Throughout the oil price collapse, some of the biggest questions on traders’ minds have been how low can it go? and At what level will OPEC producers like Saudi Arabia feel enough pain to curtail their market share war? Today it appears we got an answer at least for the time being, and that is about $40.00 for WTI crude oil. Oil started out the week losing ground and dropping under $40.00 on a combination of a higher US Dollar and ongoing glut of supply. It appeared oil could trend even lower when out of nowhere, Saudi Arabia announced it is willing to talk to OPEC and non-OPEC countries about stabilizing the marketplace. This indicated that $40.00 is a big pain threshold for producing countries that they are apparently willing to defend. Oil spiked up over $41.00 on the news before drifting back as traders now wait to see if the Saudis are prepared to back up their talk with decisive action or not. Stock markets in the US and Europe have been trading slightly lower to start the week as they digest and consolidate last week’s big gains. A $160B merger deal between Pfizer and Allergan captured the headlines but surprisingly didn’t have a huge impact on trading in the health care sector. Steady stocks and currencies through much of the day suggest that traders may be reluctant to make any major moves ahead of today’s Fed Governors meeting. A meeting was put together on short notice to discuss the discount rate which is ongoing at the time of writing. It is unknown if the Fed is planning to change the rate today or if it is preparing to do something at the December FOMC meeting where interest rate liftoff is widely expected. If the Fed does announce a discount rate change, we could see significant action in currencies and stocks. A higher USD and falling copper price had AUD and NZD back on their heels to start the week. Today the main news for Asia Pacific countries is flash PMI for Japan. Overseas results were mixed with Europe a bit better than expected but the US coming in short of the street estimate. A short week for US economic data continues Tuesday with the main event being a US GDP revision which could keep the FOMC speculation pot boiling. Corporate News There have been no major announcements after the US close today. Economic News Significant announcements released overnight include: US flash manufacturing PMI 52.6 vs street 53.9 US existing home sales 5.36M vs street 5.40M France flash manufacturing PMI 50.8 as expected France flash service PMI 51.3 vs street 52.6 Germany flash manufacturing PMI 52.6 vs street 52.0 Germany flash service PMI 54.4 vs street 53.9 Eurozone flash manufacturing PMI 54.4 vs street 53.9 Eurozone flash service PMI 54.1 vs street 54.6 Upcoming significant economic announcements include: (Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore) 12:35 pm AEDT Japan flash manufacturing PMI previous 52.4 7:00 am GMT Germany GDP street 1.7% 9:00 am GMT Germany IFO business climate street 108.2 9:00 am GMT Germany IFO current assessment street 112.4 9:00 am GMT Germany IFO expectations street 104.0 11:00 am GMT UK CBI sales street 25 vs previous 19 8:30 am EST US advance goods trade balance street ($60.7B) 8:30 am EST US Q3 GDP update street 2.1% 8:30 am EST US Q3 personal consumption update street 3.2% 8:30 am EST US Q3 Core PCE inflation update street 1.3% 10:00 am EST US consumer confidence street 99.5 10:00 am EST US Richmond Fed street 1 CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
Oil reaches a turning point, Fed meets as traders look to Japan PMI and US GDP
00:00, 23 November 2015 · By Colin Cieszynski