Afternoon Market Update – 12/12/2016 – by Jaz Singh

Crude oil leads the way this morning after Saudi Arabia announced it will lower output by more than previously suggested. As a result we’ve seen crude gain some 5 percent this morning, with WTI coming off the highs of $54.50 in more recent trade. Oil-producing currencies lead the gains in FX markets off the back of this news, with USDCAD dropping to the 1.31 handle before finding support. EURUSD has again flirted with the 1.06 level after being well sold at the end of last week. The greenback is in fact weakening against all its major counterparts this morning with the dollar index finding itself in negative territory. Perhaps this move is a pricing in of a potential ‘dovish hike’ from the FOMC this week. Profit taking seems to be taking precedence in the equity space today, following a rally in European bourses since the Italian referendum and the ECB last week. After finding support at the 11150 handle the DAX is now some 50 pips from its intraday high. US stocks show a similar story with S&P500 futures down 0.2 percent. The data slate is light this afternoon with no major announcements on the cards.