Daily Outlook

Global equities recovered overnight driven an improvement in risk-sentiment, supported by gains in oil prices. The market continues their speculation on oil direction as oil made strong gains ahead of an upcoming meeting between major oil producers in March. WTI jumped over $1.50 to $33.06/bbl while Brent is currently trading at $33.56/bbl. Venezuelan oil minister Eulogio Del Pino announced his country, Saudi Arabia, Russia and Qatar have agreed to meet in March, further discussing the potential for a production freeze. Despite these negotiations to freeze production at January highs, Iran refuses to limit production without special considerations. Until we see commitment from Iran and Iraq, chances of a trend reversal are limited.

European equities struggled this week, as fears surrounding Britain’s exit of the EU rattled the market. Despite this, European equities managed to close well in the green overnight, with the DAX and FTSE up 2.38% and 1.79% respectively. US equities closed upwards of 1.1-1.3% higher off the back of Energy sector gains and stronger than expected Durable Goods data.

Gold continues to act as a rollercoaster ride as the positive/negative sentiment in equities has been shifting frequently in recent days. GOLD ‘s negative correlation with Stocks has the metal hovering around $1235. Traders should be weary of significant fluctuations as the yellow metal has been experiencing +/- $10 swings lately.

Oil and Gold aren’t the only commodities currently experiencing wild price movements. Sugar futures surged 9% on Tuesday, posting their biggest gain in New York since 1993. The surge can be attributed to a number of factors, including; Argentine port delays, a squeeze on European white sugar exports and a projected increase in the world output deficit by the International Sugar Organization. ANZ bank analysts still believe sugar has more upside as the world production deficit worsens and funds cut their net long positions.