Oil intermarket: Trump ignites a shift in markets

The DXY is trading has rallied by 1.1% to 100.22 and the highest levels since late November 2015 after Trump won the elections while Oil as negatively correlated to the price of the greenback has headed in the opposite direction and to the lowest levels since middle of September as traders continue to have concerns over the likelihood of a production cut later this month by the Organization of the Petroleum Exporting Countries, (OPEC).

Crude prices have been struggling since late October leading in towards the November 30th OPEC meeting where members had proposed an output freeze to between 32.5 million and 33 million barrels a day at the September meeting in Algeria. 

Meanwhile, since Trump's victory, markets have turned around big time on the anticipation of fiscal stimulus that will cause an inflationary effect that will enable the Fed to hike interest rates assuming the proposals will pass a full-on Republican-controlled Congress. 

This has seen a movement out of bonds, emerging markets, and gold and into stocks and the US dollar denominated assets and the currency. This has also pressured the price of oil with WTI with a fresh low to $42.09 while US 30Y note yields have reached up to 2.99% and the S&P 500 to 2177 today. The big level to the downside is $40.00 now that the 200 dma at $43.99 was broken, targeting $39.17 and 2nd August lows. 

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