Technical & Fundamental Oil Reports Specialists

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Breakdown not meltdown

Published Wednesday, May 21st, 2014

Cautious, risk averse, tentative and uncertain are all words that describe the current sentiment in both stock and oil markets. The markets are in this situation because the global economy lacks the key ingredient which is growth. Growth is paltry in Europe, unconvincing in the US, slowing in China and uncertain everywhere else.

Over the next few days the latest flash PMI numbers will be released revealing whether anything has happened in the last few months to change growth perceptions. We also have the release of the Federal Reserve minutes today, European elections tomorrow, Ukraine’s election on Sunday and a long weekend in the US and UK.

Yesterday the stock markets were in a subdued mood lacking any bullish news and left to deal with disappointing retail figures. Investors are bemused by the continued appetite for safe haven US Treasuries, Gils and Bunds. Ten-year US Treasury yields were expected to be over 3% by now in the face of a recovering US economy, rising inflation expectations and Federal Reserve tapering.

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Posted by David Hufton