Market Snapshot – Oil Rises on Supply, Gold Higher on Uncertainty

Global Stocks Consolidate

European stock markets consolidate as the FTSE 100 and DAX are struggling at high levels, with the former held back by a stronger Pound and the latter by a reversal of safe haven flows as France and peripherals outperform.

Commodity producers followed declines in copper prices, as a stronger dollar hurt base metals. In Asia, the Nikkei was -0.04% down at the close, while the Hang Seng and the CSI 300 underperformed. Yesterday’s FOMC minutes showed no sign of urgency for a March hike, even if many officials saw the chance of a hike fairly soon.

Gold Trades Higher Post Fed Minutes

Gold futures are trading higher shortly before the regular session opening. Gold investors didn’t seem to be too impressed with the Fed’s suggestion in its minutes released late Wednesday that interest rates could go up “fairly soon”. Investors appear to be taking hedge protection in gold as far-right French presidential candidate Marine Le Pen climbs the polls ahead of the first run-off election increasing global political uncertainty.

Gold is trading at 1248.15 +1.20%, Copper follow trading at 18.112 up 0.90%.

Oil Prices Rise Ahead of EIA Report

Oil futures are trading higher early Thursday following yesterday’s surprise drawdown in stockpiles according to the American Petroleum Institute and today’s inventories report from the U.S. Energy Information Administration.

Late Tuesday, the API reported an 884,000 barrel decline in U.S. crude supplies for the week-ended February 17. Traders were looking for a 3.4 million barrel increase. The API also reported a decline of 893,000 barrels of gasoline and a 4.3 million barrel decline in distillates.

The EIA is expected to report a 3.4 million barrel increase at 1600 GMT (Note the new time). However, this estimate may have changed due to the API report. Look for increased volatility if there is a divergence between the EIA report and the API report.

US Dollar Retreats Despite FOMC Minutes

U.S. Dollar Index is trading lower on Thursday. The weakness suggests that investors don’t believe the Fed will raise rates at its March 15 meeting despite suggesting in the minutes of its February monetary policy meeting that the policies of President Trump could lead to a rate hike “fairly soon.”

The US Dollr dropped against all of its major counterparts. US dollar index is trading at 101.08 down 0.25%, EUR/USD is trading at 1.0573 +0.17.