Daily Market Comment – Oil under pressure ahead of crucial OPEC meeting

  • OPEC meets today, supply decision could impact euro and stocks too
  • Dollar supported by solid US data and rising yields, sterling tumbles
  • Gold defies fundamental drivers, Swiss franc jumps on inflation data

Beyond oil

The world’s dominant oil cartel will convene today to decide on production targets. This is the most important OPEC meeting in a year and the outcome could have far-reaching implications for several asset classes as the global economy grapples with the hardest energy shock in decades. 

There’s been a dramatic change in tone from OPEC lately, with Saudi Arabia appearing willing to ramp up production to help cool oil prices. This shift has the White House’s fingerprints all over it, with President Biden even considering a visit to Saudi Arabia soon in a last-ditch attempt to offer struggling consumers some relief and avert a shellacking for the Democrats in the US midterm elections. 

Reports around what OPEC might do have been mixed. Some stories suggest no policy changes have been discussed, while other sources suggest the cartel could bring forward some production increases that were scheduled for later in the year. Speculation alone has knocked oil prices down this week, because ultimately, why would OPEC make such a fuss about boosting supply and then do nothing? 

Any signs that OPEC is finally willing to put a ceiling on oil prices would mean less threat of inflation running wild, less need for aggressive central bank tightening, and less recession risks - which would be music to the ears of riskier assets like stocks. It would also be good news for energy importing currencies such as the euro and Japanese yen.  

Dollar gains, loonie flat, sterling down

Over in the FX arena, it was another episode of the dollar trampling over its competitors with a little help from solid US data and rising Treasury yields. Yesterday's ISM manufacturing PMI had something for everyone, with the employment index falling into contractionary territory but the new orders index jumping, calming some nerves about a sharp economic slowdown. 

The Bank of Canada raised interest rates and warned that it is prepared to act more forcefully, yet the loonie could not rally in the aftermath. Instead, it was pinned down by an even stronger US dollar and softer oil prices. 

Meanwhile, the British pound slipped on another banana peel. Sterling remains hostage to any moves in stock markets, with the 60-day rolling correlation between Cable and the S&P 500 standing at an astonishing 0.89 currently. The pound has essentially turned into a proxy for global risk sentiment. 

Gold shines, franc climbs

Gold prices came back swinging yesterday, erasing some early losses to close in the green despite a stronger US dollar and a spike higher in real yields - both factors that are typically detrimental for bullion. Safe-haven demand seems to have returned, although if the upward trends in the dollar and yields persist, the yellow metal might not be able to resist gravity for long. 

Elsewhere, the Swiss franc is back in the spotlight after another acceleration in the nation’s inflation. This provides the Swiss National Bank the perfect cover to begin raising interest rates later this year, although the current market pricing seems way too aggressive as it implies the hiking cycle is likely to begin this month already. SNB officials haven't even shown any signs this is under consideration so far, leaving scope for some short-term disappointment in the franc. 

Finally, the ADP jobs report was delayed until today and investors will pay close attention ahead of tomorrow’s edition of nonfarm payrolls. 

Dernières actualités

Technical Analysis - USDJPY climbs closer to a key resistance zone

UK inflation likely approached 10% in July, as pound tests $1.20 – Forex News Preview

Refreshed US dollar awaits Fed minutes and retail sales – Forex News Preview

Will Canada’s CPIs impact BoC rate expectations? – Forex News Preview

Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.

Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.

Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.

Nous utilisons des cookies pour vous donner la meilleure expérience possible de notre site internet. En savoir plus ou modifier vos paramètres de cookies.

Avertissement sur les risques : votre capital est à risque. Les produits à effet de levier ne sont pas recommandés pour tous. Veuillez consulter notre Divulgation des risques