Technical & Fundamental Oil Reports Specialists

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The perfume of QE

Published Friday, March 27th, 2015

A fresh bout of risk aversion dampened investor sentiment yesterday as geopolitical tensions made an unwelcome return to the fore following the latest military intervention in the Middle East. The actions carried out by Saudi Arabia and its Arab allies against Houthi rebels in Yemen sent shockwaves across all major asset classes. The resulting risk-off environment bolstered demand for perceived havens such as the yen and gold while equities endured choppy trading to end the session lower.

The slide in stocks was however moderated late in the day by a pause in the recent run of disappointing US economic data after figures revealed that jobless claims for the last week fell to their lowest since mid-February. Moreover, comments from two Fed officials stating that the US economy is on a strong footing and was in good enough shape for the tightening of monetary policy to begin went someway to quelling fears that its economic growth was spluttering. Similarly encouraging evidence also came from the eurozone where the Spanish economy was seen expanding by a solid +0.8% in 1Q and German 2015 growth prospects were give a boost after estimates were raised  to +1.8% from +1% previously. The batch of better-than-expected data releases and hopes that the impact of Saudi actions in Yemen may prove short-lived has increased expectations that risk assets will end the week on a more positive note with the Eurofirst 300 currently rebounding 0.6% at the time of writing.

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Posted by Stephen Brennock

Stephen Brennock joined PVM in 2013 after having worked as a project manager for a business development firm. He graduated with a degree in Business Management in 2007.