OPEC announces 32.5 BPD(May production) limit for oil production, down from 33.6...

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Morning Call: Softer dollar boosts commodities, stocks

Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.

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Squawk / 28 September 2016 at 19:30 GMT

JakubSzalaFX

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OPEC announces 32.5 BPD(May production) limit for oil production, down from 33.69 output at the end of August. At the first sight seems not to be a big deal. Market reaction, for now, rather mild.
Price turned down around my level 47.10.

Anyway, looks like we might be having new correlation:

Falling USDJPY vs falling EURUSD, AUDUSD, before it was opposite. Even now we had a great evidence, OIL deal gave a risk-on with the above correlation in play, to reverse after a while.

Sentiment might be now in the most serious risk-off mode, implying first JPY, second USD as a last shelter.

Usually, when speaking about monetary policy divergence, USD was the only gainer/loser.

What could cause this change?

3y

yuiyui

even if the Russians eventually agree to a freeze, the US shale and Canadian sands wont. Saudi always slows production around this time anyways and we are far from working our way down from these record stockpiles

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