Oil jumps above USD 60, equities climb
European stocks are enjoying a very strong start to the week, led by energy stocks as WTI jumps above USD60 for the first time since the pandemic hit. The current crude rally wasn’t exactly lacking any momentum anyway so it’s perhaps not all that surprising that WTI has captured USD60 but you have to wonder what it still has left in the tank. Again, momentum indicators aren’t raising any major red flags yet but that may soon change, so caution is certainly warranted.
There’s real momentum behind the global recovery trade and with every passing week, it seems investors are becoming more optimistic about it. The vaccine rollout is providing enormous encouragement, with the UK surpassing 15 million vaccinations and the topic of conversation finally turning to reopening the economy.
Cases and fatalities are falling rapidly due to a combination of the vaccine and the lockdown and the progress of the last two months should ensure restrictions are eased for the last time starting in a few weeks. The UK economy has suffered worse than most this last 12 months but could now be positioned for a powerful recovery.
Despite the strong gains being seen today, it’s actually been a very quiet session. Holidays in China and the US have naturally left a massive void and a couple of pieces of tier three data from Europe doesn’t quite fill it.
Activity may pick up as the week progresses but I wouldn’t be surprised to see this be a common theme for much of it, with the calendar looking a little thin throughout. Friday offers a number of PMI surveys but prior to that it’s just the odd bit of data. Perhaps I’ll be proven wrong. Let’s face it, the market movers haven’t exactly been the usual suspects this year.
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