Crude Oil Prices Rebound as Iran Rejects US Claims - US Market Open
MARKET DEVELOPMENT – Crude Oil Prices Rebound as Iran Rejects US Claims
Crude Oil: Yesterday’s double whammy of Trump talking up further tariffs on Chinese goods and Secretary of State Pompeo noting that Iran were ready to talk had sent oil prices tumbling. However, Iran had later rebuffed reports that they were willing to talk to the US. Consequently, crude oil futures have rebounded with technical support from $64.16 also underpinning Brent crude prices (38.2% Fib level from 2018 peak to 2018 low). Elsewhere, focus is on the DoE crude oil report following yesterday’s API crude drawdown.
GBP: The Pound is relatively flat having recovered from its brief dip below 1.24. Brexit uncertainty continues to weigh on GBP with option players beginning to price in Brexit risks as 3M implied volatility rises. On the data front, UK inflation remained at 2%, which had been in-line with analyst forecasts, while core-inflation saw a marginal rise to 1.8%. However, with Brexit the dominating theme for UK asset classes, particularly after both Boris Johnson and Jeremy Hunt toughened their stance on the “Irish Backstop”, the data has had little effect in the currency.
EUR: Final readings for Eurozone inflation had been slightly higher than expectations for the headline reading at 1.3%. However, today’s reading is unlikely to deter the ECB from its rhetoric that fresh stimulus measures will be needed in the absence of a material improvement in economic data. That said, support at 1.12 has held firm thus far.
Source: DailyFX, Thomson Reuters
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--- Written by Justin McQueen, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.