Oil strikes with its weakness

By Tomasz Wisniewski|

Published: December 08 2022, 09:33 GMT+0

Oil strikes with its weakness

Wednesday was rather quiet on the market. Most of the instruments continued the moves from the beginning of the week. A partial reason for this might have been an empty macro calendar. The most important data shown yesterday was the interest rate in Canada and GDP in Australia. In Canada, we got a 50bp rise and in Australia, GDP came worse than expected (0.6% vs 0.7% expected). The Canadian Dollar was not amazed by this rise and ended the day on the red side of the market. AUD shrugged off the worse GDP data and finished the day with small gains.

Thursday starts with further strengthening of the currencies from Antipodes. NZD and AUD are currently the strongest assets among major currencies. On the other side of the spectrum, we have safe havens like JPY and CHF. That would mean a risk ON mode, at least on the FX market.

Commodities had a good run yesterday, perhaps with the exception of oil who managed to set new yearly lows on Wednesday. All this happened despite the bullish inventory data indicating that crude inventory decreased by 5.2 million barrels last week. A slide in oil is also happening despite covid restrictions easing in China which proves that bulls are experiencing serious problems with this instrument.

Indices continued the bearish correction on Wednesday with the biggest drops noted on the Hang Seng. This seems like an isolated accident as today; Hang Seng is climbing significantly higher driven by the rumors that Hong Kong is considering easing some covid restrictions. Futures are currently slightly bullish with a majority of them trading on a small plus.

The calendar today is surprisingly empty. We already saw the Japanese GDP data who came negative but slightly better than expected (-0.2%vs-0.3%). The most important event today is a speech from ECB President Lagarde and Unemployment Claims in the US, and thus “all is quiet on the western front”.