A positive start in Asian markets.. and oil posts new gains

A positive start in Asian markets and oil posts new gains

A positive start in Asian markets and oil posts new gainsToday we see the opening of major exchanges around the world after the weekend,
and the markets today appear to be optimistic as oil continues to rise, and US West Texas crude managed to move past the $70 level,
while the strong dollar is putting pressure on gold to decline. 

Evest follows all this and more in the following report:


  1. Morale is getting better And Covid-19 is putting pressure on the markets in the United States
  2. Nikkei and Shanghai rise and Hang Sang decline
  3. Oil price recovery
  4. Gold is declining due to US dollar pressure


Morale is getting better And Covid-19 is putting pressure on the markets in the United States

Fears of a new trade war between the US and China caused US investor morale to deteriorate last weekend. 

The US administration has launched a new investigation into Chinese support and its negative impact on the US economy.

The negative turn of the situation could lead to the introduction of new US tariffs against Chinese manufacturers.

However, market participants’ morale got better on Monday morning, as oil and futures for the US and European indices grew. 

In the US, stock indices declined 0.8-0.9% on Friday and ended the week in the Red Zone.

The Dow Jones index fell 2.2% over the week, the Standard & Poor’s 1.7%, and the Nasdaq 1.6%.

Market pressure comes from signs that the high Covid-19 prevalence rate is impeding the recovery of the US economy.

Last week, US President Joe Biden announced a new vaccination plan for Covid-19 in the country,
including new vaccination rules for federal employees, employers, and medical staff,
in an attempt to contain another increase in the Coronavirus prevalence in the United States. 

According to the New York Times, the average daily number of new Covid-19 cases in the United States is just under 150 thousand,
and an estimated 53% of the population has been vaccinated.


Nikkei and Shanghai rise and Hang Sang decline

In Asia, the dynamics of stock indices mixed on Monday. With Japan’s Nikkei 225 index rose by 0.2%, China’s Shanghai Composite index by 0.3%,
and Hong Kong’s Hang Seng by 2.1%.

US stock futures for the Standard & Poor’s Index rose 0.4%. 

Investors continue to be pressured by the global prevalence of the Covid-19 delta strain, forcing Governments to reimpose or tighten existing restrictions.

This is slowing the pace of economic recovery.

Stocks of Chinese technology companies, after a short period of strengthening, are declining amid increasing control by the authorities. 

Internet platforms had received a strong warning from regulators not to attempt to circumvent the restrictive measures recently introduced.


Oil price recovery

Oil prices rose on Monday morning amid a slow recovery in Mexican production.

The cost of Brent crude futures for November was $73.45 per barrel, up 0.7% and + 2.1% on Friday,
and West Texas Intermediate crude for October was $70.26 per barrel, up 0.8% and + 2.3% on Friday.

More than two weeks after the hurricane, production facilities providing nearly half of US production from the Gulf of Mexico are still pending,
according to data from the US Bureau of Safety and Environment Affairs.

Oil production issues in the Gulf of Mexico remain the main argument for oil optimists.

The recovery in oil production after Hurricane Ida was slower than the recovery of oil refining in Louisiana.

The proportion of oil production infrastructure in the US sector of the Gulf of Mexico that is in the process of renovation is between 60% and 75%.

In the meantime, a new tropical storm Nicholas is approaching the Texas coast, but it could also bring heavy rain and wind to the Louisiana coast.

The authorities of the People’s Republic of China plan to publish information on oil sale auctions from strategic reserves.

However, many market participants believe that this is more of a psychological factor to contain price increases than a real impact on supply volumes.

Goldman Sachs experts note that the problems caused by the hurricane have led to a fall in US stocks of about 30 million barrels, and the fall could rise to 40 million barrels. 

Meanwhile, analysts expect oil to become the leading commodity in terms of fourth-quarter growth rates.

Data from the oil field service company, Baker Hughes, released last Friday, showed an increase in the number of oil production units operating in the United States last week by seven – to 401.


Gold is declining due to US dollar pressure

Commodity prices were trading mixed as most goods in the non-agricultural sector extending gains for the week except for alloys. 

Gold prices traded lower amid the strong dollar and the Fed’s low forecasts.

With no change in ECB policy and supply concerns, core metals rose with strong demand forecasts.

The price of spot gold at COMEX fell by more than 2% to $1787.58 an ounce during the week.

Alloy prices have fallen as gold prices posted their first weekly loss in the past five weeks against the backdrop of US Federal Reserve concerns of declining assets. 

Precious metals are traded under pressure on the strong dollar and concerns that higher inflation will raise the Fed’s declining prospects. 

The Federal Stimulus Program and other monetary easing have been blamed for increasing price pressure,
with the US Federal Reserve buying $120 billion in bonds and other assets since the outbreak of Covid-19 in March 2020 to support the economy. 

Friday’s US producer price data rose 8.3% in August, the biggest rise in a decade, adding to the pressure on alloy prices.

The dollar index recovered strongly, gaining 0.59% to 92.58 during the week.

A positive start in Asian markets and oil posts new gains