Price of oil shoots through $40 a barrel

Currencies Direct March 8th 2016 - 2 minute read

After rumours of fruitful talks between Opec and Russia regarding oil production, the price of Brent crude shot through $40 a barrel. It looks like a deal will be agreed shortly, which may see a cap on how many barrels of oil a country can produce in a set period. The one issue appears to be with Iran, as they have just come out of their own trade embargo globally, and they intend to make up for lost time in over producing moving forward. Other commodities jumped on the tail of this, as Iron enjoyed a run of almost 20% on Monday.
 

All eyes on Draghi

 
Investors will be looking to Thursday and in particular how Mario Draghi tackles the latest deflation issues. The interest rates will be expected to be held, but another round of quantitative easing could be on the way, which could be welcome news for euro buyers. German Factory Orders slowed yesterday, with new orders dropping 0.1% in January. Germany is seen as the powerhouse of the EU and any weaker than expected data can sometimes send investors into panic mode if the figures are way off to expectations.
Today we have Eurozone Gross Domestic Product to digest, which is forecast at no change at 1.5% against previous figures.
 

Positive outlook for recruitment

 
A Recruitment report out yesterday showed that companies are looking forward with confidence regarding employment, with the majority of firms planning to recruit rather than release employees. This is the second quarter on the bounce and should breed more confidence in the market. The same report did show though, that the EU Referendum debate is still causing caution.
Today the Bank of England’s Mark Carney and Sir Jon Cunliffe talk about a potential ‘Brexit’ at a Parliament Committee event, so expect some short term volatility if either key note speaker states a too dovish tone.

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