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Trading tips week 34 - technical analysis: Kim

James Kim, sales trader at Saxo Capital Markets, Australia, examines trading strategies during week 34 in a technical analysis of charts for forex, indices and commodities.

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Article / 11 October 2016 at 7:00 GMT

Morning Markets: Russia agrees to Opec deal, Brent hits one-year high

Michael S. McKenna

Editor / Saxo Bank

Denmark

Morning Markets: Prices

Watchlist

ZEW Economic Sentiment (0900 GMT)
US: Small Business Optimism Index (1000 GMT)
US: Labor Market Conditions Index (1400 GMT)

Crude oil prices surged overnight as Russian president Vladimir Putin, speaking at the energy conference in Istanbul last night, told his audience that Russia is prepared to join the Opec production cap deal, and urged other oil-producing nations to sign on as well.

Prices rocketed to a one-year high in Brent and a four-month high in WTI with the former peaking just shy of $54/barrel and the latter breaching $51.50/b.

A new report from Goldman Sachs, however, warns against excessive investior jubilation on the news, stating that "an agreement to cut production, while increasingly likely, remains premature given the high supply uncertainty in 2017 and would prove self-defeating if it were to target sustainably higher oil prices".

Elsewhere, London lost another HQ as Russian state-controlled bank VTB announced plans to move its European HQ to Paris, Frankfurt, or Vienna due to the Brexit vote. In New Zealand, the country's central bank was out stating that "further policy easing will be needed" to hit inflation targets, sending the kiwi lower versus AUD and USD.

Today's focus is likely to be on the USD after several forecasters, including Goldman Sachs, have raised their odds of a 2016 hike despite last night's less-hawkish talk from Chicago fed chief Charles Evans.

Market signals

Asian session

Saudi Arabia and Russia said they're ready to cooperate to limit oil output
Oil prices surged to a one-year high overnight on the news
Iron ore jumped back above $55
Asian shares were mixed with Samsung in focus after Galaxy Note 7 problems
Samsung shares dropped a further 7% today on Note 7 issues
South Korea's Kospi opened down 0.07%; the Nikkei was up 0.77%
The Australian market rose early, led by energy stocks and closed 4 points higher
Lending to Aussie housing investors grew 0.1% in August, its slowest in four months
Japan posted a current account surplus of ¥2 trillion, up 23% for the year and beating forecasts

Forex ahead

AUDUSD rallied on the oil surge, lifting above 0.76 in early trading
US dollar continues to show strength overnight
GBPUSD largely flat below 1.2325 following protracted selloff
NZD loses about 30 pips versus the dollar on rate cut talk from the RBNZ

From the Floor

Fed up. "Goldman Sachs are calling the likelihood of a Fed hike at 75%," says Moltke-Leth

Dollar ready to run. "The dollar is spreading its wings here," says Hardy

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

1..2..3
Germany's ZEW economic sentiment survey is on track for a rise that will equate with relatively soft growth for Europe’s biggest economy, explains James Picerno.

BHP bounce
The oil surge overnight greased energy stocks and the Australian market got an early lift, writes the team at Saxo Capital Markets (Australia).

Problem plunge
Asian shares opened mixed with Samsung Electronics in focus after the stock plunged following its latest problems, says Saxo's Singapore trading team.

Volatility to return?

Much has been said about the US election's ability to rile up asset markets, but the US earnings season – and particularly a soft one – could see volatility return as well says Georgio Stoev.

Istanbul

Deal on: The oil summit in Istanbul played host to a surprise announcement

from Russia last night, boosting Brent crude to a one-year high. Photo: iStock

Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
Click here to make sure you're up to date with the latest developments

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