Global benchmarks are trading significantly lower as market sentiment has been shattered by the drone attack on two of the biggest Saudi Arabia’s oil fields (Abqaiq and Khurais), run by state-owned company Aramco. The attack had a strong impact across all markets has it removed 5.7M barrel and almost 5% of global oil supply, which caused the biggest intraday jump ever on Brent and WTI (20%). The Tadawul All Shares index in Riyadh dropped by 3.1% and safe haven assets like treasuries, gold, CHF and JPY currencies were being driven higher as the attack highlights the vulnerability of the top oil exporter and brings on rising concerns over potential further geopolitical risks in the region. The case has already gone global after U.S. officials put the blame on Iran.
Photo by Ashkan Forouzani.
Stocks in Asia closed mixed overnight after Chinese data (industrial production + retail sales) missed estimates, adding further pressure to global equities. This week is likely to be a real test to market sentiment after a strong start in September for equity traders as most investors now must take geopolitical risk back into account.
Investors will keep a close eye on tomorrow’s ZEW Economic sentiment in Germany as well as on the FED’s decision this week as Jerome Powell is widely expected to cut rate in reply to a global slowdown and a muted U.S. inflation. For now, the biggest move in Europe has been that of the SMI-20 index in Zurich, where the market broke-out an important technical support at 10,000.0 pts, invalidating the short-term bullish trend. Prices have found support over the 9,952.0pts price level, maintaining a consolidation phase on the market.
While a student, Pierre Veyret had a passion for the financial markets. At the time, he studied International Trade through the setting up of import / export operations and it was the techniques of hedging against exchange rate risks that helped him to make the link with the financial markets, and all especially that of Forex. It is therefore with the aim of anticipating the price of currencies several months in advance that Pierre quickly turned to different methods of analysis by drawing inspiration and surrounding himself with experts in the field. Shortly after, Pierre decided to specialize in Technical Analysis, a discipline he had the opportunity to practice with real market professionals, thanks to AFATE / IFTA, an association of which he has been an active member for several years. Pierre Veyret is passionate about the field of the financial industry with a particular interest in the various techniques of stock market forecasting. Currently, Pierre is based in the City of London where he works as Chief Analyst. He performs regular interventions on a multitude of asset classes through various media (television, internet and print media).
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© 2019 High Leverage FX - All Rights Reserved.