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Lower energy markets

CMC Markets

Asia Pacific investors are looking at pressure across their portfolios after bonds and shares fell in overnight trading. The increasing likelihood that the US government will not deliver a stimulus bill before the November 3 election and signs of declining demand for petrol saw investors move to alternative markets.

Gold and cryptocurrencies are the major beneficiaries of nervousness about the global growth outlook. Spot gold is back above US $1,920, and any break above the previous high at $1,931 could spur further trader interest. Bitcoin led block chain markets higher. After trading through resistance near $12,500, it quickly cleared the $13,000 mark to trade at its highest levels in more than a year.

Energy shares are in the spotlight after a 4% tumble in crude oil prices. US weekly inventory data showed an almost 2 million barrel build in petroleum stores, raising concerns about weakening demand. Oil and gas producer Santos may help offset the gloom after reporting record quarterly production this morning.

With only 11 days until the US election there is little scope for both houses to pass a fiscal stimulus bill. Market consensus at the moment is that the Democrats will take the White House but not the senate, leaving sweeping reform unlikely. However any surprise moves from President Trump, or further gains for Democrats that mean they may take control of both houses, could prompt significant market moves.


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