Indices and oil drop sharply

Indices on Wednesday may have started on a positive note but ended up quite unlucky, at least in the US and Europe. Nasdaq fell 1.3%, SP500 dropped 1.2% and DAX slipped 0.5%. Today, the European session starts with a small bullish reversal attempt but is not technically relevant, at least for now. After a session like that, traders are eager to find an explanation for the drop, and they always find one. This time around, the drops were apparently caused by the fear of recession in 2023. Such explanation is as good as any and market moves do not always need an explanation, anyway. Sometimes, moves are just happening for no reason at all or are a result of a combination of various factors. That’s what the market is like.

Big moves are happening at the moment, as we observed yesterday in the energy sector. Oil is currently down more than 2%, following yesterday’s drop of more than 0.7%. Technically, Brent dropped below the support of 84 USD/bbl, which is a negative sign and forces us to expect more decline in the nearest future. Precious metals are trading differently. We saw some drops yesterday but today, the price is climbing higher for silver, gold and platinum. The vast majority of the commodities from various sectors, however, are on the red side of the market right now. A helpful way to combat inflation.

On the currencies front, Yen was the weakest currency of yesterday again. Currencies from the Antipodes were the strongest ones. Today, the situation changed completely with Yen being the strongest one and AUD the weakest one among the majors.

The calendar is empty again. There is just one important piece of data – the Unemployment Claims in the US. 225K is expected, which would be a small rise from the previously reported 216K. Apart from that, we will have crude oil inventories that can influence the current volatile oil market.