Crude oil draws the most attention in the market overnight by fully recovering from the pullback in Asian session and reaching a four-month high. The reverse from downtrend started in late European session and the rise went wild throughout the whole NY session. WTI surged to above $44/barrel, the four-month high, and is now trading at $43.8/barrel. A strong support level at $41.5 helped to limit the downside, with a bullish US EIA weekly oil inventories data showing further support to boost oil prices. Investors now expect a climbing oil price, as Iraq Vice Oil Minister confirmed the rumour that the second oil meeting might be held in May to discuss the possibility of oil production freeze.
Given the strength in oil, risk appetite continues to rise and another rally was seen in commodity market. Iron ore price has risen for another day and hits its 10-month high at $64.3. The increase demand from China steel mills to restock their raw material in order to take advantage of the higher steel prices definitely contributes to recent rocket in Iron ore price. Early this week, Australian biggest iron ore miners BHP and Rio Tinto joined to cut their iron ore production target of 290 million tonnes until at least the financial year of 2018, expecting to extend the rally in the iron ore price that makes up the largest portion of Australian export.
A better-than-expected US existing home sales for March offsets the passive housing starts and building permits data yesterday. USD boosted against most of the major currencies, with Dollarindex rising by $1 and is trading at $94.5 at the time of writing.
ECB decision on minimum bid rate and the following press conference will be the main event today. We expect to see the rate to stay the same with little change on Draghi’s commentary on the monetary policy.
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