Advertisement
Advertisement

European Stocks Move Higher as Oil Surges Over 8% Ahead of OPEC Press Conference

By:
David Becker
Updated: Nov 30, 2016, 13:15 UTC

European stock markets are mostly higher. The Spanish IBEX is the most notable underperformer Wednesday, while the FTSE 100, which dropped Wednesday

European Stocks Move Higher as Oil Surges Over 8% Ahead of OPEC Press Conference

European stock markets are mostly higher. The Spanish IBEX is the most notable underperformer Wednesday, while the FTSE 100, which dropped Wednesday managed to bounce back as Sterling declined against EUR and USD and oil prices moved higher. Pressure on RBS shares, which dropped after it failed the BoE’s stress test and must raise GBP 2 billion. The Italian MIB continues to outperform as investors hope for a technocrat government should Renzi step down following Sunday’s referendum on constitutional reform. WTI is trading above USD 48 per barrel as Reuters quoted Algerian energy sources as saying that all OPEC ministers so far support the proposal for output cuts. The DAX is currently up 0.30% and the FTSE 100 up 0.95.

Eurozone November HICP inflation rose to 0.6% year over year, from 0.5% year over year in the previous month. Weaker than anticipated German and Spanish inflation numbers yesterday suggested that Eurozone numbers may come in weaker than anticipated, but an uptick in the French number this morning already indicated that the Eurozone number still may rise slightly. All in all, though this doesn’t change the picture of inflation numbers that are only very gradual moving higher, but core inflation remained steady at 0.8% year over year in November and while CPI excluding energy picked up to also 0.8% year over year from 0.7% year over year the doves at the ECB can still argue that there is no discernible uptick in domestically generated inflation, so that there is no need to scale back the degree of monetary accommodation for now.

Oil Prices Surge Over 8%

Oil prices have rallied by over 8%, reversing most of yesterday’s 4%-plus decline. The rally was sparked by remarks from Iran’s oil minister, who said earlier, as he headed to OPEC’s meeting in Vienna, that he was “optimistic” of the group agreeing on an output cut plan. A press conference is scheduled for 15 GMT. The cartel is looking to trim production to 32.5-33.0 million barrels per day, down from prevailing record levels of 33.8 million barrels per day, which was provisionally agreed at a meeting in Algiers in late September. OPEC members will attempt to finalize this by agreeing on how the cut will be spread between oil producing nations.

German jobless numbers dropped -5K in November, in line with consensus and leaving the seasonally adjusted jobless rate unchanged at a record low 6.0%. Preliminary PMI numbers already suggested that the improvement in job creation in Germany is continuing and indeed employment figures, only available until October, showed a rise of 13K over the month. Vacancies also picked up slightly. The German labor market is increasingly looking tight, with a shortage of skilled labor in some areas emerging.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

Did you find this article useful?

Advertisement