Bullish rally in the oil market | 12 March 2021

#WTI:

The meeting saw OPEC+ mostly rolling over its production cuts into April, and Riyadh extending its voluntary 1 million barrels per day curb by one more month. Russia which had publicly called for higher output was allowed to hike production slightly, along with Kazakhstan. Countries such as Iraq and the United Arab Emirates, which at previous meetings had favored production hikes, did not raise any objections this time, sources close to the matter said. OECD oil stocks in December were around 140 million barrels above the latest 5-year average, the latest OPEC data shows. The OPEC + deal will have a positive impact on the reduction of oil reserves.

Trading recommendation: buy 64.90 and take profit 66.10.

#SP500:

U.S. Treasury Secretary Janet Yellen said higher long-term Treasury debt yields were a sign market participants were anticipating a stronger recovery, not of increased inflation concerns. "I don't see that the markets are expecting inflation to rise above the 2% inflation objective that the Fed has as an average inflation rate over the longer run," Yellen said in a PBS. She added the United States needs faster job growth than seen during February, but can reach full employment by next year with President Joe Biden's $1.9 trillion stimulus plan in place. This is a positive signal for the US stock market.

Trading recommendation: Buy 3820 and take profit 3915.

XAUUSD:

Gold’s tumble this week was driven by the same phenomenon of the past two weeks — surging bonds yields and the dollar. Yields and the greenback soared anew this week after Federal Reserve Chairman Jerome Powell said the central bank was unlikely to step up bond buying to tame fears of a sudden inflation spike from an U.S. economy increasingly becoming unshackled from the Covid-19 pandemic. The yellow metal has fallen from grace since August, when it hit record highs of nearly $2,090. Losses in gold have accelerated since the November breakthroughs in Covid-19 vaccines.

Trading recommendation: sell 1721 and take profit 1685.