Crude oil prices declined in early trading after OPEC+ members reached a deal to increase production gradually as oil prices rise. The members will add about 400k barrels a day every month from August and then ramp it up by about 2 million by the end of the year. The members will then accelerate the increases. The increase is a sign that the members fear that the global recovery will not be as strong as expected. The new deal came after weeks of disagreements between Russia, Saudi Arabia, and the United Arab Emirates. The deal is a victory for the UAE since it will award higher production baselines to countries like Saudi, Russia, and Kuwait.
The global equities sell-off accelerated in early trading as investors waited for key corporate earnings. Dow Jones and S&P 500 futures declined by 200 and 20 points while futures tied to the DAX and FTSE 100 indices dropped by more than 0.50%. The decline happened as investors started pricing in an eventual cooling of the American economy after it recorded a stronger recovery in the first half of the year. Later this week, the indices will react to the latest corporate results from companies like J.B Hunt Transport Services, AutoNation, IBM, Ally Financial, Sleep Number, Netflix, and UBS.
The wave of mergers and acquisitions is set to increase. Last week, the Wall Street Journal said that Intel was considering making a move on GlobalFoundries, a company that manufactures chips for other firms. And during the weekend, Zoom Video said that it will spend $14.7 billion in stock to acquire Five9. Five9 is a cloud company that provides solutions in contact centers, artificial intelligence, and employee management. The acquisition is part of Zoom management’s desire to expand its business since growth in video communications is expected to slow down as the world economy reopens.
XBRUSD
The price of Brent declined to $72.82 after OPEC+ members reached a deal to add a production. This price was substantially lower than the year-to-date high of 78.50. On the four-hour chart, the pair’s 25-day and 15-day moving averages have made a bearish crossover pattern. The MACD and Commodity Channel Index (CCI) also kept falling. Additionally, the price is at the same level as the important support since it struggled to move below this level on July 8. Therefore, the pair will likely keep falling as bears target the next support at 70.
EURUSD
The EURUSD was little changed as traders started to refocus on the upcoming European Central Bank (ECB) decision. It is trading at 1.1800, where it has been in the past few days. The price has moved below the 25-day and 15-day moving averages. Other technical indicators like the MACD are at a neutral level. It has also formed a small channel shown in yellow. Therefore, the pair will likely remain in this range today.
NDX100
The Nasdaq 100 index futures declined to $14,635 as the earnings season continues. The pair broke out below the 25-day and 15-day moving averages while the RSI and MACD indices kept falling. The index also formed a double-top pattern. Therefore, there is a possibility that it will keep falling as bears target the next key support at 14,500.
