Tension on the oil market

By 23/04/2019News

23.04.2019 – Daily Report. It seems like, the brokers in Frankfurt are taking it easy after Easter. New impulses should come from some economic data and the US balance sheet season. The situation on the oil market is far more interesting: There, the US administration has slightly shocked investors with the deletion of the last exceptions to the Iran sanctions. This could also torpedo the negotiations between China and the USA in the customs dispute – and thus bring the stock markets to their knees.

Waiting in Frankfurt

News was thin on the ground on the German stock exchange, just as it was in global trading. The DAX, for example, crumbled slightly at the start of the new trading week, and the index was just under 12,200 points in the morning. Investors first took profits; The DAX had risen to its highest level for six months on Maundy Thursday in the course of trading; the leading index ended the day around half a percent firmer at 12,222 points. On Tuesday, investors once again focused their attention on the Wirecard share, which at times slumped by around 7 percent after the end of the short-selling ban. The financial supervisory authority Bafin had issued the ban for two months as a precautionary measure against short attacks.

Iran sanctions versus China deal

The biggest activity was in the energy market – volatility seems to be pre-programmed in the coming weeks, which will not shock professional CFD traders. The White House surprised investors on Easter Monday with the announcement that the last exceptions to the oil sanctions against Iran would expire on May 1st. After US Secretary of State Mike Pompeo’s press conference, oil prices rose to a six-month high. Many investors had expected the special arrangements to be extended. The market already seems tense to many traders anyway, as supply shortfalls in the crisis countries Venezuela and Libya are already scarce.
In May last year, the US allowed eight countries to continue importing Iranian oil to a limited extent – including China and India, which are still buying crude in Iran. And this is a link to the stock market: Wall Street is not the only one hoping for a deal in the customs dispute between the People’s Republic of China and the USA. The negotiations could be jeopardized by the new irritant topic of Iran oil.

How will OPEC react?

US President Donald Trump wants to force the mullah regime to stop its nuclear weapons program, stop missile testing and stop supporting terrorist groups in the Middle East. The Iranian gap is to be closed by Saudi Arabia and other OPEC countries, the president twittered. Trump also explained that he expects the oil cartel to abandon its five-month production restrictions. They have pushed up the price of oil this year. Accordingly, the inventory data for the US crude oil stocks of the American Petroleum Institute (API), which will be received today at 22.30 hrs, will become particularly important.

Asian stock markets without a clear trend

Against the background of the Iran sanctions, the Asian stock markets were restrained, especially as the balance sheet season also begins there. There was also speculation on the Chinese floor about a reduction in government stimulus packages. For example, the Chinese CSI 300 closed 0.2 percent lower at 4,019 points, while the Nikkei rose by a moderate 0.2 percent to 22,260 positions.

Wall Street listless

The oil price and bad data from the real estate market had also slowed down investors on Wall Street on Easter Monday. With an extremely low volume, the Dow Jones Industrial slipped by around 0.2 percent to 26,511 points. The S&P 500 recorded a moderate gain of 0.1 percent to 2908 positions, while the Nasdaq 100 gained 0.3 percent to 7714 points. Data on the start of construction and building permits for March had already been announced on Friday, and were worse than expected. On Monday, sales of existing real estate in March were also below forecasts.

This is what the day brings

Once again new data on the US real estate market will arrive today at 16:00, then the new buildings sold will be reported for March in the United States.
At the same time, the consumer confidence index in the Euro-Zone is ticking in April.
Meanwhile, the US balance season continues: Coca-Cola is to present figures before 1 p.m. German time, including Procter & Gamble and Verizon. The balance sheets of Texas Instruments and Ebay are expected after the close of trading.
We are curious to see how Wall Street, DAX and co. react and wish you successful trades with Germany’s best CFD brokers!

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