Dubai TV Interview, Nov. 22, 2021

Speaking on Dubai TV, Monday, Mohamed Hashad, Director of Research and Development at Noor Capital and member of the American Association of Professional Technical Analysts, shed light on a number of developments in the markets this week:

European Stocks

Hashad commented on how markets would deal today with concerns over accelerating coronavirus infections across Europe, and how European stocks could be impacted. He pointed out that fears increased amid the rise in COVID-19 cases with the new reality of the emergence of the fifth wave pressuring the markets in general and specifically the European markets, as the European region is considered as center of the epidemic spread-out.

Hashad has added that the rising levels of infection also had a significant and obvious negative impact on the European currency, which fell strongly against the US dollar and against other currencies.

Last Friday, the DAX faced its biggest drop in seven weeks. However, Hashad mentioned that there were slight signals of recovery that appeared at the beginning of this week that ignored this bad news as a result of mergers and acquisitions in the Telecom field, this is surely a remarkable development in European stocks.

FOMC Meeting’s Minutes

The markets were dominated by anticipation on the results of the Federal Reserve’s meeting minutes and the decision to accelerate the pace of monetary stimulus withdrawal and tapering. Asked how he thinks the Fed will move during this upcoming period, Hashad indicated that the markets are closely awaiting the results of the FOMC meeting, and that the recent positive economic data, led by retail sales data, which recorded 1.7%, as well as the addition of the US jobs above expectations.

All these factors together could pressure the Federal Reserve to taper asset purchases, as markets are now demanding the policymakers to end asset purchases in April instead of June, paving the way for interest rate hike.

Oil

Oil continued its decline, as the oil war continued staging, oil prices recorded losses by 4.3%, reaching its lowest level in seven weeks. Threats and challenges of the United States and its alliance with some Asian countries pressured oil prices, specifically the threat of releasing some of the strategic reserve. In addition, Japan announced the release of part of its strategic reserves during the year and has already held a public auction to sell 7.4 million barrels.

Accordingly, Hashad explained, the US threat to release some of the strategic reserve led to a drop in oil prices, and we may soon see levels around $73 per barrel.

Asked what else might lead to the market movement and developments during this week, other than the Coronavirus and the results of the US Federal Reserve meeting, Hashad stated that the markets are also awaiting the speech by Christine Lagarde, the President of the European Central Bank, and another speech by Andrew Bailey, the Governor of the Bank of England, as well as the US GDP data.