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MTrading Team • 2022-10-20

Crude oil gains amid jittery markets, strong yields

Crude oil gains amid jittery markets, strong yields

Global markets remained volatile on Thursday, staying mostly risk-averse despite a tepid China-led bounce to riskier assets. The fears of higher inflation and more rate hikes battled Beijing’s debate on easing quarantine for international visitors to offer an active but dicey market.

Even so, the crude oil leads the bulls while extending the previous day’s recovery from the 13-day low. Also, gold remains mildly bid despite the multi-year high treasury yields and softer US dollar.

USD Index fades Wednesday’s rebound as bulls lack fresh intuition amid a light calendar and mixed updates. That said, USDCHF was among the biggest gainer despite the strong Swiss trade report whereas NZDUSD stood on the other hand amid a risk-off mood.

Elsewhere, a draft report suggests further hardships for Defi and major cryptocurrencies, which in turn keeps BTCUSD and ETHUSD sidelined despite softer USD.

Following are the latest moves of the key assets:

  • Brent oil rises for the second consecutive day, up nearly 1.30% at around $94.20 by the press time.
  • Gold struggles to defend the bounce off monthly low near $1,630.
  • USD Index reverses early-day gains and remains mildly offered near 112.80.
  • FTSE prints mild losses but Eurostoxx drops 0.50% and DAX loses over 1.0% intraday at the latest.
  • Wall Street halted the latest run-up while flashing below 1.0% losses by the benchmarks.
  • BTCUSD and ETHUSD are both directionless, posting mild gains around $19,200 and $1,300 levels respectively.
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Mixed markets fail to defeat crude oil buyers 

Despite the US readiness to release a heavy oil load from its strategic reserves, the black gold prices remained firmer amid looming fears that the Russia-linked energy crisis is likely to extend. Adding to the bullish bias could be the risk-positive headlines from China and the OPEC+ producers’ output cuts.

On the other hand, US Treasury yields refreshed a multi-year high as traders fear more rate hikes even as an economic slowdown looms.

With this, the US dollar struggles to follow the bond coupons amid a light calendar ahead of today’s second-tier data.

Even so, the GBPUSD has suffered amid a political crisis in the UK while USDJPY renewed a three-decade top before stabilizing around 150.00.

⏫ 🟢 Strong buy: USDJPY

⏬ 🔴 Strong sell: ETHUSD

⬆️ 🟢 Buy: USD Index, USDCAD, Nasdaq, EURUSD

⬇️ 🔴 Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

Clear directions awaited…

Global traders await more directions as mixed catalysts probe the pessimists, as well as the US dollar buyers. Commodities outside the energy umbrella also struggle and hence challenge the Antipodeans.

With this, today’s US weekly jobless claims, Philly Fed activity index and housing data could entertain traders.

That said, the market pessimism could recall the greenback buyers if the US session releases more risk-negative headlines and firmer US data.

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