FxPro: False oil rebound?
December 28, 2018 @ 16:05 UTC
On Monday Brent updated the multi-month lows by falling more than 5%. On Tuesday, when most of the markets were closed for the Christmas celebration, Oil lost another 10%. Meanwhile, global stock indices collapsed to multi-month lows in never seen before mode, so rebound in second half of the week looks more inspiring.
Indeed, the rise since December 26 is quite impressive: The Dow Jones index has jumped by 1000 points for the first time in history and has added more than 7% till date. This phenomenal situation immediately formed the expectation that we saw a strong rebound, which will become a long-lasting reversal.
The FxPro analyst said that for now, it is looks more like a short-term rebound in the absence of large players. The pre-New year market always reacts on the news rather sharply, as there are fewer investors and more speculators on exchanges. However, by the end of the holidays, market is going to return at the levels, where the rapid movement has began.
Only by the beginning of the new year and the return of major players to the markets we can talk about the formation of a new trend or development of the old one.
So, oil and stock market may return to a decline in first weeks of 2019th, if there are no sudden news of rising demand and accelerating global growth, or if OPEC+ not going to announce a sharper decline in production.
Alexander Kuptsikevich, the FxPro analyst