sizable drop of 5.9M and represents the largest decline since September 2016.

 The South African rand is among the weakest EM currencies on Wednesday as investors are digesting comments offered by Moody’s rating agency. It said yesterday that the South African’s move to allow land expropriation without compensation could deter investment and added to political uncertainties preventing a recovery of sentiment. Bear in mind that the agency will review the country’s credit assessment in October. 

Major cryptocurrencies have not been able to shake off their recent falls as of yet, and in fact some of them are looking to yet lower levels. Meanwhile, over the course of the last hours we were offered some contradictory comments (as it usually happens) with regard to the most famous digital currency. Let’s begin with a positive one coming from Japan where the CEO of financial services giant SBI Holdings Yoshitaka Kitao said during the Japan Blockchain Conference in Tokyo that the Japanese economy could be about to boom once again thanks to Bitcoin and blockchain technology after decades of economic malaise.

Deutsche Bank (DBK.DE) is the biggest underperform among companies included in the DAX index. The company announced that the head of the Japan asset management department is set to leave the Bank. However, this development does not seem to be strong enough to justify today’s sell-off of the Deutsche Bank shares. The scale of decline can be accounted to the long-present negative attitude towards the company. After the first hour of trade Deutsche Bank has traded 3.4% lower.

 

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