Monday, 4 April 2016

Rallies in oil and Asian currencies may be over

After the strong rallies in various markets in recent weeks, doubts are beginning to surface about their sustainability.

Bloomberg reports the reversal in oil prices last week:

Money managers lost faith in oil’s recent rally as doubts grew over whether major producers will be able to agree on an output freeze.

Futures in West Texas Intermediate oil retreated last week for the first time since mid-February...

Short positions on West Texas Intermediate crude, or bets that prices will fall, rose the most since November in the week ended March 29, according to U.S. Commodity Futures Trading Commission. The liquidation of shorts during the prior seven weeks was the largest on record.

Asian currencies face similar skepticism, reports Bloomberg:

It’s time to sell Asian currencies after their best monthly rally in more than seven years, according to Goldman Sachs Group Inc.

The currencies will resume declines as further easing in China and Japan is likely to push the yuan and yen to their weakest levels since at least 2008, says Kamakshya Trivedi, a strategist at the bank who correctly predicted in November that emerging markets would recover in 2016.

No comments:

Post a Comment