something interesting

<  BACK TO Market Analysis

Critical information for the U.S. trading day

Is oil getting ready to surprise investors?

The waiting game over just what economic and other plans POTUS has up his sleeve has been slowing this stock market to a painful crawl.

Of course, some will tell you all that uncertainty may eventually be good for stocks. But while we’re waiting for President Donald Trump to get stock investors excited, or really scared, it’s worth keeping an eye on other assets, which have triggered volatility for equities in the past.

That brings us to oil — one asset that should never go ignored by investors too long. Our call of the day comes from Raoul Pal, founder of Global Macro Investor. He says it’s time to buck the big-money trend and short oil, because those who produce the black stuff think the price right now really should be at $30.

Pal’s call comes after the latest weekly Commitment of Traders report from the U.S. Commodity Futures Trading Commission (ending Jan. 17) showed hedge funds and other money managers placed more bullish oil positions than any week since 2006. That’s as actual producers upped their short hedges to the highest level since 2007, in a bid to lock in higher prices. (Check out chart of the day in Monday’s Need to Know)

No one can deny the magnificent rally — roughly 65% — that crude has seen over the past 12 months. But cheers over the post-OPEC output-cut deal are dying down as U.S. shale producers seem ready to pick up the slack. Analysts at Bank of America Merrill Lynch are warning that oil prices in local currencies are nearing 2014 levels, and that could cut into emerging-market demand growth.

Protectionist policies from Trump and the U.K. could also hold back global trade, and hence curb oil demand, those analysts say.

Then there’s the expectation by some that Trump will introduce measures to support the U.S. oil and gas industry, and wean the country off foreign suppliers. Rising U.S. supply, of course, will lean on prices in the coming month, Commerzbank told clients, adding: “In view of the record-high optimism exhibited by speculative financial investors, we see a risk of falling prices.”

The dollar DXY, +0.05% tumbled, then recovered, on comments from Trump’s Treasury pick Steven Mnuchin. The British pound GBPUSD, -0.0639%  fell after the U.K. Supreme Court said Prime Minister Theresa May needs to consult lawmakers before beginning the Brexit.

Gold GCG7, -0.66%  finished lower, and oil prices US:CLG7

European SXXP, +0.25%  markets are up, and Asia equities ADOW, +0.30%  ended broadly higher even after the U.S. pulled out of the Trans-Pacific Partnership.

Investors shouldn’t completely shun bonds right now, says Glenmede’s director of investment strategy, Jason Pride.

“Investors may get the urge to sell bonds in this environment, but shouldn’t give up on the asset class as they provide a good counterbalance during equity market selloffs,” Prides says in a weekly note.

But not just any old bonds, says Pride: “When rates are low and yield is scarce, investors should employ for a portion of their allocation a more opportunistic strategy that is not constrained to investing in the traditional fixed income securities that carry low yield and higher interest rate sensitivity.”

Source: marketwatch.com

Critical information for the U.S. trading day

Is oil getting ready to surprise investors?

The waiting game over just what economic and other plans POTUS has up his sleeve has been slowing this stock market to a painful crawl.

Of course, some will tell you all that uncertainty may eventually be good for stocks. But while we’re waiting for President Donald Trump to get stock investors excited, or really scared, it’s worth keeping an eye on other assets, which have triggered volatility for equities in the past.

That brings us to oil — one asset that should never go ignored by investors too long. Our call of the day comes from Raoul Pal, founder of Global Macro Investor. He says it’s time to buck the big-money trend and short oil, because those who produce the black stuff think the price right now really should be at $30.

Pal’s call comes after the latest weekly Commitment of Traders report from the U.S. Commodity Futures Trading Commission (ending Jan. 17) showed hedge funds and other money managers placed more bullish oil positions than any week since 2006. That’s as actual producers upped their short hedges to the highest level since 2007, in a bid to lock in higher prices. (Check out chart of the day in Monday’s Need to Know)

No one can deny the magnificent rally — roughly 65% — that crude has seen over the past 12 months. But cheers over the post-OPEC output-cut deal are dying down as U.S. shale producers seem ready to pick up the slack. Analysts at Bank of America Merrill Lynch are warning that oil prices in local currencies are nearing 2014 levels, and that could cut into emerging-market demand growth.

