Overnight, OPEC+ decided at a meeting yesterday to cut oil production by 2 million barrels per day in a move to ‘stabilise oil prices’. This move will actually help Russia fund its war in Ukraine if a price cap is not imposed on Russian oil and it will also push already high oil prices, higher.
What to watch today:
- Taking a look at global markets, the US markets experienced an early rally before closing the midweek session lower across the key indices with the Dow Jones losing 0.14%, the S&P500 shedding 0.2% and the tech-heavy Nasdaq closing the day down 0.25%. The sell-off on Wednesday ended the US markets’ best two-day streak in more than 2-years. The short-lived rally was ended by ongoing investor concerns over the impact rising interest rates will have on both the economy and markets moving forward.
- Adding to investor fears were warnings made yesterday by the World Trade Centre that high energy costs and rising interest rates would fuel a sharp slowdown in global trade next year.
- The global rally from earlier this week also ended in Europe and the UK overnight with Germany’s DAX losing 1.21% and the French CAC closing just under 1% lower on Wednesday.
- In the UK the FTSE100 also faced a sell-off, closing the midweek session down nearly half a percent.
- New Prime Minister Liz Truss closed her party’s annual conference on Wednesday with a pledge of ‘growth, growth, growth’ for the British economy.
- Looking at commodities, Brent crude, the global benchmark of oil, is up 1.9% to US$93.5/barrel following the decision by OPEC+ to cut oil production, gold is trading 0.52% lower at US$1717/ounce, and iron ore is trading flat at US$98/tonne.
- ASX futures are expecting the local market to follow the overnight global sell-off, anticipating an open down 0.4% on the ASX today.
- On the economic data front for today, Australia’s trade balance data will be released at 10:30am Australian Eastern Daylight time, which will detail whether Australia’s trade surplus continued declining in August. The market is expecting a rebound in trade surplus to $10.1bn.
- Trading central has identified a bullish signal on Brainchip (ASX:BRN) following the formation of a pattern over a 41-day period, which is roughly the same amount of time the share price may rise from the close of $0.91 to the range of $1.26-$1.34 according to standard principles of technical analysis.
- And Trading Central has also identified a bullish signal on Bowen Coking Coal (ASX:BCB) following the formation of a pattern over a 21-day period which is roughly the same amount of time the share price may rise from the close of $0.35 to the range of $0.46-$0.48 according to standard principles of technical analysis.