OPEC, Non-OPEC meeting unlikely to happen

11 March, 2016

OPEC, Non-OPEC meeting unlikely to happen

FX News Today

ECB’s policy “bazooka” backfired at least yesterday, where a buffet of easing steps were at first embraced then later spurned by the markets. For a while it seemed like Draghi had found his magic touch again. By burying a rather modest deposit rate cut in a broad package of other stimulus package, including a new corporate bond purchase program, he managed to keep markets happy, bring in spreads and give stock markets a boost, but only for an hour or so. Peripheral government bonds, stressed banks and corporate bonds were the main beneficiaries. In the long run though Draghi’s eagerness to shield highly indebted countries and banks struggling with non-performing loans may come back to haunt the ECB and the Eurozone. It would appear Draghi did too good a job of signaling the moves in advance, which were clearly priced in, then followed by rapid unwinding on-the-fact. He also managed to confuse markets while he initially managed to bury the modest deposit rate cut in a host of other measures and implicit easing bias. He undid most of the good work by remarking that he doesn’t expect it to be necessary to cut rates again. Given the ECB’s track record, the only thing that means is that there won’t be another cut at the next meeting, and we would expect markets to settle down again today as the details of the stimulus package sink in. Today’s CPI number release from Germany won’t change the picture either as numbers were in line with expectations and mostly unchanged.

Japanese business sentiment deteriorated abruptly in the first quarter, the BSI Manufacturing Index indicated today. Financial market turmoil and slow demand globally had impacted negatively Japan’s flimsy economic recovery. The data pressures the policymakers to deploy extra stimulus measures to reflate an economy that is bordering on yet another recession. BSI Index measuring sentiment at large manufacturers came in at -7.9 in January-March, swinging from 3.8 in Q4 2015. BSI index is a joint survey by the Ministry of Finance and the Economic and Social Research Institute, an arm of the Cabinet Office.

OPEC, Non-OPEC meeting unlikely to happen on March 20 as previously scheduled, as Iran has yet to agree to the oil production freeze, according to sources cited on Reuters earlier. That sure could explain the reversal in NYMEX crude into the red by -1.9% and back below $38 bbl to the $37.50 area.

Canada’s erosion in Q4 capacity use was not a surprise, as the drop to 81.1% in Capacity Utilization Rate fit with the already revealed slowing in real Q4 GDP growth to an 0.8% pace (q/q, saar) from the 2.4% growth rate in Q3. Revisions were substantial in today’s report, but the pattern in 2015 remained intact: The post-recession Q4 2014 near term peak use rate was revised to 82.8% (was 83.3%), falling to 81.9% in Q1 (was 82.5%) and 80.5% in Q2 (was 81.4%) before rising to 81.6% in Q3 (was 82.0%).

Main Macro Events Today

Canada Employment numbers: We expect employment to rise 10.0k in February (median same at +10.0k) after the 5.7k drop in January. The year started out in a mess, with crude oil prices plunging and global growth worries intensifying. Against that backdrop, total jobs dipped. A less dire backdrop of firmer oil prices and markets that were not melting down is expected to lead to some optimism, lifting employment in February. But the resource and manufacturing sectors remained a drag, which may leave another disappointing report.

Baker Hughes Oil Rig Count: Trends in rig counts are significant clues for market participants in the oil and gas sector as they reveal the supply dynamics in the sector. Rig counts are reported week on Fridays. On March 7th the company announced that the international rig count for February 2016 was 1,018, down 27 from the 1,045 counted in January 2016, and down 257 from the 1,275 counted in February 2015. The worldwide rig count for February 2016 was 1,761, down 130 from the 1,891 counted in January 2016, and down 1,225 from the 2,986 counted in February 2015.


Source link  
Recovery on global stock market

A round of positive earnings from U.S. companies reports and progress on the U.S. tax reform plan underpinning risk appetite. The Hang Seng...

Focus returns to Brexit talks

The President Trump is off to Asia, the earnings season is winding down and the data calendar is thinning. There are several central bank...

Dollar majors posted narrow ranges

EUR-USD has settled around 1.1750 after logging a two-week low at 1.1724 late yesterday. Market participant will remain vigilant on developments...


The dollar remained on the ebb

The narrow trade-weighted USD index is showing a modest 0.2% loss as the London interbank opens, at 93.23, having extended the decline from...

Trump bump seemed to get renewed

That added to an already optimistic tone after signs of solid consumption growth and fixed investment in the U.S. Q2 GDP and with the strength...

Fed VC Fischer steered clear of policy

Asian stock markets moved modestly higher on the last day of the third quarter. Hopes that the U.S. tax reform will boost growth underpinned...


FTSE 100 futures are slightly higher

Asian stock markets are narrowly mixed and fluctuating at high levels, as trading volumes are low and investors await the Fed decision...

Markets have come quite a way up

Both central banks are widely expected to keep policy on hold, but the BoE’s statement in particular will be watched carefully...

Dollar traded softer vs many currencies

European Outlook: Asian stock markets mostly moved higher in quiet trade, after Wall Street managed to close with slight gains...

  


Share: