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Bullet Report: Why OIL Jumped 5% Yesterday
Today’s financial calendar is thin however focus will be on the ISM non-manufacturing index for August. Yesterday we saw a sharp increase in the UK PMI service index which jumped from 47.6 to 52.9 back to pre-Brexit levels. Overnight, RBA left rates unchanged, which resulted to AUD/USD maintaining this week’s gains.
Currencies: EUR/USD is one of the weakest major currencies this week ahead of the ECB policy decision where expectations as to the announcement of additional stimulus is divided. Overall the USD trimmed some losses against other major currencies in a quiet trading session, although Friday’s bad NFP data, pressured initially the USD. The disappointing data lowered chanced for a near term rate hike, as FED officials indicated that the pace of interest rate increases will depend on data.
Stocks: US stocks were closed on Monday for Labor day. Asian shares traded narrowly with Australia down and Nikkei as well as Shanghai slightly higher at 0.19% and 0.02% respectively.
Oil and Gold: Crude oil jumped yesterday after an announcement from Saudi Arabian and Russia said that they would set up a working group to monitor the oil market and come up with recommendations to promote stability. On Friday, crude settled 3% higher after Russian President Vladimir Putin said that an agreement between major oil exporters to freeze output would be the right decision to support the market. Gold continued to build on its gains ever since touching $1308 Support Level on Friday. In thin holiday trading, gold prices were trading at $1330, up more than $20 since the release of NFP.
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