Risk premium cools off as Norway back on line
· With the timely intervention of the Norwegian govt. the strike by oil workers was called off which had crippled 13% of the country’s oil production and pushed crude prices sharply upwards. The break-through lifts the risks from further supply disruptions on this front as the domestic law prohibits a similar strike of this nature for a period of two years.
· As expected significant selling pressure emerged. Investors went bid on the dollar which pushed both oil grades in the red (Brent -2.3%, WTI -2.4%). Chinese trade data also painted a depressed picture for crude consumption with imports down to 5.3mn bpd in June vs. 6mn bpd in May.
‘Sell-the-rally’ mode keeps upside capped for precious metals
· Precious metals class got a boost in investor interest mid-way during the session as UK Manufacturing Production (+1.2% MoM) surpassed expectations (+0.1% MoM). The intra-day strength could not be sustained and closed in the red as the market remained in a ‘sell-the-rally’ mood with investors capitalizing on higher prices to book profits.
· The Euro was beaten (-0.5% vs. USD) as a German constitutional court began a hearing in order to determine whether proposed changes to the European bailout fund, the ESM, were in sync with German law. Adverse rulings could likely create more havoc.
· At the meeting of EU finance ministers yesterday, some headway in talks was made on the issue of recapitalization of Spanish banks. While the total figure has yet to be finalized, an estimated €30bn is expected to be available for use before the end of July.
· Later today, a spike in volatility is on the cards as the market awaits FOMC meeting minutes where the diverse opinions of policy makers will be absorbed. Any signs of firm consensus however could be construed as a positive sign and would raise the possibility that the Fed would be quick to take stimulus action if indicators weaken in the future.
Technical Strategy
Gold Spot: Sell on Strength
The first support is at US$1,559.47 and second support is at US$1,550.87. The first resistance is at US$1,578.68 and the second resistance is at US$1,587.27.
Silver Spot: Sell on Strength
The first support is at US$26.45 and second support at US$26.07. The first resistance is at US$27.17 and the second resistance is at US$27.53.
WTI Spot (Crude Oil): Sell on Strength
The first support is at US$83.04 and second support is at US$82.17. The first resistance is at US$84.78 and the second resistance is at US$85.65.
No comments:
Post a Comment