Calm returns

CMC Markets

After a week of higher volatility calm returned to markets in overnight trading. A bounce in European shares, support for base metals and energy, and bond selling, point to higher confidence around growth prospects. Sentiment rose despite a lack of news on the trade negotiations. The calm could indicate a coming truce, or may prove to be the eye of the trade hurricane.

OPEC agreed to formalise the production cuts of around 500,000 barrels per day that it observed informally over the year. The agreement of the OPEC+ group is required, and there are no details on which members suffer the reduction. Nonetheless oil prices lifted from already higher levels.

The US dollar continued its recent slide, and gold rose, suggesting not all investors are convinced that a trade deal will arrive before the 15 December deadline for increased US tariffs on Chinese goods. The immediate potential market-trigger is tonight’s US non-farm payrolls. Expectations are centred on an increase of 190,000 jobs.

Cryptocurrencies marked time.

Asia Pacific share markets are set for modest opening gains. After trading above average volumes in the sell down in the first half of the week, volumes dropped in yesterday’s rally. The lack of buyer conviction could see pessimism return during today’s trading session.