WTI crude oil and its Brent counterpart remain above $70 and $75/barrel respectively, but prices appear to be flattening somewhat as the US rig count rises and funds begin to cut bearish bets.
"Last week saw the US rig count rise to 844, the highest level seen since March 2015," reports Saxo Bank head of commodity strategy Ole Hansen. Hansen also notes that a delegation of Iranian diplomats will be touring Europe, Russia, and China in an effort to secure buyers following the US' decision to pull out of the nuclear deal.
"Oil traders will watch the progress of the Iranian tour closely, along with the clashes between Israel and Iran in Syria".
Beyond crude, Hansen says that gold and silver have held key support levels at $1,300/oz and $16/oz respectively as the US dollar rally loses momentum.
"Dollar strength is easing with emerging market and commodity currencies the main initial beneficiaries," says Saxo Bank head of FX strategy John Hardy. Looking at EURUSD, however, Hardy says that the benchmark pair cannot truly be seen as reclaiming bullish momentum until it retakes the 1.22 area to the upside.
"One potentially euro-positive development is the currency's ability to shrug off the political news out of Italy [where a populist government is forming]," Hardy adds.
In stocks, Saxo head of equity strategy Peter Garnry says that the June 1 inclusion of the first round of Chinese A-shares into the MSCI emerging market and world indices marks a key date on traders' calendars. Garnry also reiterates his view that the Xiaomi IPO will be the biggest event of the year in equities.
For more on forex, bonds, equities, and commodities, watch the recording of today's Morning Call in full.
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.
Technical Outlook: Gold, Oil and a remarkable multi-decade perspective on EquitiesThe Nasdaq bubble pattern, USDJPY resistance, crude oil uptrend losing steam and the technical outlook for USD.
China: the train of new development paradigm left the station two years agoChina is transiting to a new development paradigm, as they are hit by deteriorating terms of trade, a slower global economy and an uncertain future while continuing attempts to contain the pandemic.