The move back into risk | 02 December 2022

#WTI:

Brent and WTI's market structure implies current demand is softening, with backwardation, defined by front-month prices trading above contracts for later delivery, having weakened markedly in recent sessions.For two-month spreads, Brent and WTI's structures even dipped into contango last week, implying oversupply with near-term delivery contracts priced below later deliveries. China, the world's top oil importer, reported a new daily record for COVID-19 infections, as cities across the country continued to enforce mobility measures and other curbs to control outbreaks. This is starting to hit fuel demand, with traffic drifting down and implied oil demand around 1 million barrels per day lower than average.

Trading recommendation: range 70.20 -75.00.

#SP500:

The U.S. Federal Reserve has raised interest rates aggressively throughout this year, but a substantial majority of Fed policymakers agreed it would likely soon be appropriate to slow the pace of interest rate rises, minutes of their latest meeting showed. This added to optimism from earlier this month when data U.S. October inflation was cooler than expected. Faith in the Fed pivot restored, investors ended the last week on a high, with the S&P 500 on course for a second monthly advance. The overall increase in risk exposure can be seen in a poll by the National Association of Active Investment Managers, where big-money allocators have boosted equity holdings close to their long term average.

Trading recommendation: Buy 3950 and take profit 4080.

#HSI:

China's central bank will offer cheap loans to financial firms for buying bonds issued by property developers, four people with direct knowledge of the matter said, the strongest policy support yet for the crisis-hit sector. The People's Bank of China hopes the loans will boost market sentiment toward the heavily indebted property sector, which has lurched from crisis to crisis over the past year, and rescue a number of private developers, said the people, who asked not to be named as they were not authorised to speak to the media. China has stepped up support in recent weeks for the property sector, a pillar accounting for a quarter of the world's second-biggest economy. Many developers defaulted on their debt obligations and were forced to halt construction.

Trading recommendation: buy 17200 and take profit 17650.