Chinese financial shares gave global stocks a boost. Meanwhile, the dollar weakened and oil is hanging onto gains ahead of OPEC’s meeting in Vienna today.
Oil
Crude oil has enjoyed a rally thanks to Russian and Saudi Arabian energy ministers supporting a nine-month extension of supply cuts.
Crude is flirting with the $51 mark, however momentum is falling and it’s hitting into overbought territory.
Brent Oil
The international benchmark, Brent oil, is not feeling optimistic. Brent is down 0.07% this morning as the commodity struggles to overcome the $54 mark.
Like Crude, Brent is steering into overbought territory. ‘Buy the rumour, sell the fact’ comes into play here.
However, if OPEC agree to extend cuts further than the rumoured nine-months, or if the cartel agree to cut production by more per day, both Crude and Brent could see a boost.
US Indices
Wall Street looks set to reach another record high, supporting bullish sentiments across the world.
The S&P 500 rose 0.25% yesterday, finishing above its target mark of $2404.4 – its highest closing level on record. This index looks set to inch higher and is gathering momentum, watch out for the US opening bell, where US investors may take the index much higher than their EU counterparts.
Concerns have eased in the US, after last week’s political controversies which caused the biggest one-day fall for the S&P 500 since September.
The VIX index, a measure of volatility in the market has dropped back down to 10 after jolting up to 16 last week.
European Equites
Signs that the European economy is healthy are ample. Additionally, investors believe that the European Central Bank will tread lightly when it comes to tackling the ultra-low interest rates.
It is a bank holiday in both France and Germany, meaning bulls may stay at home.
The DAX 30, Europe’s proxy, added furiously to its value after the IFO economic data yesterday. However, the index could not hold above the 12700 level.
This morning, the index has eased further, shedding 0.1% of its gains.
On the other hand, the CAC 40 is still inspired by the IFO economic data, which showed an expansion not seen since 1991.
Currencies
Dollar
The impact of the Federal Reserve’s meeting minutes can be seen in markets. The minutes showed the Fed would gradually raise rates and wind down its $4.5 trillion-dollar balance sheet. No new information was afforded to investors in the minutes and nothing was given to dissuade investors that the Fed will raise rates at a very slow pace.
This has put pressure on the dollar, lowering it 0.3% and pushing it close to Monday’s low.
Euro
The euro is inching higher as investors warm to the trading bloc’s healthy economic data and political backdrop, up 0.06% against the dollar.
GBP
Sterling is down 0.1% against its US counterpart. The UK’s second estimate GDP was worse than expected. The reading came in at 0.2%, forecasted to be 0.3%. The data showed that the UK’s growth is not as robust as previously thought.
GBPUSD
JPY
The Japanese yen is 0.34% weaker against the dollar as perceived risk in the market subsides. There might be more bearish movements towards the support level of $110.95.
Cryptocurrencies
Bitcoin
Bitcoin is near double the price of gold. The digital asset is making new all-time highs, flirting with the next psychological level of $2600. The biggest bullish investors are the Japanese. Japan is set to stop applying consumption taxes on cryptocurrencies in July, underpinning the recent rally.
Ethereum
Ethereum is up over 2300% this year. This cryptocurrency has been backed by huge corporations such as Microsoft (NASDAQ:MSFT) and JPMorgan (NYSE:JPM), giving it a bona fide edge which Bitcoin is lacking.