While everything was awesome last week (apart from the last 10 minutes), it appears lower oil prices this week (WTI just crossed back below Brent's price and under $37 once again) is not "unequivocally good" for US equity markets. Following the bloodbath in China's "B" Shares overnight, traders are hoping this pain will stop once the machines "get back to work" at 930ET...
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If this holds, S&P 500 will open back in the red for 2015.
As Bloomberg reports,
Oil in New York falls from 3-wk high as Iran repeats goal of boosting supplies after lifting of sanctions.
Iran’s priority is to boost oil shipments to pre-sanction levels once restrictions are lifted, IRNA reports, citing Oil Minister Bijan Namdar Zanganeh
Country plans to add 500k b/d of exports 1 wk after sanctions lifted, says Rokneddin Javadi, deputy oil minister and head of NIOC, accord. to Shana news agency
“If Iran is able to immediately add 500k b/d of exports, then that will become a huge factor which will push down oil prices in the first half of next year,” says Hong Sung Ki, senior commodities analyst at Samsung Futures. “That decision together with lower demand for heating oil and steady U.S. supplies are poised to be bearish factors for the mkt”
Which has knock-on effects on commodity currencies with the Ruble near record lows against the USD and NOK/SEK at 23-year lows.
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Charts: Bloomberg
