Article / 15 May 2017 at 7:00 GMT

Morning Markets: Opec, Russia extend deal, oil and stocks rally

Senior Editor / Saxo Bank
Denmark






Morning Markets

 










Watchlist

  • China: Industrial output (already published)
  • China: Retail sales (already published)
  • China: Fixed-assets investment (already published)
  • Portugal: GDP flash estimate (0830 GMT)
  • Greece: GDP flash estimate (0900 GMT)
  • US: New York Fed manufacturing index (1230 GMT) 
  • US: Housing market index (1400 GMT)

Reports that the Saudi Arabian and Russian energy ministers have agreed to extend the current production cut deal to March 2018 are pushing oil prices and equity futures higher into the European bell. According to Saudi Minister Khalid al-Fatih, the deal's extension will continue under the current terms. 

Brent crude futures are trading at $51.55/barrel, up 1.5%, while their WTI counterparts are up by the same percentage amount to $48.54/b as of 0630 GMT.

The crude rally has European equity futures up following a mixed Asian session with investors looking for early gains in both the Dax and the FTSE indices. 

While the oil news boosted energy shares in Australia, the sectorall effect was just sufficient to bring the benchmark ASX 200 into the green; it closed the day up 0.03%. In forex markets, the US dollar index retreated 0.1% in Asia while the AUD continued last week's recovery and currently trades at 0.7415 versus USD. 

Today's calendar sees US housing and manufacturing data due following softer-than-expected retail sales data overnight. UK intelligence has also warned that the 'WannaCry' cyperattack is likely to continue while the risk of other, similar attacks remains elevated.

Market signals

Asian session

  • US, world leaders have condemned North Korea's latest missile test
  • Experts fear fresh ransomware threats following the WannaCry cyber attack
  • Qatar has lifted a moratorium on developing the world's largest natural gas field
  • Japan's Producer Price Index rose 2.1% in the year to April, beating estimates
  • China's industrial production rose by 6.5% in April, falling short of the 7% expected
  • China's retail sales were 10.7% higher in April than in March, close to expectations
  • China's annual fixed-asset investment increased 8.9% in the January-April period
  • The S&P/ASX200 just made it into positive territory; it closed up by 0.03% at 5,838.40
  • BHP has attracted plenty of potential buyers for its Cerro Colorado copper mine in Chile
  • Australia's monthly home loans fell 0.5% in March
  • New Zealand's retail sales rose 1.5% in the first quarter, faster than expected

Forex ahead

  • USDJPY makes gains overnight, trades at 113.50 area into European bell
  • AUDUSD holding the 0.74 handle after continuing its recovery Monday
  • EURUSD trading in range just north of 1.09 handle
  • USDCAD sheds recent strength as oil prices pick up

From the Floor

Oil jumps. "We've seen another jump in oil prices that came on the back of a meeting between Saudi Arabia, Russia and China," says Hansen.

Weak prices. "We had some very weak US inflation data, which caught the market by surprise on Friday... the June hike is suddenly a bit more in doubt now," says Boye.

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

1..2..3
Despite a likely dip in sentiment in the home building industry in the US, the outlook for this key sector of the economy remains cautiously optimistic, says James Picerno.

Aussie dollar optimism
AUDUSD has continued to recover, helped by Fitch affirming Australia's sovereign rating following the recent Federal budget, says the team at Saxo Capital Markets Australia.

Caution ahead
Asian markets were cautious following the weekend G7 meeting, which outlined concerns over Donald Trump's protectionist policies, writes Saxo's Singapore trading team.

China focus

China's One Belt, One Road summit showcased Beijing's plans for fighting protectionism by spending billions on trade infrastructure, writes Kay Van-Petersen in Macro Monday

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Nearly 30 world leaders meeting at the Belt and Road summit in Beijing, above, agreed to back China's plans for massive spending to boost global trade. Photo: Shutterstock

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16 May
fredajerusha fredajerusha
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