Financial market research and analysis

Oil tanked as Iraq said to boost its oil exports by 5% in the next few days. Lower oil prices weighed on investors’ sentiment as WTI and Brent traded 1.40% and 1.65% respectively down in Asia. Solid hopes of an agreement, or at least a hint to freeze the output from the OPEC’s informal meeting due in September, should keep the downside limited in the price of a barrel of Brent at $48 and WTI at $45.

The FTSE opened downbeat on lower oil and metal prices. It rallied past 6870p shortly after the open, and is currently sliding lower off the intraday spike. High volatility in the FTSE is a sign of stress, as UK stocks trade under rising selling pressure since last week. Traders remain sellers on rallies.

Miners and energy stocks are leading losses, hinting at another bearish session despite aggressive upside attempts.

Glencore (-2.15%), BHP Billiton (-1.66%), Rio Tinto (-1.29%), Anglo American (-1.92%) and Randgold Resources (-1.98%).


Jackson Hole in focus

The US dollar strengthened across the board on hawkish comments from Fed’s Fischer. Fischer, who is known as one of the most hawkish voting members in the FOMC, said the Federal Reserve (Fed) could hike rates in 2016 as the central bank is getting close to meeting its mandate targets.

All eyes are shifting to FOMC Chair Janet Yellen’s speech on Friday at Jackson Hole Symposium. Should Janet Yellen sound as confident regarding the US economic fundamentals, the expectations of a 2016 rate hike could gather some enthusiasm.


Fitch cut Turkey’s outlook

Fitch maintained Turkey’s sovereign rating at BBB-, which is the lowest investment grade rating, yet cut its outlook to negative after the failed coup attempt destabilised the country’s political and social environment.

The Turkish lira started the week 0.63% lower against the US dollar. The Central Bank of Turkey will announce its rate decision on Tuesday, and is expected to lower the overnight lending rate by another 25 basis points. Higher country specific risks, combined with a dovish central bank strategy and a stronger US dollar should pave the way for further lira depreciation.