Oil and stock indexes seemed to rise at the start of the week, continuing previous trends.
Oil prices rose about 1 percent on Monday as investors were optimistic about the outlook for energy demand in China, the world's largest oil importer. Official data showed that daily throughput at Chinese refineries rose 15 percent year-on-year in January and February, equivalent to about 14.13 million barrels a day. Meanwhile, the country's industrial output rose 35.1 percent in the first two months of the year, with output in mining, utilities and manufacturing accelerating sharply. Saudi Arabia cut oil shipments for April to at least four North Asian customers by as much as 15 percent. As a result, the barrel of WTI is still above the $65 level, and corrections on the chart look very small. Thus, the strong trend seems to still be sustained.
Positive sentiment also seems to be maintained on European trading floors. The mentioned data from China on industrial production and retail sales may give investors hope for a stronger global economic recovery than previously expected. Additionally, over the weekend, Americans began receiving direct payments from the U.S. government to the tune of $1,400 as part of Joe Biden's aid plan. Some of the Americans declared that they will use these funds for investments, so they can go to either the stock market or cryptocurrencies, as was the case with the $1,200 check.
However, it is still worth keeping in mind the possible negative news for the markets. There could still be concerns about rising bond yields, coronavirus infections in Europe and delays in vaccine introductions. Investors will likely be watching today's Eurogroup meeting, where European finance ministers will discuss fiscal support measures and the impact of the pandemic on various sectors of the economy. Global markets are also looking ahead to this week's Federal Reserve meeting, with investors eager to see if the central bank will take any action to lower bond yields.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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