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May 24, 2016

Crude scores win in Tuesday, European equities near monthly peaks with risk-hungry investors.

Crude scores win in Tuesday, European equities near monthly peaks with risk-hungry investors.

Wall Street opened Tuesday with gains paring losses from Monday. The growth is primarily fueled by banking sector as conviction grows Fed will go for tightening, what spurs risk appetite.
Dow 30 index rose by 1.29 percent while S&P–500 index gained 1.43 percent to 2.423, 98. Technology index Nasdaq added 2.01 percent. Wall Street displays the obvious move, following the rally on European equity market where FTSE closed with 1.35% gains, Dax + 2.18%, Euro Stoxx 50 2.5%, climbing to the monthly peaks.
Protocol of the meeting of 26-27 FOMC meeting published on Wednesday last week, showed that the regulator does not cross out new rate hikes from its “to-do” list, surprising investors who believed that the Fed will refrain from action until the end of the year.

Key event for this week is Janet Yellen speech on Friday where the Fed head will probably provide a lot of food for thoughts for investors trying to second-guess the authority decision in June, causing huge volatility moves on major USD pairs. Current odds of rate hike according to CME futures data is 30%.

Crude prices extend gains after a minor retreat on Tuesday as Qatar oil Minister and OPEC President Mohammed bin Saleh Al-Sada said in the interview that the oil market is slowly rebounding after falling sharply in the past two years, however, oil is still not trading at a “fair price“, which could stimulate the necessary investments. WTI rose 1.52% closing the spread with
Brent which gained only 0.99% to 48.81 as of the time of writing.

Al-Sada said that $ 65 per barrel is the lowest price, which is badly needed at the moment. He also believed that falling investment caused by falling prices, jeopardizing future supplies.
OPEC President gave an interview to the Agency AssociatedPress in the capital of Qatar, Doha in Tuesday. OPEC, an organization consisting of 13 oil producers is preparing for a meeting in Vienna next week.
Al-Sada did not rule out the resumption of the debate on freezing production by major producers, despite the failure of talks last month.

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