Oil prices seem to be edging higher

Oil prices seem to be edging higher since yesterday. Tensions in the US-Iranian relationships seem to be on the rise over the past 48 hours with the US highlighting that its patience is running out.

The two sides are to meet in Geneva, Switzerland, for a second round of negotiations and given the criticality of the situation for the supply side of the international oil market, oil prices may become quite sensitive.  

Xlence Research Team opinion

Should we see evidence emerging that the two sides are nearing a deal, we may see oil prices retreating. On the flip side, should the negotiations fall through, without a deal being reached, we may see oil prices rallying.

US stock markets seem to retreat

We see market worries for oversized AI investments by US mega cap tech companies continue to be present and weigh on US equities on a fundamental level.

Markets seem to doubt whether the juice is worth the squeeze, yet at the same time the market’s expectations for the prospects of AI are also present. 

Xlence Research Team opinion

We still consider that should market worries intensify we may see a risk off market sentiment being enhanced, we may see US equities retreating.

USD continues to gain in the FX market

In the FX market we see the USD continuing to gain against its counterparts yesterday and during today’s Asian session.

Across the Atlantic, UK employment data for December unexpectedly showed a loosening of the UK employment market, which tended to weigh on the sterling while in tomorrow’s Asian session, we note the release of the UK CPI rates for January and a possible wider than expected slow down of the rates could weigh on the pound further.

In tomorrow’s Asian session we highlight from New Zealand the release of RBNZ’s interest rate decision. The bank is widely expected to remain on hold, yet should such a  decision be accompanied by a dovish forward guidance, we may see the Kiwi losing ground.  

Xlence Research Team opinion

Overall as the markets restart their engines after the public holidays in the US and Canada and the New Lunar Year celebrations in Asia, we may see volatility starting to rise.

Given the low number of high impact financial releases from the US, we expect the greenback’s dominance to ease over the FX market and a more balanced trading mix to emerge. 

Bitcoin continues to be shaky

Bitcoin’s price continued to remain below the threshold of $70k. No major fundamental shift has been observed for Bitcoin since yesterday, and nevertheless given the crypto’s riskier nature, should we see the market sentiment becoming more risk off as possibly weighing on the crypto.  

Xlence Research Team opinion

For the  time being we tend to adopt a bias for a sideways motion of the cryptocurrency, yet at the same time we are issuing a warning for possible bearish tendencies.

Disclaimer: This information is not considered investment advice or an investment recommendation, but instead a marketing communication.