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Oil price up 10% in 5 days!

Brent Crude oil – Daily Candlesticks
Source: GKFX / MT4 (November 25, 2020)

Brent has broken up from a down-sloping channel to reach its highest since March 6 when prices started dropping dramatically. The price is now just shy of $50 per barrel.
 

TAKEAWAYS


•    Oil price rises for 5th day – up 10% across 5 days
•    EUR/USD rises over 1.19 after ‘split’ FOMC minutes
•    Gold slides back to $1800 per oz
•    Slack stock gains 38% on talk of Salesforce M&A
•    DAY AHEAD: Thanksgiving, ECB minutes
 

MARKETS


*Daily closing price
↗ EUR/USD    1.1915        (+0.23%) 
↗ GBP/USD    1.3380        (+0.18%)
↗ USD/JPY    104.47        (+0.04%)
↘ S&P 500    3577.59    (-0.16%)
↗ Hang Seng    26,669        (+0.31%)
↘ Gold        1869.60    (-1.94%)
↗ Oil (Brent)    48.73        (+1.82%)
↘ Bitcoin    18,844        (-1.52%)
 

NEWS

 

FOMC split

Major currencies rose against the US dollar with EUR/USD rising back over big resistance at 1.19 after the Fed confirmed plans to keep rates low for the foreseeable future. However, there was a split of opinion about what to do about asset purchases. While some members of the Fed want to add to the program at the next Fed meeting in December, others raised concerns that doing so would bring about ‘unintended consequences’. Asset prices are being pumped higher by a deluge of central bank liquidity so any hint from the Fed that they are second-guessing themselves about QE is a risk-factor to Wall Street indices.
 

OPEC rally


The price of oil is on a tear, it has gained a third of its value in November alone and in just the last five days it has added 10% of that. The semi-annual OPEC meeting is this Monday (Nov. 30) and there has been suggestion that Russia and Saudi Arabia would delay tapering big output cuts. Constrained supply alongside renewed economic optimism after the election and vaccine news has spurred a big short-covering rally for oil prices. 
 

Megadeal: Salesforce / Slack


Cloud-computing giant Salesforce is reportedly in talks to buy work/office messaging app Slack according to the WSJ. No price has been discussed yet but Slack stock flew 38% higher, which if that were the enterprise value of the deal would amount to more than $20 billion. Salesforce stock is up over 50% this year and is using this extra value to buy growth via Slack. It would be one of the largest software deals in history alongside Facebook buying WhatsApp for $19 billion and Microsoft buying LinkedIn for $27 billion.
 

DAY AHEAD 


*Times in GMT
00:00 – US – Thanksgiving holiday
12:30 – Eurozone – ECB Monetary Policy Meeting Minutes
 

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