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The oil slide on the Iranian deal dragged the risk appetite down

Discussion in 'Current Market Sentiments' started by fx-recommends, Jan 18, 2016.

  1. fx-recommends

    fx-recommends Content Contributor

    Aug 6, 2008
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    The oil benchmarks came under pressure opening the new on downside gaps, after the beginning of implying the Iranian nuclear deal which should flood oversupplied market by another 0.5m barrels daily initially, before increasing to 1m barrels a day within 6 months, as the Iranian National Oil Co. has said.

    The deal hurts the income of the other gulf rivals because this new pumped ample of oil to the market comes from the same region, as a real competitor to the productions of these nations which have been actually suffering from the Iranian interventions into the middle east Arabian regions.

    The deal dampened Iran gulf rivals equities markets, as the lower oil prices form increasing pressure on their capital spending and also consuming spending causing harder financial conditions.

    While the Chinese equities indexes are still undermining the risk appetite by their meltdown which resumed in the beginning of the new week, despite the recent taken action by PBOC to impose reserve ratio on offshore Yuan accounts to lower the speculations against the Chinese currency which has been hurt by increasing expectations of having lower interest rate to support the Chinese economy which is looking now for soft landing of its expansion pace by showing tomorrow growth by 6.8% y/y in the fourth quarter of last year, after growth by 6.9% in the third quarter.

    While the risks around the US economy are still looming with lower manufacturing performance, after Jan NY Empire State Manufacturing Index has shown falling to -19.37, while the consensus was referring to improving to -4 from -6.21 in December.

    From another side, Dec US retails sales came also to weigh down on the US last session showing decreasing in December by 0.1%, while the market was waiting for no monthly change, after rising by 0.4% in November.

    Walid Salah El din
    Senior Market Analyst
    Skype : chief.economist.walid

    Tel: UK. +44 1138590277
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