Morning Briefing: Oversupply weighs on oil, equities mixed

Morning Briefing: Oversupply weighs on oil, equities mixed

Morning Briefing: Oversupply weighs on oil, equities mixed Oversupply weighs on oil, equities mixed
The recent rally for oil prices is over with a further 1 per cent fall in prices overnight as oversupply concerns erase any hopes of a production cap. Goldman Sachs said Tuesday that the rally was overdone.

The bank’s assessment is that agreement between OPEC and non-OPEC members on a cap on output is not only unlikely but also won’t do much, if anything, to stabilize the volatile market.

Meanwhile, the CEO of Oil Search said that he does not see prices falling much further with the $45 to $55 a barrel range expected with rebalancing in the next 2 to 3 years.

Also remaining in focus Tuesday is the Jackson Hole speech by Fed chair Janet Yellen which is scheduled for Friday.

Asian markets closed mostly higher although thin trade was reported by many. Japan was the loser of the session as exporter stocks declined on a stronger yen.

European indexes have started Tuesday in positive mode with PMI data for the Eurozone which shows no sign of Brexit impact so far.

Wall Street and Toronto are expected to open higher.
 
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North America (previous session)
US Dow Jones 18,529.42 (-0.12 per cent) -0.22 per cent +12.57 per cent
TSX Composite 14,748.19 (+0.41 per cent) +1.01 per cent +9.46 per cent
 
Europe (at 4.30am ET)
UK FTSE 6,863.39 (+0.51 per cent) +1.97 per cent +10.92 per cent
German DAX 10,582.60 (+0.84 per cent) +4.29 per cent +4.52 per cent
 
Asia (at close)
China CSI 300 3,341.83 (+0.15 per cent) +3.62 per cent -6.90 per cent
Japan Nikkei 16,497.36 (-0.61 per cent) -0.78 per cent -15.12 per cent
 
Other Data (at 4.30am ET)
Oil (Brent) Oil (WTI) Gold Can. Dollar
48.57
(-1.20 per cent)
46.79
(-1.31 per cent)
1344.00
(+0.04 per cent)
U$0.7744
 
Aus. Dollar
U$0.7644

Iron set to cool says Citi
Iron ore prices have continued to gain in 2016 even while other commodities have slumped. But analysts at Citi Group are warning that the rally for copper will not last.
The 40 per cent rise in prices have been good news for miners and investors but Citi’s report released Tuesday warns “Structurally the world remains oversupplied with relatively low-cost material.”