During the past week, investors seemed to be most committed to trading on the commodity market, where the biggest changes took place with positive moods on Wall Street and other world stock exchanges. On the currency market, on the other hand, anti-dollar sentiment prevailed.
Last week brought a strong upward correction in the price of natural gas futures contracts in the USA. Earlier, from the end of October to mid-November, the price fell by more than 20 percent due to the projected warming in the United States and a drop in demand for gas. Currently, the correction within downward may continue, which in recent days has brought about a nearly 10 percent increase in natural gas futures contracts. Thus, it seems to have gained the most from popular instruments.
Oil is in second place this week with an increase of over 6 percent. For a barrel of WTI, this was the fourth week of growth in a row. The last time we saw such consistent growth in this market was in April. The price of a barrel of WTI oil rose to the levels last seen in March, testing at USD 46.5. Positive news for the oil market could be the OPEC Cartel, which may hold back from increasing production until the vaccine is widely available worldwide.
The past week was also successful for the stock market bulls. The world's major indices seem to be growing and the unexpected leader is the Japanese Nikkei 225. It gained about 4 percent and was at its highest level since 1991. Nasdaq 100, S&P 500 and Dow Jones seem to be gaining more than 2.4 percent this week, and a positive tone for Wall Street rebounded after Donald Trump's official order and the start of the power transition process and after information from the Federal Reserve, which is expected to continue to help the financial markets and economy.
In the past week, commodity currencies were the most likely to gain in the currency market. These include the New Zealand, Australian and Canadian dollars. Their rates of return to the U.S. dollar are 1.2 percent, 0.9 percent and 0.8 percent respectively. The EUR against the USD seems to be gaining over 0.6 percent on a weekly basis, and the exchange rate exceeded 1.1930 USD.
The key event in the near future seems to be the weekend brexit negotiations in the UK, which may translate into greater volatility in the British pound's quotations early next week. This week, the GBP/USD pair seems to be rising by almost 0.5%.
Meanwhile, the biggest drops, which may have been enjoyed by i.e. market bears, were recorded on the gold and silver market. The former fell by almost 5 percent and the latter by more than 7 percent, in a relatively weak USD environment. The optimism that appeared on the markets after the appearance of an effective vaccine on COVID-19 could lead to the largest outflow of capital from gold funds in history. This is how hot capital could escape, which led to above-average increases in the summer. Currently, the situation in these two markets is trying to stabilize after a potential correction.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