Protectionist policies from Trump and the U.K. could also hold back global trade, and hence curb oil demand, those analysts say.

Then there’s the expectation by some that Trump will introduce measures to support the U.S. oil and gas industry, and wean the country off foreign suppliers. Rising U.S. supply, of course, will lean on prices in the coming month, Commerzbank told clients, adding: “In view of the record-high optimism exhibited by speculative financial investors, we see a risk of falling prices.”

The dollar DXY, +0.05% tumbled, then recovered, on comments from Trump’s Treasury pick Steven Mnuchin. The British pound GBPUSD, -0.0639%  fell after the U.K. Supreme Court said Prime Minister Theresa May needs to consult lawmakers before beginning the Brexit.

Gold GCG7, -0.66%  finished lower, and oil prices US:CLG7

European SXXP, +0.25%  markets are up, and Asia equities ADOW, +0.30%  ended broadly higher even after the U.S. pulled out of the Trans-Pacific Partnership.

Investors shouldn’t completely shun bonds right now, says Glenmede’s director of investment strategy, Jason Pride.

“Investors may get the urge to sell bonds in this environment, but shouldn’t give up on the asset class as they provide a good counterbalance during equity market selloffs,” Prides says in a weekly note.

But not just any old bonds, says Pride: “When rates are low and yield is scarce, investors should employ for a portion of their allocation a more opportunistic strategy that is not constrained to investing in the traditional fixed income securities that carry low yield and higher interest rate sensitivity.”

