The lack of top-tier U.S. reports and the bank holiday in Canada led to a relatively quiet trading session, with the dollar slowly inching lower and the Kiwi outperforming the rest.
- Kuwait and Iraq on board for a 9-month OPEC output deal extension?
- Fed official Kaplan: Waiting for upcoming inflation data to assess if trend is weakening or not
- Fed official Kaplan: U.S. economy is moving very close to full employment
- Eurogroup meeting unable to produce a deal from Greece’s creditors
- Explosion in U.K. Manchester Arena reported
OPEC chatter: 9-month extension on the table?
With the official OPEC pow-wow drawing near, market watchers are keeping very close tabs on remarks from energy ministers of the cartel members. Word through the pipeline is that Kuwait and Iraq could express its support for an extension of the deal at current production levels.
Recall that the Black Crack Mafia pledged to keep a lid on oil output in order to keep oversupply troubles in check. They reached this agreement during their November 2016 meeting then started implementing cuts for the first six months of this year. However, looking at the chart of crude oil prices lately suggests that these efforts weren’t enough to keep prices afloat.
With that, OPEC members need to discuss what their next moves should be and they need to act quick. Some are even recommending adjustments in production levels or forcing other cartel members exempted from the current output deal (Iran, Nigeria, and Libya) to implement cuts as well.
Saudi Arabia’s oil minister even flew to Iraq to convince them to support a 9-month extension of the deal, but officials are saying that six months is the best that they can do.
No debt relief for Greece… yet.
Yep, the Greek debt drama ain’t over, fellas! The latest Eurogroup meeting was mostly devoted to discussing what the next steps should be in terms of addressing Greece’s debt obligations.
Last time I checked, Greece was tasked to implement fiscal and economic reforms in order to unlock its next tranche of bailout funds. In this week’s huddle, Eurogroup leaders assessed the country’s debt sustainability and acknowledged that the IMF has been impressed by the current pace of reforms. Keep in mind that Greece has a huge bill to pay by July, so no pressure there!
Major Market Movers:
Even with a bit of risk aversion in play, the Kiwi was able to chalk up significant gains against its peers, particularly versus the Greenback.
NZD/USD is up from .6954 to the .7000 handle (+0.66%), NZD/JPY advanced from 77.45 to a high of 77.89 (+0.57%), GBP/NZD is down from 1.8691 to a low of 1.8562 (-0.69%), and EUR/NZD fell from 1.6134 to 1.6041 (-0.57%).
Watch Out For:
- 1:30 am GMT: Japanese flash manufacturing PMI (52.9 expected, 52.7 previous)