News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Get your basics right. Find out what is stock market volatility and how you can trade It here:https://t.co/pK95WaqA3j https://t.co/sLMza2wKYd
  • The Japanese Yen continues to be pummeled against most major currencies. Get your weekly Japanese Yen forecast from @HathornSabin here: https://t.co/WY5rcoqNP2 https://t.co/JT8yOUgceA
  • The US Dollar paused its advance against ASEAN currencies. USD/SGD eyes a key trendline, USD/THB risks stalling, USD/PHP enters consolidation as USD/IDR continues ranging. Get your market update from @ddubrovskyFX here:https://t.co/Hd4mu0MKkp https://t.co/1kOgueJOXz
  • The economic calendar has its top listings (China GDP among them), but traders would do well to keep tabs on themes like the Fed outlook, an imminent Bitcoin record and lurking China contagion. What I'm watching for next week: https://www.dailyfx.com/forex/video/daily_news_report/2021/10/16/Dollar-Deals-with-Tight-Fed-Outlook-Bitcoin-Eyes-Record-Energy-Crisis-Worries-Continue.html https://t.co/LrlZXmF8jK
  • Crude oil and coal prices hit fresh levels overnight as supply issues threaten to worsen an already fragile energy situation. Asia is particularly susceptible after regional flooding shuttered coal mine operations. Get your market update here:https://t.co/tgIsootO7y https://t.co/2RlYVgawgf
  • The Japanese Yen has moved lower across the board and is making multi-year lows against the USD. Will it snap the range, and do the same against EUR? Get your market here:https://t.co/tQYc6cPuM0 https://t.co/YDEELagtTb
  • The British Pound has bounced off its low against USD while it’s trapped in wide ranges against the EUR and CHF. How long will GBP be tied to its Continental Europe constituents? Find out here:https://t.co/xs3EMWWIom https://t.co/aHXoGbOBKq
  • (Weekly Fundy) Australian Dollar Outlook: AUD/USD Back on the Offensive as Covid Restrictions Ease #AUD $AUDUSD #Covid https://www.dailyfx.com/forex/fundamental/forecast/weekly/aud/2021/10/16/Australian-Dollar-Outlook-AUDUSD-Back-on-the-Offensive-as-Covid-Restrictions-Ease.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/sGSPXKQyne
  • The Australian Dollar is seemingly back on the offensive as lockdowns ease in Sydney and Melbourne. Improving sentiment may allow AUD/USD to capitalize on rising equities and commodity prices. Get your weekly $AUD forecast from @ddubrovskyFX here: https://t.co/JDhqHY9OW1 https://t.co/JyLUT4cNnF
  • The Dow Jones and S&P 500 appear to be vulnerable as retail traders continue to buy into their pullbacks. This is shown via IGCS, which is typically a contrarian indicator. Get your market update from @ddubrovskyFX here:https://t.co/DsbgWvDNP6 https://t.co/xZpbBYE7Dc
Crude Oil Prices May Fall on Rising Virus Cases. Growth Outlook at Risk?

Crude Oil Prices May Fall on Rising Virus Cases. Growth Outlook at Risk?

Dimitri Zabelin, Analyst
Crude Oil WTI Price chart

Source: IG Charts

OUTLOOK: BEARISH

  • Crude oil prices may retrace gains if coronavirus cases grow, impeding growth prospects
  • Powell, Mnuchin testimonies and FOMC minutes may cast a dark, deep bearish shadow
  • Tension in Hong Kong, China’s national security bills may spark protests, hurt crude oil

Rising Coronavirus Cases in US Threaten to Derail Fragile Recovery

Crude oil prices may be at risk if the growth outlook from the world’s largest economy is put into doubt at a time when acute uncertainty is embedded in every sector of the global economy. Texas has seen an unusually high number of Covid-19 cases with reports indicating the number of Intensive Care Units (ICUs) are almost maxed out, particularly in the Houston area.

US Witnessing Surge in Coronavirus Cases

US Virus cases

Data was retrieved on June 25 at 23:00 GMT. Figures since then will likely have shifted.

While unemployment figures continue to surge, optimism about a relatively faster recovery has boosted risk appetite and pushed cycle-sensitive assets like crude oil higher. Aggressive easing measures by central banks all over the world and the deployment of a plethora of credit facilities and unorthodox policy measures like quantitative easing has also been a major contributing factor in buttressing risk appetite.

Economic Data Performing Better Than Expectations, Helping to Push Crude Oil Prices Higher

Citi econ surprise index

Source: Bloomberg

Initial jobless and continuing claims data will be released this week in addition to closely-scrutinized nonfarm-payroll data. A worse-than-expected reading there could put a sour taste in the mouths of investors who were hoping to find sweeter figures to reinforce their bullish narratives. Consequently, a disappointment there could sink demand for crude oil, a notoriously cycle-sensitive commodity.

Brent Eyes FOMC Minutes, Powell & Mnuchin Testimonies

Crude oil prices may also get a shock from the release of the Federal Open Market Committee’s (FOMC) minutes, following the interest rate decision earlier this month. An doubtful tone in the text about the prospect of a recovery could cast a dark, deep shadow over crude oil prices. Treasury Secretary Steven Mnuchin and Fed Chairman Jerome Powell will also be testifying in front of the House Financial Services Committee.

Commentary here could also elicit volatility, but for traders it gives them an opportunity to hear from key policymakers and what they are watching. Mr. Powell has in recent times stressed that medical metrics are the most important indicator to monitor because of how political, fiscal and monetary policy are crafted based on prevailing public health trends.

In addition, the Chairman has warned that the uncertain circumstances means data reports may show sporadic developments, thereby increasing the chance of higher bouts of volatility. An example of this was the recent publication of jobs data that showed the economy added over two million jobs. More realistically, the US had reclaimed those jobs and still has a multi-million, unemployed-persons hole to fill.

Hong Kong Tension May Pressure Crude Oil Again

Reignited tension in Hong Kong amid the coronavirus pandemic could worsen the growth outlook and further widen the geopolitical rift between China and the US over the autonomous region. As the IMF wrote: “Geopolitical tensions or broadening social unrest in response to rising global inequality could lead to a reversal in investor sentiment”.

Stay up to date on geopolitical shocks affecting markets by following me on Twitter @ZabelinDimitri

Crude Oil (Brent and WTI), Hang Seng Index

Crude Oil versus Hang Seng Index

Crude oil chart created using TradingView

Escalation here could in-turn spoil risk appetite and push crude oil prices lower along with regional equity markets. The Chief Executive of Hong Kong, Carrie Lam, will be giving a speech this week three days after lawmakers in China’s National People’s Congress would have concluded an intense round of meetings regarding national security laws in the Special Administrative Region.

--- Written by Dimitri Zabelin, Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES