23 Feb

Germany’s business optimism is growing. Oil prices set new records

February 23, 2021

by JustForex

Economic expectations for the next six months rose from 91.5 in January to 94.2 in February, beating economists’ forecasts. The current conditions index rose to 90.6 from 89.2 a month earlier. According to the Institute, Germany’s economy is “divided” as not all sectors show sustainable growth. Manufacturing activity is strong while retail is on a weak side.

The German economy hardly escaped a downturn in the fourth quarter, but with shops and restaurants still closed, economists are expecting a recession in the first quarter of this year. The German government indicates that a larger slowdown in the spread of the coronavirus will need to be seen before considering easing restrictions. But as long as the manufacturing sector is a key source of economic resilience, the downturn in the first quarter should not be too big.

Meanwhile, investors’ attention is gradually shifting to the oil market. Brent has set a new record, slightly above $65.50. WTI nearly hit $63 a barrel, while investment banks and traders are forecasting further price increases. Morgan Stanley and Socar Trading SA see the opportunity to hit the $80 mark this year.

Oil rose sharply this year after Saudi Arabia pledged to unilaterally cut production by 1 million barrels per day in February and March. At the same time, Goldman Sachs Group predicts that growth will accelerate as global demand exceeds supply. However, next week, a new OPEC + meeting is expected, where new disagreements can be expected among the major oil-producing countries. The outcome of the meeting may change the direction of oil quotes.

Main market quotes:

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Important events:
  • – The Average Earnings Including Bonuses in the UK (Dec) at 09:00 (GMT+2);
  • – Changes in the UK Jobless Claims (Jan) at 09:00 (GMT+2);
  • – The Eurozone Consumer Price Index (CPI) (y/y) (Jan) at 09:00 (GMT+2);
  • – The US CB Consumer Confidence Index (Feb) at 09:00 (GMT+2).

by JustForex

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


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