Market Report & Analysis for 8/27/2018 Morning Edition

Morning Market Overview

After a strong day of gains Wednesday on a bullish crude oil inventory datapoint, the crude market traded either side of unchanged throughout most of the trading session Thursday. Trading activity was light as many in the trading community are likely taking their last shot of a summer vacation as the Labor Day weekend nears.

Not much new with market participants focused on the negotiations between the China delegation and the US trade envoy as they try to iron out an agreement and avert a full- blown trade war. On the external front the US dollar strengthened today after indications that the US Central Bank is likely to push interest rates higher at their next meeting. A rising US dollar is a positive for the oil complex.

On the other hand, equities were lower in many locations around the world which is adding to the negatives to the oil complex coming from the rising US dollar. On the financial front global equity markets were mostly lower. The EMI Index was lower for eight of the ten bourses in the Index.

The EMI Index decreased by 0.73 percent on the day (mostly driven by a large gain in Brazil) with the year to date loss at 1.2 percent. Five of the ten bourses in the Index are still in positive territory for 2018 with China still in the worst performing spot in the Index with Australia in the top spot with a 4.9 percent gain for the year.

The negative value direction in global equity markets was a negative price driver for the oil complex. On the currency front the US dollar Index is higher on the day with the Yen/USD and the Euro/USD lower. Overall the currency markets were a negative price driver for the oil complex.