OPEC blinks

29 September, 2016

Yesterday’s decision by OPEC to restrict oil supply has pushed the price of crude higher by some 5%. The move took the markets by surprise, with the divisions between Iran (who are still enjoying their return to global markets) and Saudi (who are cash-strapped) seen as too big to overcome at this point in time. This represents the first cut in production since way back in 2008, during the depths of the global financial crisis. No great surprise to see the currencies of the oil producers gaining the most on the news, so the Canadian dollar, Mexican peso, Norwegian krone and Brazilian real have all done well. Importers, who now face a bigger trade deficit as a result of the price increase, have lagged, so most notably the yen and the single currency.

Of course, the other impact will be on inflation rates and most countries could do with a bit more inflation at this point in time, so this will not be an unwelcome development. Because you can’t generally substitute energy spending for other things, there is always the caveat that higher energy prices result in consumers having less free income to spend elsewhere. But that’s probably the secondary issue for most developed market central bankers right now. For today, the data calendar is on the light side, with EU consumer and business confidence data at 09:00 GMT, with German inflation data following at 12:00 GMT and a further reading on US Q2 GDP at 12:30 GMT.


Source link  
USD Bounces From Month Low

Trump administration has presented its 2018 budget plan to Congress last evening. The budget plan calls to slash $3.6 trillion...

Dollar index hit a new low

The dollar index hit a new post presidential election low of 96.95 on Friday May 19th. EUR/USD hit a high of 1.1211...

USD Hit Post Election Low

To date the dollar index has almost given up all of the post presidential election rally...


BoE Expected to Keep Rates Steady

ECB Governor Draghi will make a speech in the Dutch Parliament at 12:00 BST today. It will be Draghi first speech...

Trump's Tax Reform Plan

US Treasury Secretary Mnuchin announced Trump’s tax reform plan in a press conference...

Corporate Earnings Lift US Stocks

Last week the US President Trump stated on twitter...


Market Concerns Eased

The first-round voting of the French presidential election was revealed on Sunday night...

Dollar Plunged on Trump Second Statement

The dollar index fell to a 2-week low of 99.91 in the early hours...

Markets Eye on the First Trump-Xi Meeting

US President Trump and Chinese president Xi Jinping, are scheduled to meet today at Trump’s Mar-a-Lago resort in Florida...

  


Share: