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Old 16-12-2020, 16:08
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KostiaFM KostiaFM is offline
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Default Re: Daily Market Analysis by ForexMart

Brent. December 16, 2020 The oil market is growing despite a number of negative factors

Oil prices continue to remain stable above $50 a barrel, ignoring all the fundamental factors that could cause a corrective pullback.

First, according to the OPEC forecast, oil demand in 2021 will remain low, and oil consumption worldwide will average 97.3 million barrels per day in the IV quarter of the year. By comparison, in 2019, the same figure was recorded at over 100 million barrels.

The International Energy Agency (IEA) has similar views, which has lowered its forecast for a recovery in demand in 2021 by 170 thousand barrels per day to 5.7 million barrels per day.

Secondly, an increasing number of countries in Europe and states in the US are tightening coronavirus restrictions during the Christmas and New Year periods, which will also negatively affect oil demand.

Today we should pay attention to the data on changes in US oil reserves last week. Analysts predict a drop in US oil inventories by 1.9 million barrels, an increase in gasoline inventories by 2.6 million barrels and an increase in distillate stocks by 1.1 million barrels.

EUR/USD. December 16, 2020 Euro broke through the level of 1.22 on expectations of the results of the US Federal Reserve meeting

The European currency continues to renew its multi-year highs, breaking the 1.22 mark. The currency was supported by the news that Germany from December 23 will issue a permit for the use of vaccines from Pfizer and BioNTech, as well as strong statistics from the euro area.

The main event of the day today will be the announcement of the results of the US Federal Reserve meeting. Market participants are almost sure that after a large-scale expansion of the ECB's quantitative easing program, it is highly likely that the Fed will take similar steps. And this is an extremely negative factor for the US currency rate.

Moreover, the situation on the labor market in the United States is noticeably worsening: the current indicators indicate not only a slowdown in the pace of its recovery, but also an increase in unemployment.

From the economic reports today it is worth highlighting the data on the index of business activity in the manufacturing sector in Germany: the indicator came out better than forecast (58.6 points against the forecast of 56.4). The similar index in the service sector also increased (47.7 against the forecast of 44.0 points). Moreover, business activity throughout the eurozone also showed an increase in all indicators, which was another positive factor for the euro exchange rate.
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