Análisis de mercado diario

There’s a lot going on in the markets at present as traders and investors try and get their heads round the various competing forces. Brent crude is rising for a sixth straight day and is making three-year highs through $80. The global energy crisis is a key focus which may only get worse as we head into winter.

Demand is outstripping supply as the gas crunch spreads around the globe, propelling prices to new parabolic peaks. The lack of natural gas is forcing a switch to oil as an alternative for power generation. The global economic recovery is also seeing more demand in general, with a pickup in airline traffic depleting low oil inventories.

Brent crude has surged past the year-to-date high made in July at $77.46. The May 2018 top sits at $80.47 ahead of the October 2018 mark at $86.60. Prices are overbought on the daily RSI and have cut through the upper band of the Keltner channel so a pullback may be in order soon.

Bond yields ripping higher, fuelling the dollar

Having seemingly not paid too much attention to the Fed’s hawkish shift last week, markets are hitting bond markets hard, which means yields are flying north. The widely watched 10-year US Treasury yields hit 1.51% and the shorter end five-year yield touched levels last seen in February 2020.

Notably, this is pushing USD/JPY higher, with JPY also suffering as a large energy importer.

Buyers took out the August high yesterday at 110.80 and now have their eyes on this year’s top at 111.659. A break through here could see a push towards 112.25.

The dollar looks to now be breaking higher on the DXY, with the year-to-date high at 93.72 now within sight. EUR/USD is similarly looking towards major levels, with 1.16639 key support. The energy crisis and shortages mean the backdrop is fragile which is also helping the greenback.

ECB Sintra symposium

The ECB conference at Sintra kicks off today. This has delivered some historic shifts in ECB policy in the past – recall President Mario Draghi’s uber dovish comments in 2019.

Nothing of that magnitude is expected this week but eurozone inflation numbers at 13-year highs released on Friday should sharpen the minds, or at least the hawks’ talons.

Does the ECB still view inflation as “transitory”? And will we get any hints on how the emergency bond buying programme (PEPP) will end next March?

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Stock markets enjoyed the bump in energy prices yesterday with the S&P500 posting its biggest daily gain since the end of August. The energy sector itself surged nearly 4% while oil continued its march higher for a fourth straight day with Brent crude above $75.

There was much chatter about energy prices in general as gas and electricity prices jumped amid a looming and unfolding European energy crisis. For what it’s worth, natural gas futures eventually finished the day some 7.5% higher.

Prices in Europe have hit record highs with the continent set to enter winter with inventories well below the five-year average. This narrative potentially has more to run with the potential for blackouts in the UK and prices remaining elevated until next year.

Oil enjoying its run

Stocks and bond markets didn’t flinch with rising energy prices, which tells us that traders are currently viewing this as reflationary rather than stagflationary.

Brent crude moved above $75 for the first time since the end of July.

This was helped by the larger-than -expected drawdown in US crude oil stocks yesterday.

On the charts, Brent staged an impressive two-day rebound towards the end of last month. This took prices back to the 50% retrace level of the summer high to low move. Over recent weeks, prices have tracked sideways in a bullish continuation pattern. But Monday saw a breakout and the data yesterday drove prices above $75. The mid-July high at $76.22 is now within touching distance and the July top sits at $77.46. Support comes in around $73.73, the top of the recent range.

USD moping around 92.50

We get US weekly jobless claims data and retail sales this afternoon. The former is expected to grind to a new pandemic low. August retail sales may show another fall for a second month with analysts forecasting a print of -0.8%. The rotation into services and Delta concerns are weighing, as the boost from stimulus checks and the re-opening of the economy fades.

The dollar is struggling to find a strong sense of direction as the weak NFP and CPI data dent Fed expectations.

That means the world’s most important central bank can take its time tapering, which would typically boost the dollar.

Meanwhile continued concerns about the Delta impact are keeping buyers interested. Covid variants are also having an influence on global rebound prospects which has been underscored this week by China’s softening recent activity data.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

Riskier assets are attempting a comeback, just hours before the US election polls are set to open.

Benchmark US stock indices kicked off the week with gains, while Asian stocks are extending their advances on Tuesday. US equity futures are also pushing higher at the time of writing, trying to reclaim some ground after last week’s bruising selloff.

The S&P 500 is historically a reliable guide in predicting the winning political party. Should this benchmark stock index post a positive performance from July 31st until the even of polling day, that typically precedes a win for the incumbent. This trend has proven true in all but one of the last nine US presidential elections.

Following Monday’s rebound, the S&P 500 now has a 1.2 percent advance since July 31, 2020. If this trend proves right once more, it indicates a win for the incumbent, President Donald Trump, and would prove the S&P 500 to be a more reliable forecaster than the national polls which have Joe Biden in the lead.

Of note, Monday’s climb in the S&P 500 were led by energy stocks such as ExxonMobil and Chevron, as Big Oil stocks tracked the overnight gains in global oil benchmarks.

SOURCE: Bloomberg

Oil prices rose on Monday, as investors mulled signs that OPEC+ may delay their intended easing of output cuts in January. Still, Oil remains suppressed by a global economic recovery that has been hampered by the reinstated lockdowns across major European countries, while the US continues to see stubbornly elevated Covid-19 cases. The rising output from Libya is also stoking oversupply concerns.

At the time of writing, Crude Oil is paring some of Monday’s gains while battling with its 200-day simple moving average as a resistance level. Oil’s downtrend from the past two months is still very much intact despite Monday’s gains.

Overall, there’s no escaping the fact that the US election will be the primary guide over market sentiment for the near-term. However, given that the official results may not be known for another few days, or potentially even weeks after polls close on November 3rd, investors are expected to remain patient in the interim, even as they crave immediate certainty over the US political outlook.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.