Market Snapshot – Stock Markets Consolidate Ahead of ECB

Stock Markets Wait With Bated Breath

The stock markets in Europe were in a consolidation mode for much of the day today as the market prepare themselves for some serious volatility tomorrow with the central banks lined up. We have the ECB rate announcement followed by the statement and press conference and though nothing is expected from the rate announcement, the press conference is likely to provide a lot of fodder for the markets. It is widely expected that there would be definitive plans for tapering towards the end of summer and until then, the tapering talk is likely to dominate the markets. If the tapering does happen, the stock markets are likely to be under severe pressure and we are already beginning to see the effects of that so far.

Oil Consolidates

Oil prices struggled to make much headway over the last 24 hours due to a surprising build in the inventory data as shown in the API data from the US. The oil prices have been rising steadily over the last couple of weeks or so and this has helped the market to stabilise. We believe that this strength is likely to continue in the near future and any kind of correction is likely to be pounced upon by the bulls and they are likely to accumulate several buys in the oil contracts. The production has been steadily increasing with Nigeria and Libya leading the way and this has basically negated any kind of gain that can be seen by the production cut from the OPEC members. It remains to be seen what would happen in the Middle East in their standoff with Qatar and that is likely to shape the short and medium term direction.