Market Round Up: OPEC Shenanigans ⛽  FinReg Race to the Bottom 🚳

by | 3 Oct, 2018

 

1. OPEC Shenanigans

Seems there has been a lot of crying wolf lately, especially from President Trump, about how OPEC refused to heed the need to increase output. Well (no pun intended!), rumour has it that Russia and Saudi Arabia have quietly struck a deal to slowly raise production.

It would appear that the Saudis are looking to keep well output balanced ahead of the sanctions being imposed on Iran. Its crude production rose significantly to 10.7 million barrels a day. It is quite likely that Trump’s warnings of ‘consequences’ both directly to Saudi Arabia and OPEC overall, did not fall on deaf ears.

Signals are bearish for oil prices as U.S. reserves are also building up. However, supply concerns will remain a key driver for the time being. Oil prices hit four-year highs yesterday just as the U.S. State Department accused OPEC of withholding 1.42 million barrels a day of spare capacity from the world market.

Related: Market Round Up: FANGs Reclassified 🏁 – Oil Be There ⛽

 

2. FinReg race to the bottom

According to the latest report from the International Monetary Fund (IMF), reform fatigue is risking financial instability at a time when disruptive technologies are revolutionising change in the industry and regulators struggle to keep pace.

According to the report “a rollback of reforms could spawn opportunities for regulatory arbitrage (between financial centres) and lead to a race to the bottom in regulation and supervision.” It singled out ultra-low interest rates and surging debt levels as potential triggers for another meltdown.

The IMF also said past actions by central banks, in particular the U.S. Federal Reserve and the European Central Bank, to bail out institutions and stimulate economies through quantitative easing would not be possible in managing any new crisis. “Some of the tools used back in 2008 are no longer available, suggesting future rescue options just wont exist.

Former British prime minister, Gordon Brown, warned of complacency, saying he feared the world economy was “sleepwalking into a future crisis”.

Related: Market Round Up: China riding a black swan ☁ – Tech stocks ying and yang 🙏

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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