Dubai TV Interview, Nov. 30, 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

Oil

Hashad indicated that last Friday, there was a state of panic that dominated most global markets; we witnessed a free fall in oil prices, as it plunged nearly 13% at the level of 67.40 dollars per barrel, the lowest level since 2020.

Hashad believes that the OPEC decision to postpone its meeting until the end of last week was very sound, as OPEC + is still evaluating the situation and the risks of Omicron, amid fears of returning to square one.

Hashad also believes that there is no reason for OPEC+ to raise its oil production and maintain the current production quantity of nearly 400,000 barrels per day because concerns about possible new lockdown have a clear and high impact on global oil demand levels.

Fed

Hashad explained that the markets were waiting for Jerome Powell’s speech, and the markets were in a state of anticipation, as during the past weeks the markets had largely expected Jerome Powell to accelerate the pace of reducing asset purchases until the program ends in April 2022 instead of May, and then start raising rates gradually.

The markets were waiting for Powell’s comments, especially after the emergence of the Omicron mutator, amid fears that the Fed would return to pump more liquidity and stay aside from monetary tightening, but “Hashed” believes that the Fed has a clear vision.

“Hashad” said that Powell may end the program completely in April. Still, Powell cannot surprise the markets as it may cause the markets to be in a state of turmoil. Still, the reduction will be gradual, approximately 15 to 20 billion dollars.

EUR/USD

Hashad said that the trend of the Euro is bearish in general, as the recent speech of Christine Lagarde, the European Central Governor, clearly pressured the Euro against the dollar and other currencies. Inflation reached its highest levels in the European bloc, and Christine Lagarde did not reassure the markets. However, she still determined that inflation will reach the target levels and that the current inflation is just a transitional period. 

Furthermore, Lagarde has ruled out a rate hike soon, and the markets have largely translated that the Euro will remain a low-yielding currency over an extended period.