Summary:

  • Oil holds firm above the $70 handle (WTI) and $75 handle (Brent)

  • European investors launch new week in good moods

  • Bitcoin tests support level at $9300

European trading on Monday has been calm so far and a little subdued thanks to the lack of UK traders (banking holiday). One of the readings released today and worth looking at could be Swiss CPI reading that came in at 0.8% YoY, slightly below the estimated 0.9% YoY. Russian, Portuguese and Polish stock indices are top gainers from the Old Continent. British pound is the strongest currency in the G10 basket while the Swedish krone is depreciating against all its major peers. Precious metals trade lower on the back of the USD strengthening while oil surges almost 1%.

May 12 could  be a crucial day not just for oil prices but for the broad markets in general. Donald Trump has just 5 days to decide whether to stop waiving sanctions as agreed under the Joint Comprehensive Plan of Action. A return of sanction on Iran could cause a spike in oil prices as 1.3mbd of output would be at risk.

Warren Buffett’s remarks drew attention over the weekend as the famous fundamental investor dubbed Bitcoin “rat poison” admitting at the same time he did not understand the blockchain technology. He alluded to cryptocurrencies during the Berkshire Hathaway 2018 annual shareholder meeting in Omaha, Nebraska on Saturday.

Italian President Sergio Mattarella has begun the final round of government talks today. A meeting between the President and representatives of the political parties is a last call towards forming a new government. In case the talks fail to deliver a solution to the ongoing political deadlock Mattarella may ask parties to form a transitional government with non partisan PM.

On the currency front we can conclude that the Australian dollar has been by far the weakest currency so far losing almost 0.3% against the US dollar which has begun this week’s trading a bit lower. The Antipodean currency could have been afflicted by weak construction PMI for April as it slid to 55.4 from 57.2.

Oil prices saw another multi-year high at the beginning of May amid a tense geopolitical situation that could lead to a deficit of the commodity. This week could be absolutely crucial for oil prices as president Trump will decide on the future of the Nuclear Deal with Iran.