Source: marketwatch.com

lastest Articles

Market Analysis
USD/JPY moves back closer to multi-month tops, around 109.25-30 region
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoE to deliver a 25bps cut in January 2020 – Danske Bank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Tension toward Trump's trade comments, boost for Boris holds up, data eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD clings to gains around 1.1020
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold recovers from 3-month lows, up little around $1465 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Trump's trade pessimism pressures markets, Spain stuck again, UK GDP set to rise
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead - Trade war, UK, RBNZ, Banxico, Spain
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
RBA is not complacent about AUD remaining weak – Westpac
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB Economic Bulletin: Moderate but positive growth in H2
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Company News
FXSniper PAMM - The New GEM at FXPIG
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold ticks higher, lacks follow-through
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD now risks a move to 1.1000 – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Chinese tariff demands may break trade talks, USD marches forward, Fed speakers eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
OPEC: Raises mid-term outlook for non-OPEC Oil supply growth
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD upside loses momentum
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Asia: PMIs pull back – TDS
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB: Focus on Lagarde’s speech
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoE to leave the policy rate unchanged – Rabobank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Markets have reasons for a happy Monday, Boris Johnson remains in the lead, Lagarde eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Week Ahead – RBA and BOE Decisions in focus as UK election campaigns begin
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD trims gains and recedes to 1.1150 ahead of NFP
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
The Fed moves into a ‘wait-and-see’ mode
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar defeated ahead of Non-Farm Payrolls, Chinese data cheers markets
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD unchanged near 1.1170 post-EMU data
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOMC and BoJ meetings should have supported USD/JPY – Westpac
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar depressed after the Fed, trade talks accelerate, and another busy data day awaits
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOMC Preview: What 11 major banks are expecting from October
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD could still visit the 1.1180 region
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Company News
Time to fall back
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Super Wednesday features the Fed, US GDP, and lots more as Brits brace for "jingle polls"
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Further upside in EUR/USD lost traction
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoC likely to leave the policy rate unchanged – Rabobank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Trump's trade hope lifts markets, Boris brings elections to parliament, Bitcoin bruised by Chinese warning
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Brexit, FOMC meeting amongst market movers this week – Danske Bank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold consolidates in a range, just above $1500 mark
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Technical Analysis: recovery could extend to the 100-day SMA at 1.1128
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Week Ahead – Brexit, Fed, BoC, BoJ and Earnings
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Brexit: EU to extend Brexit deadline without a date - Reuters
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold climbs to fresh two-week tops, above $1505 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOMC: Still no pre-commitment to more easing
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB meeting to be a relatively uneventful policy-wise
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Brexit in the EU's hands, EUR/USD may struggle with Draghi one last time, Bitcoin battered
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB: Draghi’s last Governing Council meeting – Deutsche Bank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EU's Tusk: Will react to Brexit delay request in the coming days
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: Steady trading – Commerzbank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Critical vote on Brexit, mixed messages on trade talks, Trudeau returned as Canadian PM
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD could test the 1.1200 region near term – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Breaking: GBP/USD breaks above 1.30 as DUP rejects customs union amendment to the Brexit deal
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Boris and sterling brace for more Brexit drama, some stability in trade, and Canada votes
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Brexit Optimism Rises Despite Parliament Obstacle
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/JPY upside could be losing momentum – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD now looks to a test of 1.1165 – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Speculation about the Brexit vote, assessing Chinese mixed figures, and the Fed's last rate hint
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB speakers advocated fiscal easing – Deutsche Bank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Technical Analysis: The up move faltered just ahead of the 100-day SMA near 1.1140
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD: Slight consolidation here
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Brexit talks drag on as key UK PM Johnson ally threatens hold-out – Bloomberg
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD still targets 1.1100 and above – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Boris on the brink of a Brexit deal, trade concerns reemerge, US Retail Sales eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
China: Widening divergence between CPI and PPI – ANZ
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
When is the UK jobs report and how could it affect GBP/USD?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD drops to session lows near 1.1010 ahead of ZEW
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Focus shifts to Brexit, IMF’s WEO, Earnings Season, and Chinese data
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/JPY technical analysis: Intraday positive move stalls near descending trend-channel resistance
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Breaking: EUR/USD breaks above 1.10 amid trade hopes – two week highs
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EU Official: Eurozone budget should be around EUR 17 bln
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold holds steady in a range, just below $1510 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
US: Surprise upside in Producer Prices – TD Securities
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD locked in a tight range and ready to explode, more likely to the downside – Confluence Detector
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD may recover as support is stronger than resistance — Confluence Detector
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD is approaching the 4 month downtrend – Commerzbank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Markets see glass half full in trade, Boris bracing collapse in talks, and Powell's speech eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
JPY Futures: cautiously neutral near term
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Scope for EUR/USD to test 1.10 in the near term – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: China limits scope for talks, EU skeptical on Brexit, and Trump's troubles mount
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Dollar on Backfoot as US Data Disappoints
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
US: Non-Farm Payrolls seen increasing by 125k in September - Nomura
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
AUD brushes off equity turmoil – Westpac
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
China's Yuan to refresh decade lows as trade war drags on - Reuters poll
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/JPY Technical Analysis: Remains under pressure around 4-week lows
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
US: NFP likely to gain 150k in September – TD Securities
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Technical Analysis: Targets the 21-day SMA at 1.1000 in the near term
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: On reversal watch – Commerzbank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD stays below 1.23 after UK Sept Manufacturing PMI rebounds to 48.3
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Fed’s Evans: US monetary policy needed some "repositioning" to align against risks
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold: Recent Mid-East flare up adds to upside risks – ING
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BOJ’s Kuroda: Downside risks in global economy heightening
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD eyes 1.0890 as the next downside target – Confluence Detector
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD remains offered around 1.10, looks to ECB-speak
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD: Easing back – Commerzbank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold trades with modest losses, just below $1530 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
UK: Further political uncertainty – Rabobank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold sits near 2-week tops, just above $1520 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD attempts a recovery post-IFO, still below 1.10
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
U.K. companies for sale — at a 13% discount
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Trump is not in a hurry - Rabobank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD comes under pressure and breaches 1.10 on PMIs
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREX Week Ahead: Markets remain focused on geopolitical risks
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold climbs further beyond $1500 mark, lacks follow-through
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BOE prepares the ground
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613