Rally Fizzles Ahead of ADP, OPEC Meeting

By Peter Bukov|

Published: October 05 2022, 08:04 GMT+0

Rally Fizzles Ahead of ADP, OPEC Meeting

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This week’s bullish momentum waned on Wednesday amid profit-taking, bringing the main equity indices notably lower during the London session.
At the same time, the USD also erased some of the recent losses as the EURUSD pair had failed to jump above parity so far.

Rising geopolitical tensions appear to be dampening investor enthusiasm toward risk. The day before, the Russian ambassador to the US warned that there was now a greater risk of a direct confrontation between Russia and the west in reaction to Washington’s decision to deliver further military assistance to Ukraine.

The alarming situation throughout the world is still present. While recessions are a possibility in the majority of the world’s major nations, inflation remains persistently high. For the record, the EU released the August Producer Price Index, which rose by a record-breaking 43.3% YoY.

Later today, the ADP private sector employment report, the ISM service sector PMI survey for September, and the goods trade balance data for August will all be included in the US economic docket. The latest sanctions on Russia, which include the oil price cap, will be officially announced by the European Union.

Oil keeps short-term uptrend

Market investors will closely monitor the news stories that emerge from the OPEC+ summit as well. Oil prices have increased recently as a result of reports that the group may reduce output by as much as 2 million barrels per day. Following a 5% increase on Monday, the price of a barrel of West Texas Intermediate (WTI) increased by over 4% on Tuesday. It was last seen trading near 87 USD.