Daily Key points: Stock markets regain ground

The greenback was on the downside yesterday against its counterparts as overall is tended to experience safe haven outflows as the market may have hoped for an easing of the Fed’s aggressive rate hike stance. Yet we tend to be quite skeptical for such an easing in the Fed’s hawkish intentions, given also that Fed Board Governor Jefferson yesterday stated that inflation remains the Fed’s main objective, even if growth would be suffering the consequences, remains to lower inflation. Nevertheless we saw also US stockmarkets being on the rise yesterday with all main indexes, the Dow Jones, S&P 500 and Nasdaq being in the greens for a second consecutive day, implying a certain degree of optimism on behalf of investors. It would be characteristic that Twitter jumped about 23%, after headlines surfaced that Elon Musk may ultimately proceed with his plans to buy out the social media company. On the other hand, we also expect that any rally in US stockmarkets may be short lived, as the negative repercussions of the Fed’s tightening cycle could be reflected on the earnings reports which are to start being released next week. On the commodities front we note that oil traders are to have a busy day today as oil prices got some substantial support yesterday with WTI being on the rise for a second consecutive day yesterday, ahead of OPEC discussion for oil production levels later today. Should the oil producing block actually decide to deliver a decision based on deep production cuts in an effort to rebalance the marekt, we may see the bullish market sentiment intensifying as the supply side of the commodity would come under threat, tightening the global oil market. We must note that the decision is to be taken in an environment where the US is exercising pressure on the block not to proceed with production cuts, as it considers the oil market to be allready tight. Furthermore, we must note that the API weekly oil inventories figure yesterday showed a drawdown of -1.77 million barrels taking the markets by surprise, while oil traders today may also be focusing on the EIA crude oil inventories figure for confirmation.

Dow Jones was on the rise yesterday testing the 30375 (R1) resistance line. Overall there seems to be still some bullish sentiment in the market that may allow the index to advance further, yet there are some signs of stabilisation as well. Should the bulls actually maintain control over the index, we may see it breaking the 30375 (R1) resistance line and aim for the 31300 (R2) level. On the flip side, should the bears take over, we may see the pair reversing course, breaking the 29520 (S1) support line on its journey southwards.

WTI’s price was on the rise yesterday aiming for the 87.00 (R1) resistance line. Given that the commodity’s price was able to break the downward trendline guiding it since the 30   of August, we see some bullish tendencies, yet for influence of the bears to be overcome, WTI’s price will have to break also the downward trendline incepted since the 8   of June. Should the commodity find additional buying orders along its path, we may see it breaking the prementioned downward trendline, the 87.00 (R1) resistance ceiling and take aim for the 94.00 (R2) resistance level. Should on the other hand a selling interest be expressed we may see WTI’s price respecting the prementioned downward trendline, retreating, breaking the 81.50 (S1) support line and aim for the 76.00 (S2) support barrier.  

Other highlights for the day

Today in the European session we note the release of Germany’s trade data for August, the final service sector’s and composite PMI figures for September of France, Germany and the UK. In the American session we get from the US the ADP National employment figure for September, the ISM non-manufacturing PMI figure for September and from Canada we note the release of the building permits growth rate for August and trade data for the same month. During tomorrow’s Asian session we get Australia’s trade data for August.

US 30 Cash Graphique H4

Support: 29520 (S1), 28600 (S2), 27320 (S3)

Resistance: 30375 (R1), 31300 (R2), 32400 (R3)

WTI Daily Chart

Support: 81.50 (S1), 76.00 (S2), 69.10 (S3)

Resistance: 87.00 (R1), 94.00 (R2), 102.50 (R3)

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