Market Wrap
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US stock markets are ending the year with all-time highs even though the Omicron variant has been causing air travel disruptions after a sharp increase in the number of COVID-19 infections. Airlines and cruise companies are being severely hit but the big tech stocks are mostly up. Tesla and Facebook have both jumped 3% today with Apple and Microsoft up 1.40% and 1.52% respectively. The seasonal lift in the stock markets also known as the Santa Rally typically sees shares lifted on thin volume and reduced economic news.
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The EURUSD is approaching the 1.1320 to 1.350 resistance zone with the 1.1400 level and the 50-period Donchian Channel midline acting as significant resistance above.
The forex heatmap has shown the Japanese yen as being the weakest currency all day while the pound has been able to keep relatively string against its peers. The commodity pairs have seen some flows shift into them as the US dollar lost ground into the end of the London session.
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Natural gas prices are trading in between the support levels of $3.50 and $4 per million British thermal units having fallen over 40% from record highs. Having seen geopolitical tensions rise and gas prices fall we now have a better geopolitical outlook as Russia moves troops back from the Ukrainian borders after conducting their military exercises. But cold weather fronts over Europe and the USA mean that despite the bearish inventory numbers in the USA, Nat Gas futures are up week over week.
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WTI & Brent crude futures jumped more than 2% today as negotiators are returning to the table to discuss the Iran nuclear deal, with the main topics focusing on Tehran’s return to the 2015 Joint Comprehensive Plan of Action followed by the United States lifting sanctions imposed on the Middle Eastern country.
“Today, we have a mutually acceptable document on the negotiating table, which we consider as the result of documents involving both the nuclear issue and the sanctions agreed upon on December 1 and December 15,” Iran Foreign Minister Hossein Amirabdollahian said ahead of the meeting.
Whether the rise in oil prices can be sustained will depend largely on the inventory numbers that come out this week, as there will be a drop off next week due to the reduced travel demand over the holiday period.