Morning Market Overview
Oil prices declined for the second day in a row after an overall bearish weekly inventory snapshot issued by the EIA earlier Wednesday. The complex has now given back all last week’s gains and are now adding to the losses over the three-week’s proceeding last week. The market is struggling to remain focused on the geopolitical production loses as well as what might happen if there is no resolution to the US sanctions on Iran.
Further on the negative side is the news that President Trump is now ready to issue 25 percent tariffs on $200 billion of Chinese imports which will certainly escalate the scope and the potential for a full blow trade war as China is almost certain to retaliate to such an action by the US. As we have been indicating the market sentiment is changing on short notice with each and every 30 second news snippet and tweet. On the financial front global equity markets were mostly lower.
The EMI Index was lower or eight of the ten bourses in the Index. The EMI Index decreased by 0.16 percent on the day with the year to date gain at 0.9 percent. Six 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.