t has been a huge trading day for crude oil with WTI and Brent both soaring over 5% on the day benefitting from a two stage rocket blast of support. First, US DOE inventories fell by 1.8 mmbbls last week, way better than the 3.0 mmbbl increase the street had been expecting, indicting an improving US supply/demand situation. Second, reports emerged in the afternoon indicating that OPEC countries have agreed to cut production into the 32.5-33.0 mmbbl range less than the 33.25 mmbbls they produced in August but more than in April when talks in Qatar fell apart. Decisions on individual country quotas have been left for the next formal OPEC meeting on November 30.
This positive development for the oil market, bringing a two year war over market share to a close for now also lit a fire under energy stocks and sent oil sensitive currencies like CAD and MZN into rally mode. The rally in energy stocks also helped broader indices to post gains on the day with other sectors trading flat to lower.
Renewed interest in energy and metals with copper also climbing lately could carry through into today’s Asia Pacific trading, particularly Australian stocks and AUD. Japan may also attract some attention from traders around its retail sales report.
Tomorrow brings employment data for Germany and the second Q2 GDP update for the US which may not have much of an impact with Q3 nearly over. A number of FOMC members are scheduled to speak Thursday. Recently Fed Chair Yellen indicated a majority of Fed members would like to see an interest rate increase this year. Last night SF Fed President Williams joined Dallas Fed President Kaplan and other non-voters this year who have stated they would have voted for a rate hike last week had they been able to do so.
There have been no major announcements after the US close today
Significant announcements released overnight include:
US durable goods orders 0.0% vs street (1.5%)
US durables ex transport (0.4%) vs street (0.5%)
US capital goods orders nondef ex air (0.4%) vs street 0.1%
US DOE crude oil inventories (1.8 mmbbls) vs street 3.0 mmbbls
US DOE gasoline inventories 2.0 mmbbls vs street 0 mmbbls
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)
7:15 pm EDT FOMC George speaking
9:50 am AEST Japan retail sales street (1.7%)
8:00 am BST Spain retail sales street 4.5%
8:00 am BST Spain consumer prices street 0.2% vs previous (0.1%)
8:55 am BST Germany unemployment chnge street 5K
8:55 am BST Germany unemployment rate street 6.1%
1:00 pm BST Germany consumer prices street 0.6% vs previous 0.4%
8:30 am EDT US advance goods trade balnce street ($62.2B) vs previous ($59.3B)
8:30 am EDT US Q2 GDP update street 1.3% vs previous 1.1%
8:30 am EDT US Q2 personal consumption street 4.4%
8:30 am EDT US Q2 core PCE inflation street 1.8%
8:30 am EDT US jobless claims street 260K
10:00 am EDT US pending home sales street 2.6%
10:30 am EDT US natural gas street 55 BCF
8:50 am EDT FOMC Lockhart speaking
10:00 am EDT FOMC Powell speaking
2:00 pm EDT FOMC Kashkari speaking
4:00 pm EDT FOMC Yellen speaking
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