OIL PRICE JUMP BOOSTS EQUITIES WITH DOLLAR UNCERTAIN

A boost higher in the oil price has helped to give market sentiment another shot in the arm and has propelled Wall Street into new high ground. With the bi-annual OPEC meeting next week, the newsflow over the implementation on production cuts/freezes will ramp up. Yesterday’s optimism over the production cut helped to pull oil sharply higher yesterday and the move has continued today. The move helped to pull the S&P 500 into all-time high ground yesterday, with the VIX Index back below 13 and its lowest since 7th October. It will be interesting now to see if this can filter through to other markets such as the DAX which has struggled for months around its key 10,800 resistance area.  With Treasury yields consolidating, there have been signs in the last day or so that the dollar run higher is struggling to maintain its impetus and there are key markets such as EUR/USD and USD/JPY that are looking susceptible to a retracement. The dollar has reacted positively today but the next move is uncertain, which could encourage profit-taking.