As markets are reopening on Sunday following the New Year’s holidays, Oil prices climbed 3% higher but remain close to eleven year lows still. Saudi Arabia’s execution caused anger in Iran creating big geopolitical tensions. The regional anger pushed Brent Oil up to $38.37 and Crude Oil to $38.21. It is speculated that Oil companies might look to merge or acquire competitors in 2016 if necessary for growth.
The US dollar ended 2015 with almost 10% annual gains, while the Dollar Index was up 9.3%. Gold on the other hand closed the year 10% lower for a third consecutive time as it was highly influenced by the US monetary policy and strong dollar. During Sunday’s opening not much movement was seen across major currencies; with the US dollar holding its ground as investors are looking into the Fed’s outlook for 2016, and the euro not much changed from last year’s $1.087 (Thursday). Only the Swiss franc indicated some gains in the first couple of hours into 2016 with EURCHF down to 1.08451.
The outlook for stocks shows a possible boost this month due to the “January effect” as investors sold off their stock holdings in December because of taxation and will probably buy them again at lower prices now. Wall Street in particular ended 2015 right around where it started, having it’s flattest year since 2011.
Coming up on Monday are the British ISM Manufacturing PMI data due at 09:30 GMT followed by the US one at 15:00 GMT. Holidays will continue mid-week for some European markets, ending the week on Friday with the first NFP report for the new year.