Centre of attention are events in Europe as sentiment shifts from Trumps bull run as stocks and the USD held. The US dollar index fell 0.3% at NY close as USD/JPY survived above the 111.50 despite closing 1.15% lower.
Oil finished at 47.08, up 2.2%, as speculation surrounds Wednesday’s OPEC meeting in Vienna. Whilst a short six month agreement is most likely, traders move focus to the extent of the cuts as any significant shift in price would require a cut by the cartel of between 640,000 to 1.1million barrels a day. A target output cut of between 4-5% from the October levels has been leaked by independent sources however it is unclear whether this output cut would boost prices towards $55 a barrel. The Saudi’s have maintained a strong position against both Iraq and Iran, both seeking exemption, dismissing the importance of these agreements however cost of not cutting production would see price fall immediately below $40 with further insecurity surrounding the groups inability to collude given the number of previous failed discussions.
GBP fell below 1.24 down over 0.7% as the domestic debate around Britain’s exit from the European Union escalated. A survey by the Confederation of British industry displayed increasing pessimism surrounding the UK’s future. PM May discussed the importance of Britain’s role in a number of organisations in Europe displaying the true complexity of upcoming years.
The Australian Dollar lifted slightly vs USD as Oil and other commodities gained as it looks to challenge 0.7500. Month end considerations have been the main catalyst and market driver as the topside should continue to gain momentum throughout early Asia. AUD/NZD saw dips bought in early NY before resistance of 1.05880 held strong.
