European Markets Start the Day Lower
Oil Prices Continue to Wobble
Gold Edges Higher
Market Recap – This week in a nutshell:
Oil prices held near multi-month lows this week on ever increasing stockpiles while the sterling hit two-month lows after Bank of England governor Mark Carney kept interest rates unchanged. The greenback also climbed to 3 week highs against the yen amid talks for another rate hike by the Federal Reserve but retreated early on Thursday.
Thu, June 22: In Today’s Markets…
1. European Markets Lower Ahead of E.U. Council Meeting
European bourses started the day on a bearish note on Thursday, as European politics and a turbulent oil market set the agenda for investors. Thursday marks the first day of a two-day European Council meeting. At the summit, European Union leaders are set to focus on strengthening the EU and protecting its citizens. Topics such as terrorism, security, globalization and climate change, will be discussed. It is also worth noting, that British Prime Minister Theresa May is expected to make an appearance at the summit. Investors will be looking closely at her comments as she is likely to reveal U.K.’s intentions when it comes to exiting the political-economic bloc. Note that the sterling (GBP), is expected to be largely impacted by May’s comments.*
2. Oil Prices Oscillate Over Concerns of a Supply Glut and as US Stockpiles Drop
Oil is expected to continue to be at the forefront of investors’ agenda today, as prices continue to fluctuate over concerns of a glut in the market. It should be noted that a decline in U.S. stockpiles provided some support to oil prices today. Oil prices continue to wobble however, despite the U.S. Energy Information Administration (EIA) announcing that inventories had fallen more than expected.**
3. Gold Edges Higher as Dollar Eases
Gold prices edged higher for a second consecutive day on Thursday, supported by a weaker dollar. It should be noted that gold is highly sensitive to changes in key interest rates and the relative strength of the dollar affects the opportunity cost of holding non-yielding assets such as bullion. An easing in dollar value, especially its weakness against the yen supports gold which becomes cheaper for investors to buy and store. Demand for gold increases as the dollar weakens while other precious metals also gain. Specifically gold prices added 0.7 percent today while silver climbed 1.5 percent as of 6:45 GMT.**
*Source: Reuters
**Source: CNBC
