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Firing of the FBI director

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    2023/02/27
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Last week, there was a high volatility in the US stock market. The firing of the FBI director James Comey resulted in the correction of the main indices. By the end of the week, the market recovered amid the decrease of the political tension.

On Monday, it became known that Saudi Arabia and Russia supported the further restriction on oil extraction till the end of March, 2018. The July futures on Brent oil rose by 1.9% to $51.82 per barrel on London’s ICE Futures exchange. The Asian stock indices showed a growth after the announcement about the financing of more than $100 bn. for the Chinese infrastructure program. The Australian index All Ordinaries added 0.24% due to the growth of commodity stocks.

On Tuesday, the euro strengthened against the dollar. The market responded positively to the boost to supporters of the European integration Emmanuel Macron and German Chancellor Angela Merkel. It also became known that the Eurozone economy rose by 0.5% in Q1 according to the 2nd GDP estimate. The FTSE 100 index reached a record high, despite the strengthening of the pound, due to the inflation data in Great Britain, which showed that the rise in consumer prices for April exceeded the expected 2.5%.

The US stocks actively sold off on Wednesday. The market reacted to Donald Trump’s firing of the FBI director. The S&P 500 lost 1.8%. The ICE dollar index, which measures the US dollar against the basket of six major currencies, closed 0.85% lower at 97.372. The leader of the decrease became the financial sector (3% lower). The oil futures prices showed an increase-the crude oil inventories in the US decreased last week by 1.8 mln. barrels. The July futures on Brent oil rose by 1.1% to $52.21 per barrel on London’s ICE Futures exchange on Wednesday. However, OPEC considers further supply reduction next week.

On Thursday, the US dollar strengthened against the Russian ruble. The dollar-ruble currency pair showed an increase by almost 2% on the background of the oil price decrease. It also became known that the US manufacturing PMI rose by 70% against the April indicator. Most sectors of the US indices recorded gains- the tension regarding Russia’s intervention in the presidential elections dropped. The S&P 500 index added 0.37%.

On Friday, the Asian index Shanghai Composite advanced. Direct investments in April rose by 4.3% compared to April of the previous year. Oil prices updated the weekly high, trading above $53 per barrel for Brent. The market expects the final agreement on output cuts next week. The dollar index lost 0.7% amid the strengthening of the euro. The decrease of the political tension in the US resulted in the stock market rally- the S&P 500 index added 0.8%. The leaders of the growth were the companies of the energy sector.

This week until Thursday, positive dynamics on oil are expected. On Thursday, the final OPEC meeting is scheduled, where the extension of output cuts must get a final confirmation. No surprises are expected, but the confirmation of the market expectations may result in the further growth of oil futures prices. The reduction of oil inventories for the last week in the US is also expected, which will be published on Wednesday. The breach of the $57 per barrel level may be key for purchasing oil and maintaining positions up to the beginning of the cartel members’ meeting.

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