Daily Wrap Up – 31 May

31 May 2017 05:50 PM

By the end of May, Asian stocks capping a fifth consecutive month of gains as Chinese factory activity data showed steady growth to ease market fears about the slowdown of the world's second largest economy. China's manufacturing sector grew by 51.2 points in May.

Moody's comments showed the improving outlook for global growth in 2017 appeared sustainable as some of the biggest risks to the developed economies seem to have subsided.

A poll released today in the United Kingdom that showed the Conservative Party could not win the majority in next week's election has led the pound to ease rapidly against the US dollar to its lowest level in almost a month at 1.2775. But the pound erased those losses after another poll showed that the Conservative Party still in the lead.

In Eurozone, initial inflation figures fell to 1.4% in May from 1.9% in April. The figures were mainly affected by energy prices. With recent inflation readings improving but still below the ECB target of 2%, this persistent rise in inflation puts pressure on the ECB to start tapering. The euro rose markedly after news from some unnamed ECB officials that the bank was preparing to ease its easing policy at the next meeting.

In the oil market, prices fell dramatically as news that Libyan output recovered from a technical problem increased the risk of OPEC's recent cut in production. Oil is currently trading at  47.75$ a barrel after breaking a significant support level of  48 $. While Brent crude is trading at  50.36$ per barrel.

Gold recovered after stabilized higher than important support level at 1259 $ per ounce, and is now approaching the levels of 1270 dollars.

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