Check out the brand new DailyFX trading forecasts[1] for Q3
MARKET DEVELOPMENTS – CRUDE OIL[2] PRICES SURGE ON SANCTION RENEWAL
US equities futures (DJIA +0.4%, Nasdaq[3] 100 +0.2%, S&P 500[4] +0.2%) are trading in positive territory with risk sentiment cheering the rebound in Chinese equities overnight. Alongside this, a plethora of strong earnings from European companies have also buoyed equity markets.
Crude Oil: Oil prices are notably firmer following renewed sanctions on Iran[5], with Brent back above $74/bbl. The first round of sanctions took place at 1201EDT which are related to US Dollar[6] banknotes, trade in precious metals and transactions involving the Iranian Rial and sovereign debt. The second round of sanctions will be imposed on Iran’s oil sales and energy sector on November. Ahead of this, buyers of crude will likely lower their imports in line with US guidance, as such, fears over supply loss will continue to underpin oil prices. Elsewhere, Saudi Arabia crude production saw an unexpected drop of around 200k in July, which has also added to the gains in crude.
TRY: The descent in the Turkish Lira has showed no signs of abating with the currency continuing to post a fresh record low on a daily basis. The latest move is due to the rising tensions between the US and Turkey. Alongside this, the inaction by the Turkish Central Bank has also sparked further selling in the Lira with many questioning the independence of the central bank. Given the rapid rise above the 5 handle in USDTRY[7] a move towards 6 seems likely in the near term.
