Since the previous råvarubrev has westward been an unchanged interest rate announcement from the u.s. central bank, followed by a conclusion of the previous week with a strong sysselssättningsdata. French elections on Sunday went as expected, with the Macron as the clear winner. However, there was no significant movements, but the profit is seen rather as inprisad in the recent surges. ”Skräckindexet” the VIX continues to climb all the to the south, which allowed us to be much more on the ball. At the same time there are actually cases where we see good opportunities to rise, and this week we are highlighting coffee, which is starting to show more positive signals when köpstyrka shown their prowess…
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The week opened relatively quiet on Monday after Sunday’s elections in France, which despite a victory and relief when the Macron won the French presidential election, passed quite unnoticed in the market.
66 per cent of all the votes went to Emmanuel Macron, against the 34% that went to Marine Le Pen. The closest to waiting for the parliamentary elections in June, where the challenge for the Macros will be to try to get enough support to get a well-functioning government.
Initially strengthened the euro on the result, but ended Monday unchanged on Tuesday back somewhat weakly.
The previous week left the Fed’s key interest rates unchanged, followed by Friday offered a better than expected employment. The outcome in april was better than expected, and the unemployment rate fell to the lowest level in 10 years. This ensures that it is natural that we can now get a rate hike in June. We however experienced not any major reaction on the market, and the dollar index continues to be noted around 99 dollars.
Oil has continued to lose ground since the previous week, and is now trading clearly below 50 dollars, on Tuesday, just under 49 dollars..
The large decline has occurred following the Opec tried to dampen expectations of an extended decline in production, when the oil cartel meets in Vienna at the end of the month.
”The cartel is expected to certainly extend the self-imposed production cut by a further six months, but it will be difficult to get non-Opec members to follow suit. Keep the u.s. growth in output, it will be difficult for Opec to extend the cut beyond 2017,” commented an analyst at Interfax Energy to Reuters.
In the news showed it on Monday that Russia and saudi Arabia expressed support for an extension of opec’s produktionsfrysning beyond 2017, which got the oil to recover briefly.
A further cause for concern in the week when it comes to oil, has been to Libya’s oil production is now stepped over the level of risk that we had highlighted earlier a while ago. The country’s oil production now amounts to 780 000 barrels per day, also the highest level since 2014.
Several base metals have been pushed south in the days, where China re-gained focus when the fresh statistics, including high inventory levels, bonfires on the concerns over an economic slowdown in the country. The country’s imports of copper fell to the lowest levels since October of 2016, which means that the copper now spoof away the year’s rise.
Among the precious metals, have we continued to experience loss of land among the gold and silver, despite the fact that the dollar is not showing any great strength.
Among foods , we think that the coffee stand out this week, after köpstyrka looked back and we think we may have bottomed out for now to turn to the north.
Last but not least, we highlight skräckindexet the VIX this week, which fell to -7.6 per cent on Monday, is 9.6, which is the lowest level since december 1993.
We have, in the past weeks highlighted that we have sought us all to the south, and asked the question, what is to come… Maybe we will get an increase in anxiety in the market when the Fed will raise interest rates in June…? A lot is considered to be stretched right now, at the same time as the gold, also known as the ”safe haven”, has been strongly pressed last time, which brings opportunities to the turning point if the VIX starts to move more to the north…
Skräckindexet the VIX is currently at the lowest level since december 1993.
Analysis
Opec in focus while the oil continues to lose ground…
In the usual way, it is Opec that is in focus when the oil falls to the south.
The market is questioning, and at the same time are looking for an extended decline in production for the next meeting in Vienna end of the month, which caused the oil to back over 14 per cent in a week.
The mistrust that exists around the next Opec meeting, has resulted in the oil stepped over 49 dollars on Tuesday, also the clear level of support. The negativity that arose in connection with this, started a few days ago when the oil got under the ”fork in the road”, MA 200.
We close clearly under 49 dollars, increases the risk of a return of 47 followed by 45.50 dollars. It would prove to be a false eruption, well then increases rather the probability that we shall turn our gazes back towards the 50 dollars.
Sharp decline in copper is concerned…
Copper has in just a week lost over 4 per cent, which led us to not only to step under a heavy intensity, but also breaking the underlying trend line formed since november 2016.
It balansområde we highlighted in the previous week, never got a rebound for the re-establishment therein, as we now clearly stepped over not only the support at the 5 650, but also 5 500 dollars.
Once again, it is China that is causing concern in the market, with again a focus on the risk of economic slowdown after recent statistics.
Even if the opportunity is available to a rebound up over 5 600 dollars, it has changed the playing field, rather opened up technically for a further decline, initially towards the 200-day moving average, which right now is noted just under 5 400 dollars.
Silver on the way towards the support level…?
For variety’s sake we highlight a silver this week, in a week backed over -3.9%.
Silver has despite the fact that the dollar is not received, a gain after better-than-expected employment in the U.S. continued to the south, and now looks to be on the road to challenge the support level in the short at 16 dollars. Thus did both the trigger to the dollar, at the same time as we did not see any positive impact among the precious metals.
At the same time indicates that we are clearly oversold in silver, and in line with this, at the same time we experienced some weakness during the last few days.
This in itself increases the likelihood that we may get a rebound just before the support level, or alternatively, a false outbreak worse. Initially, this opens up the possibility of a visit to 17 dollars, which is our current position in the week when it comes to silver.
Dollar run over the yen…
Despite the fact that we have not seen any broad strengthening of the u.s. dollar, the japanese yen is an exception, since a week back and got a dollarförstärkning of +1.96% against the yen.
Last few days we have noted that japanese interest rates increased slightly, while the yen continued dropping against the us dollar, which meant that we had an outbreak in the setting trendkanal has been going on since the end of 2016.
In the short term we are overbought, at the same time, as we also noted over the 100-day moving average on Tuesday.
This opens up for a short-term rebound of the profit taking, followed by a possible further rise. However, we are somewhat weak pending and awaiting an establishment primarily above the MA 100 before we see a further rise to the initially around 115.
Time for a cup of coffee…?
Köpstyrka have started looking forward in coffee past few days, which means that we are now challenging the resistance around 134.50, after a rise of just over +0.7 per cent a week ago.
Since the end of the year, we have experienced a significant decline, and a decline handelsintervall have been experienced after we bottomed out at 127 dollars, the lowest price level since a little more than a year ago.
Purely fundamentally, consumption is expected to increase, at the same time as the output point to lower levels ahead, which opens up to the turning point.
Technically, this opens up for a rise to 139 dollars, before we are expected to encounter kanaltaket in the handelsintervall we find ourselves in.
In the long term, there is scope for rebound to resistance at 146 dollars, unless the weakness in the current interval takes us back to over 130 dollars…
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