Oil: Saudi Arabia loses control over the prices
Riyadh is working to coordinate efforts to support oil prices, calling to the colleagues in the cartel. The news at the moment, helped Brent to add $1 and reach 57.70. However, soon the slide of course continued. Recall that OPEC+ have recently extended quota, but this did not prevent black gold from falling into bearish territory, to the lowest levels since the beginning of the year.
Saudi Arabia, once the largest manufacturer and importer, the desire to maintain oil prices, repeatedly restricts its own production and production of the allies, while the USA and Russia (until recently) increased its market share. These self-limiting risk to turn a loss impact on the stock, if the share of the Kingdom will continue to melt.
Key global indices on Thursday gained on strong export data from China and stabilize the Renminbi. However, the news that Washington plans to delay the issuance of licenses to trade American companies Huawei sent the indexes to the downside. Hang Seng is losing 0.6%, China A50 – 0.7%, Nikkei225 and futures on the S&P500 are down by 0.4%. Additional alarming signal comes from the foreign exchange market, where there has been a renewed thrust in a quiet Harbor. It is a signal that the appearance of composure, and the markets rebound to mask the increased wariness of other participants.
The Euro: the balance over the abyss
The single currency remains sedentary, trading near 1.1200. However, this fragile balance. Buy Euro are provided with increased traction in defensive assets, as evidenced by record lows the yield of German government bonds. On the other hand, once again come to the forefront of the political events in Italy, where the coalition government was called into question. The news triggered a sell-off of Italian government bonds. Modern history tells us that the apogee of the market fears could be in the future, potentially creating risks for the Euro.
Traditional safe Harbor – JPY, CHF, Gold is gaining strength in the second half of the week, despite the positive dynamics of equity markets. It is a bad sign for the bulls in the stock markets, despite the fact that USDJPY and the USDCHF are situated at some distance from the extrema of Tuesday. In this case, the graph shows that investors continue to buy defense assets – and now it is a trend.
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