ROI-What just happened? The financial week in five charts
ROI-What just happened? The financial week in five charts The opinions expressed here are those of the authors.
By Anna Szymanski
June 19 (Reuters) - Every Friday, Reuters Open Interest (ROI) wraps up the financial week with five key charts, highlighting major trends - and the surprising, sometimes overlooked moves that defined the past five days.
1. OIL SHOCK, MUTED PANIC
RON BOUSSO, ROI Energy Columnist: Crude oil prices and volatility did not surpass all-time highs recorded in recent years, despite an unprecedented Middle East supply shock. This may be because traders were making a bet that President Donald Trump would not allow the conflict to spiral into a full-blown economic crisis. So the more inventories were being run down, the closer we were getting to a deal. It was a risky call, but it proved correct.
2. SPACEX OPTIONALITY
ANNA SZYMANSKI, ROI Editor-in-Charge: Following its blockbuster IPO last week, SpaceX SPCX.O saw its market cap soar past Amazon's AMZN.O $2.65 billion valuation on Tuesday to briefly top Microsoft's MSFT.O $2.92 billion. This was largely thanks to frenzied trading in its newly listed options. In fact, over 500,000 SpaceX options contracts changed hands within the first hour of trading on Tuesday, with that number rising to more than 1 million by early afternoon, according to Trade Alert data. Given SpaceX's relatively small float and eye-watering valuation, investors should probably expect volatility ahead. The company's more than 8% combined drop on Wednesday and Thursday may be an early taste of this.
3. CHINA SLAMS THE REFINING BRAKES
CLYDE RUSSELL, ROI Asia Commodities and Energy Columnist: China's refiners dipped into stockpiles for the first time in 14 months in May as the Iran war boosted crude prices. But the draw, at around 500,000 barrels per day, was modest given the drop in imports last month by about 3 million bpd from pre-war levels. As total available crude oil fell, refiners cut processing to multi-year lows - an extreme reaction that underscores China's position as the major consumer best placed to manage major supply disruptions.
4. DIVERGING PATHS
ANNA SZYMANSKI, ROI Editor in Charge: The Bank of England kept its policy rate unchanged at 3.75% on Thursday, arguing it would be premature to raise rates given uncertainty over the strength of inflation pressures - particularly after the interim U.S.-Iran deal, which should help ease energy prices. The Federal Reserve also held its target range at 3.50%-3.75% this week, as Kevin Warsh made his debut as chair on Wednesday. But while the hawkish shift in rate expectations for the BoE has started to moderate, the same cannot be said for the Fed.
5. COPPER BULLS PILE IN
ANDY HOME, ROI Metals Columnist: The breakdown of open interest in the LME copper options market shows a heavy skew towards call options, a snapshot of the bullish sentiment currently underpinning prices. Investors are still looking for upside exposure to copper, even after its strong run.
Opinions expressed are those of the authors. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(By Anna Szymanski
Editing by Marguerita Choy)
