Sell-Off Ramps Up ahead of OPEC
• Investors head for the hills, as Crude and indices plummet
• OPEC meeting unlikely to help Oil prices
• Volatility expected to rise as risk events come thick and fast
June has started with less of a bang and more of a pop today, as
investors were sent packing towards havens and away from the risk assets
that have been so reliable of late. The raft of high profile events
that casts a shadow over this week was always likely to drive
significant volatility, yet today’s sharp sell-off will have caught many
by surprise.
Yesterday’s comments from the UAE minister paved the way for today’s
sharp devaluation in Crude prices, with his optimism highlighting the
fact that the Saudis are unlikely to face much opposition this time
around. It is clear that the US is finally beginning to feel the pinch,
with Crude output falling steadily. However, amid rising output
elsewhere and a highly nimble shale industry, there is a good chance
that just when prices recover, so does production. In that sense, the
days of $100 a barrel could be behind us.
Today’s economic releases were largely dominated by the manufacturing
sector, which for the likes of the UK and US are not necessarily a make
or break sector for growth. However, tomorrow is a different beast, with
OPEC, ECB, Carney, Crude inventories and UK construction all under the
microscope. It is clear that while today seems to have been a
particularly volatile day, this could just be the beginning.
