To grow or not to grow?
Oil came off further yesterday at one point below $130 a barrel.
Rather than being a reduction in demand for oil it seems more centred on US sentiment that they would dip into their own strategic supply if necessary. On the back of this drop, the US Dollar made gains and the Dow Jones recovered somewhat, moving away from bear market country.
Oil was not the only mover with natural gas coming off recent highs to levels not seen since early May. It was also a much better day for equity markets with house builders and banks both making gains from their previous deflated levels.
Today we have seen the German Producer Prices Inflation figure which reported the highest rise in 26 years. As with other global PPI increases, this sharp rise is again on the back of high commodity and energy prices.
Since the release of the figures, Trichet has been talking about the lack of sustainable growth within the EuroZone now being the main focus.
This is starting to become a common trend amongst Central Bank Heads with Bernanke, King and now Trichet all indicating that they are not looking to try and manipulate inflation in the short term (a futile exercise anyway) but to concentrate on ensuring that growth is the immediate focus.
On the currencies Dollar sentiment is still somewhat tarnished as confidence in the US remains frail. The Fed's reluctance to increase rates, even with inflationary pressures, will have a knock-on effect on the Greenback.
As there is no data out from the US the main focus today will be the Dow Jones opening and the effect that Merrill Lynch's numbers release will have.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Rather than being a reduction in demand for oil it seems more centred on US sentiment that they would dip into their own strategic supply if necessary. On the back of this drop, the US Dollar made gains and the Dow Jones recovered somewhat, moving away from bear market country.
Oil was not the only mover with natural gas coming off recent highs to levels not seen since early May. It was also a much better day for equity markets with house builders and banks both making gains from their previous deflated levels.
Today we have seen the German Producer Prices Inflation figure which reported the highest rise in 26 years. As with other global PPI increases, this sharp rise is again on the back of high commodity and energy prices.
Since the release of the figures, Trichet has been talking about the lack of sustainable growth within the EuroZone now being the main focus.
This is starting to become a common trend amongst Central Bank Heads with Bernanke, King and now Trichet all indicating that they are not looking to try and manipulate inflation in the short term (a futile exercise anyway) but to concentrate on ensuring that growth is the immediate focus.
On the currencies Dollar sentiment is still somewhat tarnished as confidence in the US remains frail. The Fed's reluctance to increase rates, even with inflationary pressures, will have a knock-on effect on the Greenback.
As there is no data out from the US the main focus today will be the Dow Jones opening and the effect that Merrill Lynch's numbers release will have.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
Labels: Oil, oil-prices
posted by Wise Money @ 9:46 AM
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