By FXEmpire.com
Analysis and Recommendations:
Crude Oil edged up slightly as the USD weakened a bit in early trading, although the USD regained strength a little later. Comments by Italian Prime Minister Monti sparked markets and pushed the euro up until the remarks were rebuffed by German Chancellor Merkel. Crude will go into the holiday weekend trading above the 91.00 level, trading at 91.03 at this writing.
Comments by Italian PM Mario Monti were being fingered as having provided the motivation for a lift to the risk trade in that he stated that the majority across the EU support joint Eurobond issues and that Germany’s opposition could be overcome. It seems the market was a little too quick to inject some optimism here as equities have since turned negative again and probably for good reason. For one thing, Monti’s account of the EU Summit sharply differs from that provided earlier by Luxembourg PM Jean-Claude Juncker who said that eurobonds have no support in the German influenced regions as an offset to support within France. For another, German Chancellor Angela Merkel reiterated opposition to eurobonds and this stance has been supported by the opposition. What markets are latching on to is that her government has, however, agreed to study a “redemption fund” proposal.
Crude oil prices increased around 0.5 percent on the back of ease of worries over European debt crisis coupled with Iran’s agreement for the third round of meeting with world’s major powers.
Next week could give a better indication of the U.S economic recuperation with the Nonfarm payrolls data scheduled for release. Also in line, next week is the U.S GDP figures; both heavyweight numbers could have a significant bearing on the commodity prices. The recent string of weak numbers from China is raising fresh concerns about the pliability of the Chinese economy amid softening global demand and in that regards, policy easing from China could be on cards in the coming days.
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