Morning Markets: Crude oil gains as Saudis pledge to axe exports
Watchlist
- France: Monthly business survey - goods-producing industries (0645 GMT)
- Germany: Ifo business climate index (0800 GMT)
- UK: CBI industrial trends survey (1000 GMT)
- US: S&P CoreLogic Case-Shiller indices (1300 GMT)
- US: Consumer confidence index (1400 GMT)
- US: Richmond Fed manufacturing index (1400 GMT)
Crude oil prices extended gains in Asian trading on Tuesday after the world's top producer, Saudi Arabia, said it would go beyond production cuts and reduce its exports in a bid to tighten the market, which is awash with supplies.
Saudi energy minister Khalid Al-Falih said the kingdom would limit exports to 6.6 million barrels/day in August, 1 million lower than a year earlier. The deal implemented by Opec and some non-Opec oil producers since January 1 has focused on production cuts rather than exports, and plentiful supplies have kept oil prices under pressure this year.
WTI crude recovered to above $46/barrel, and Brent approached $49/b.
US stocks ended mixed on Monday, with the tech-heavy Nasdaq rising 0.4% to a new record-high close of 6,410.81 points, while the Dow and S&P500 ended with small losses.
Asia-Pacific bourses were also mixed on Tuesday, with Australia's ASX gaining about 1%, while Japan's Nikkei and Hong Kong's Hang Seng were slightly negative, and the Shanghai Composite was down about 0.3%.
In a big week for US tech company earnings reports, shares in Google's parent Alphabet slid 3% in after-hours trading on Monday after the group reported second-quarter profits hit by a record $2.7 billion European Commission fine. Revenues were in line with expectations, while the search giant's earnings narrowly beat analysts' estimates.
Markets keenly await the outcome of Wednesday's policy meeting at the US Federal Reserve.
Market signals
Asian session
- Nasdaq hit a high overnight ahead of a week of technology stock earnings
- Alphabet fell more than 3.2% in after-hours trading on its earnings release
- Trump's unfulfilled promises prompted the IMF to cut US growth forecast for 2017
- IMF also cut UK growth forecast to just 1.7% from 2%
- BoJ's monetary policy meeting minutes showed members agreed to keep policy easy
- This was because the central bank's 2% inflation target remained distant
- Oil continued its overnight rise on news that Saudi Arabia will cut exports in August
- Fellow Opec member Nigeria also agreed to cap crude production
- South Korean semiconductor maker SK Hynix reported record Q2 operating profits
- Most Asian stock markets slipped, while Australia's ASX rebounded from Monday's tumble
- Korea's Kospi Composite was down 0.11% to 2,448.80 at 0508 GMT
- Hong Kong's Hang Seng was off 0.01% to 26,843.51 at 0529 GMT
- The Shanghai Composite was down by 0.04% to 3,249.21 at 0529 GMT
- Japan's Nikkei 225 gave up early gains; it was down 0.03% to 19,968.92 at 0508 GMT
- Australia's S&P/ASX200 was up by a solid 0.94% to 5,741.30 at 0525 GMT
- Aussie miner Rio Tinto faces a UK Serious Fraud Office probe over dealings in Guinea
Forex ahead
- AUD edged higher; it was worth 0.7936 at 0526 GMT
- The flagging USD fell against the yen; it was worth just ¥111.0430 at 0527 GMT
In opinion
1..2..3
Today’s survey data is on track to reaffirm that Britain’s manufacturing sector continues to expand at a healthy pace, says James Picerno.
Iron ore strengthens
Spot iron ore prices pushed higher, despite losses on futures markets in China, though the gains were limited, explain Saxo's Sydney trading team.
Dollar firms
The USD firmed overnight following recent uncertainty about the White House's ability to pass its key policy proposals in Congress, write Saxo's Singapore trading team.
Zooming car debt
UK car sales are soaring, and there are clear risks in the car industry’s growing reliance on personal contract purchase (PCP) lending, writes Stephen Pope.
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