- U.S. preliminary Q3 GDP reading upgraded from 2.9% to 3.2%
- Canadian current account deficit at 18.3B CAD vs. 16.4B CAD forecast
- U.S. CB consumer confidence index up from 100.8 to 107.1 vs. 101.3 consensus
- Iran’s oil minister says they won’t be cutting production
- Iraq wants to freeze at 4.55 mbpd vs. OPEC cut to 3.79 mbpd
Is that a “No deal” for OPEC? Market watchers continued to monitor the developments among the cartel members but it looks like Iran won’t be on board at all.
OPEC chatter – ‘Twas the night before the OPEC official meeting and Iran still won’t budge. According to the country’s oil minister, they don’t plan on giving in to production cuts. This follows a proposal from Algeria for the 14 energy-producing nations to cut total production to 32.5 million barrels per day from the previous month’s 33.6 million barrels per day. This should set Iran’s production at around 3.79 million barrels per day.
Instead, Iran wants to freeze production at 4.55 million barrels per day so that it can be able to make up for lost revenue from years of Western oil sanctions. Meanwhile, Iraq is also seeking special treatment from an output deal, possibly an exemption similar to Libya, since it needs oil profits to fund its war with the Islamic State. Its energy minister has specified that it won’t be participating in a deal unless everyone’s on board.
With that, analysts are betting on 50/50 odds of an output deal being made, although it’s possible that the ministers will come up with some watered-down version of an “agreement” at the eleventh hour to prevent crude oil prices from dropping sharply. If you’re planning on trading this event, make sure you read Forex Gump’s 3 Things to Know Before the OPEC Meets This Week article.
Upbeat U.S. data – On a less downbeat note, economic figures from Uncle Sam didn’t fail to impress, as its already strong Q3 GDP reading was upgraded from 2.9% to 3.2%. Components of the report indicated that consumer spending was higher than initially reported, with household purchases revised from 2.1% to 2.8% for the period. This was spurred by an upward revision in wage growth for the quarter, which likely buoyed consumer confidence as well.
Indeed the CB consumer confidence index jumped from an upgraded 100.8 figure to 107.1 this month, outpacing the projected rise to 101.3 to show a YUUUUGE improvement in sentiment. Keep in mind that this survey takes into account the post-election vibes so consumers likely shared the positive investor outlook after Trump’s win.
Major Market Movers:
CAD – Loonie traders seem to be bracing themselves for the OPEC talks to end without an agreement, and it didn’t help that Canada’s current account balance disappointed.
USD/CAD climbed from 1.3444 to a high of 1.3481 then retreated to 1.3430, CAD/JPY continues to consolidate at 83.60, EUR/CAD is up from 1.4260 to the 1.4400 handle, and NZD/CAD popped up from .9543 to .9600.
- 12:00 am GMT: New Zealand ANZ business confidence
- 12:30 am GMT: Australia building approvals m/m (2.2% expected, -9.3% previous)
- 12:30 am GMT: Australia private sector credit m/m (0.4% expected, 0.4% previous)
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
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