Stocks off to a decent start, oil calm

It has been a decent start to the month of February, after a difficult opening month of the year, with Europe ending the day up around 1% and US stocks also enjoying modest gains.

Mining stocks are the latest beneficiaries of the Reddit frenzy but the gains are more widespread than just these stocks. Of course, stock markets are coming off a tough start to the year, in particular the last few weeks, so we may just be seeing a little bit of reprieve led by the miners.

I guess we’ll see over the coming days just how much sentiment has improved but I’m not particularly optimistic. It will obviously be fascinating to see which area of the market Reddit traders target next and what the knock-on effects will be elsewhere. This at times over the last week or two appears to have contributed to the risk-aversion but we’re not seeing much of that today.


Oil remains in consolidation

Oil prices are making small gains on Monday, in line with the more positive risk appetite in the markets. Broadly speaking there’s no change, with the crude market still in consolidation after an impressive couple of months. We could see a bit of a pullback in the coming weeks without being any cause for concern but for now, WTI looks poised to settle in the USD51.50 to USD54 range.

Should the near-term demand outlook change in the coming weeks, as the vaccine rollout continues, we may see a shift but OPEC+ has shown itself to be very reactive to the situation over the last year and I don’t expect that will change. The biggest risk continues to come from US shale.

For a look at all of today’s economic events, check out our economic calendar.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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