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XTB TRADEBEAT

Stocks keep falling while oil pares previous gains

Summary:

  • European stocks keep on declining, the SP500 futures point to another bad day on the horizon
  • Oil pares its earlier gains fuelled by the Trump’s cabinet reshuffle
  • USD continues falling, NOK gives back gains as oil resumes losing momentum

The US tariffs seem to be the only game in town today as they have daunted investors from investing in riskier assets. As a result, European equities have opened well below their close on Thursday and they keep falling until now. It’s worth adding that the details of the newly announced tariffs are to be released over the next 15 days. Meanwhile, the DE30 seems to be constantly moving downwards after it failed to break above its important resistance line placed at 12460 points. In the early afternoon losses across European stock markets range from 0.6% (the FTSE in London) to 1.6% (the German DAX).

On the commodity front we had rising oil prices in the morning following the Trump’s cabinet reshuffle but it gave back those gains. Mr Trump informed that John Bolton will be named new National Security Advisor replacing General McMaster (the first revelations leaked out already a week ago). Bolton is going to begin his term in office on 9 April. Why a change at this post matters for oil? It’s pure and simple, Bolton is seen in the eyes of markets as a person opting for the US leaving from the Iran nuclear deal which could result in fresh sanctions on oil exports. After a brief jump in oil prices they parred their gains and right now are trading flat. Elsewhere, grains are losing momentum today being down 1% each at the time of writing. Iron ore and copper are experiencing moods’ deterioration as well going down 1.5% and 0.6% respectively. 

As far as the currency market is concerned, the US dollar keeps declining being off its lows though, and the Norwegian krone has joined the losing bandwagon on the back of worse performance of oil prices. In the early afternoon the Australian dollar is the second best currency in the G10 basket giving way to its counterpart from New Zealand.

Observable calmness across digital currencies may be a bit cryptic when global equity markets took a dive on Thursday. It could suggest that cryptocurrencies have become much more resilient to any external shocks, and possibly internal ones as well (just do recall that e.g. the Bitcoin price did barely respond to any theft of virtual money). Having said that, when we refresh our well-known indicator illustrating a count of daily transactions made via Bitcoin one may discover that the trend has been going nowhere lately. After a sluggish rebound since the beginning of March the trend has come back to falls boding not well for the future Bitcoin price.

Focusing on today’s calendar one may notice that market attention should be paid to the Canadian dollar which is going to witness a possibly volatile day. Apart from the Canadian set of releases there will be some prints from the US as well as a weekly update on oil rigs published by Baker Hughes.

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