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April 6, 2016

Surprising EIA data boost crude, triggers Dollar selloff. Global markets turn the corner.

Surprising EIA data boost crude, triggers Dollar selloff. Global markets turn the corner.

After a step back made by global markets yesterday the growth was resumed today mainly due to upsurge on energy market. Oil futures resumed growth, boosted by surprising API crude inventories report which received confirmation by EIA release. WTI gained 4.35% and keeps on growing, Brent futures added 4.83% erasing yesterday losses.

EIA weekly account showed crude inventories in US shrunk 4.94M barrels to 529.9M total reserves on the week ending 1 April. Analysts surveyed by Bloomberg expected crude reserves will renew records rising by 3.2M barrels.

A prime of crude rebound was API release in Tuesday forecasting a decrease by 4.9M barrels.  The comments of Kuwait representative in OPEC claiming Doha meeting will have the freeze deal in results  also provided a leg up for prices. Prices managed to rebound from $35.50 vicinities to 37 level, then saw a powerful push to $38 by EIA report.

The upsurge in crude didn’t pass unnoticed on currency markets. USD/JPY saw abrupt breakout to 109.50 level, retreating to 109.70 level, EUR/USD soared to 1.14300 struggling for further advance, USD/RUB fell 0.90% below 68 level, AUD/USD benefited from fragile Dollar gaining 0.8%. The confirmation from EIA was a “big trigger” for markets, signaling the turmoil is over and investors can resume bidding to risky assets. We will probably see expansion on European equity markets tomorrow amid rallying commodity shares which will drag the gauges up.

US Stocks halts three days losing stretch on news US government bars $160B takeover of Allergan by Pfizer as well as pickup on crude market. S&P 500 gains 0.61%, Dow 30 adds 0.39%.

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