OPEC agreed to increase output by 1mln bpd to reduce ‘over compliance’ with the current output agreement. Oil price gains likely to be capped amid rising trade tensions .
Author: Justin McQueen
OPEC agree to raise production by 1mln bpd, which will represent a real production increase of roughly 600k bpd. CAD soft after lower than expected CPI report.
OPEC’s 174th ordinary meeting takes place today where expectations are for a relaxing of the current oil supply quota’s.
Eurozone PMI suggests that Eurozone growth has recovered despite stagnant manufacturing which has been hampered by increased trade war tensions.
Sterling bulls have been provided with some hope following the BoE rate decision, after Chief Economist Haldane joined McCafferty and Saunders in voting for a hike.
Bank of England kept the Bank Rate at 0.5%, however a more hawkish vote split at 6-3 led to the surge in the Pound as markets repriced an August rate hike, which now sits at 45%
EURUSD fell to its lowest level since July 2017 at 1.1508 as Italian assets came under pressure after reports that two Eurosceptic members had been appointed to the finance committee
SNB monetary policy assessment was largely unchanged from the previous quarter, while they downgraded longer term inflation forecast indicating negative rates for longer.
Brexit risks continue to dictate GBP, with focus on the meaningful vote, EUR Subdued as the ECB voice concerns over looming trade war, which could complicate QE exit.
The Bank of England is expected to stand pat on monetary policy with the MPC’s view likely to be little changed from May, following mixed economic data. Eyes on Carney’s Mansion House speech.