Over the weekend, Traders mainly focused on two stories developing within the financial trading markets. The first was definitely the prices of crude and Brent oil which significantly declined, crude oil prices declined to below $80 per barrel for the first time since Sept. 30, 2022. This is something we will look at in more detail below.
US dollar and stocks
The second story was the US dollar again increasing in value. This morning the price of the US dollar Index increased by 0.54%, and the Dollar has increased against all main currencies. The currency initially declined after lower-than-expected inflation figures, which resulted in the markets pricing in a 50 basis point hike, not 75 bps.
However, over the past week, the Fed has reassured markets that the regulator will remain restrictive and that inflation is still too high. The committee also confirmed they would not consider a "break" in hikes nor pivot any time soon.
Tomorrow will be an important day for the US dollar and also US Stocks. The Federal Reserve has over four speeches scheduled for members of the FOMC, which determine the next rate hike.
This includes speeches from Mester, George, and Bullard, and any comments or signals provided can influence the price movement. The price of US Indices has so far maintained previous gains, regardless of the appreciating Dollar. Only some indices, such as the Nasdaq 100, have formed a minor retracement.
Cryptocurrencies
This morning, cryptocurrency traders are still fixed on the market's price action. The price of Bitcoin this morning is again declining and has dropped below $16,000 for the first time since November 2020.
The market share in Bitcoin has slightly increased, but the overall market capitalization has continued to decline. The price of Bitcoin has declined by 1.70% and Ethereum by 1.65% during this morning's Asian Session.
Crude oil
Crude oil has seen a considerable decline, which may be negative for buyers but is positive for the overall economic condition, inflation, stocks, and all citizens. Traders are evaluating the decline and considering whether OPEC will allow the price to decline to $70. OPEC has repeatedly made public its objective of keeping oil prices at an $80 minimum.
The price this morning is currently moving within a retracement and has formed a double top. If the double top does not gain momentum to a "higher high," it would further indicate a downward trend. The price is currently moving below most averages, confirming the downward trend. However, traders should monitor that the price does not spike upwards to change the current valid indications.
The price of crude oil is mainly influenced by news coming out of China. China has seen an increase in COVID-19 cases and its first death in 6-months. Some cities have already advised citizens to try to remain indoors, but investors fear the situation may develop into another city-wide lockdown. Lockdowns and restrictions significantly lower demand, especially in China, the largest importer.
The news from China is the main reason for the decline, but the rise in the US dollar and general high monetary policy also pressure the price. However, investors should be cautious of the OPEC meeting in the first week of December, which may aim to upset the trend.
Investors will be interested to see if OPEC chooses to cut its production targets again. This would lower supply and potentially support prices once again. Lastly, investors would be interested to hear the cartel's demand expectations for the next quarter.