Delta variant and inflation fears weigh on sentiment, OPEC + deal sinks oil

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This is what you need to know to trade today Monday July 19:

Global markets are on the defensive from a mix of concerns about the spread of the Delta variant of covid and concerns that inflation would force rate hikes. OPEC + agreed to increase production after lengthy talks and the UK reopens.

Risk: Stocks are in retreat, extending Friday’s slide that was partially triggered by disappointing consumer sentiment numbers. Data from the University of Michigan showed that buyers are less confident and expect higher inflation. At the beginning of last week, consumer prices surprised to the upside.

10-year US Treasury yields They fell below 1.30%, but the dollar has not taken full advantage of it. The Japanese safe-haven yen is making headway, despite concerns about the safety of the Tokyo Olympics, which begin on Friday.

The Delta strain of COVID-19 it continues to spread rapidly around the world, adding to the gloomy mood, with the Aussie standing out with a drop below 0.74. The lockdowns in Sydney and Melbourne cause economists to lower their economic forecasts and oppose estimates of when the Reserve Bank of Australia will raise rates.

Petroleum: Saudi Arabia and the United Arab Emirates resolved a weeks-long quota dispute and agreed with their OPEC + members to increase production by 400,000 barrels per day. WTI crude fell to $ 71 after the deal was announced.

The GBP/USD hovers around the region of 1.3750 while the UK removes almost all covid-related restrictions on “Freedom Day”. However, Britain has been reporting a high level of around 50,000 cases per day and many people have been called upon to self-isolate after coming into contact with infected people.

The EUR/USD it clings to 1.18 as speculation mounts ahead of Thursday’s European Central Bank decision, the first under the new ECB framework.

The cryptocurrencies They have consolidated around lower levels, with Bitcoin pressed below $ 32,000 and Ethereum hovering around $ 1,900.

The oro it is declining, but remains above $ 1,800, not benefiting from the cut in Treasury yields.

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