European stocks are still being struck by volatility, and investors continue to be anxious about the Huawei CFO’s arrest dimming US-China trade talks, which prompted the European Commission to express concerns about the risk of unauthorized data collection by Chinese technology companies in Europe.Meanwhile, given the recent US economic statistics, traders believe that the Federal Reserve will likely be flexible on plans to ratchet up interest rates in 2019 after this year’s 3 hikes, with the rate raised first in March, then in June, and then in September. Still, a fourth rate hike is expected to happen, and the FOMC meeting on December 18-19 is the likely occasion. So far we don’t know the number of interest rate hikes the Fed has projected for 2019. Though 3 hikes were planned, the regulator might decide to reduce the number should the economy worsen.The oil market was somewhat eased by the OPEC+ announcing the oil output to be cut next year, with the aggregate global oil supply to be reduced by 1.2 million bpd for 6 months starting January 2019 as agreed in the OPEC+ ministers’ meeting, with the OPEC countries to slow down their oil production by 800k bpd, and the supply from the non-OPEC countries to be cut by 400k bpd.
As news and expectations remain mixed, the European markets are likely to remain very volatile in the offing. Financial scouts are confident that traders will continue to feel uneasy about the global developments.
Ivan Marchena, Libertex Analyst