Gold 1658,05
|
EURUSD 1,1357
|
DJIA 24692,50
|
OIL.WTI 33,47
|
DAX 10358,40
|
|---|
Here comes another black Monday. All world indices lost 3 to 10 percent in one trading day. This day will be recorded as the beginning of the next crisis, which appeared only because of the boom in social networks, inflating information about the flu, as well as the collapse of stock markets and the oil market to its lowest values in a long time.
EUR/USD chart of the day
What’s going to happen next? The markets have sagged very hard and some kind of driver is needed at least to stop this free fall. One of these drivers could be some positive information from the oil market. So far we have not seen any breakthrough in the decision to limit production and it is very likely that nothing will change in the near future. The markets will find the bottom somewhere in any case, and this will be another starting point for growth.
Euro
Due to soft monetary policy, the U.S. dollar is sliding against all currencies. The bulls on the euro showed its strength and took the currency out of the descending channel. Of course, such a strong growth should be accompanied by at least some minimal correction, but in the current situation it is not clear when it will start. The Euro is aiming at 1.16 and if the markets keep getting feverish, it is likely that we will come to test this area soon.
OIL
At the opening of trading on Monday, we saw one of the most dramatic oil falls since the Gulf War. Brent oil lost almost 30% of its value and by the end of the day was able to win back just over 8%. Brent is now trading at $35 per barrel. At the moment, the cost of oil, as one of the main energy resources is laid in the cost of almost any product that is produced in the world. A significant price reduction will affect literally all spheres of the global economy. Shale oil developers in the USA will suffer first, although this will not begin until six months later, because in most cases the credit money given to them to develop the fields is hedged in case of such situations.
GOLD
Against the background of a free fall in world markets, gold touched the level of $1700 per ounce and slightly bounced back. As we predicted earlier, this level is not the limit for gold, as panic in the markets has just begun to intensify. Demand for the metal may rise in just a few days and drive the price to historical highs. On Monday, gold trades at $1675 per ounce.
What is waiting for us today?
02.30 Consumer Price Index in China
11.00 EU annual GDP
21.30 Weekly crude oil reserves in the USA
Important Notes on This Publication:
The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.