The main focus in markets is still on US-Iran tensions and that hasn’t really changed much since the start of the week. From earlier: Middle East tensions remain heightened with the weekend drawing closer
But after four days of grappling with more doom and gloom, the mood in markets today is hinting at a bit of a light breather. Well, for now at least.
Oil prices are nudging back down and coming off the boil, with WTI crude lower by 3% today to drop back under $90.
[WTI crude oil daily chart ($/bbl)]
The chart above will be one to watch as price action is now being called back towards a test of the 100-day moving average (red line). Keep above that and the more bullish momentum obtained yesterday will continue to hold. But drop below the key technical level, and sellers will have some say to push back a little more. The closing level today, whether above or below $90, will also be one to be mindful about.
In any case, it is still another impressive week for oil prices in what will be a third straight week of gains. After the over 14% gains last week, WTI crude is still poised to end the week over 9% higher at current levels.
Looking to broader markets, the retreat in oil prices today is also seeing other asset classes find some reprieve. Bond yields are also coming off the highs with 10-year Treasury yields down 1.2 bps to 4.69%. In Europe, 10-year yields in Germany are down from 3.20% to 3.185% with 10-year yields in France also moving down from 4.035% to 3.988% currently.
Besides that, we’re seeing equities find some relief too with major indices in Europe posting slight gains while S&P 500 futures are up 0.3% on the day. Wall Street had it rough yesterday and while tech shares are poised for another weekly loss, at least there is a bit of breathing room as we look to the open later.
All that being said, it’s still a bit early in the day and it won’t take much for the jitters to creep back in and stir up some nerves. That especially if we get any negative headline risks in the session ahead.
This article was written by Justin Low at investinglive.com.
