The lack of top-tier data or market-moving headlines in the New York session kept traders reeling from the catalysts earlier in the day, namely the U.K. GDP revision and OPEC decision.
- OPEC to extend output deal by 9 months as expected
- U.S. initial jobless claims tick up from 233K to 234K vs. 238K forecast
- U.S. goods trade deficit widened from $65.1B to $67.6B vs. $64.7B consensus
- U.S. preliminary wholesale inventories down 0.3% vs. projected 0.2% gain
- S&P 500 and Nasdaq surged to new record highs
OPEC decision aftermath
It was a classic “buy the rumor, sell the news” situation for crude oil and the Canadian dollar as the OPEC agreed to a 9-month extension of the output deal as expected. Nope, no additional adjustments to production levels or requirements for exempted nations to participate in the deal.
In addition, Saudi’s energy minister confirmed that the cartel is not looking to impose caps on production for Libya and Nigeria anytime soon. He did say that they were cutting their shipments to the U.S. and that he hopes shale oil production will be moderated soon, citing that this particular type of commodity is getting more costly to produce.
Black Crack continued to head south, dragging other commodities along the way:
- WTI crude oil slipped $2.71 to $48.65 per barrel
- Brent crude oil is down $2.66 to $51.24 per barrel
Medium-tier U.S. economic data
Uncle Sam’s figures were mostly stronger than expected but these did little to shore up the Greenback as market watchers seemed to be focused on commodities instead.
Initial jobless claims ticked slightly higher from 233K to 234K but was still lower than the projected 238K increase in claimants. Preliminary wholesale inventories dropped 0.3% instead of growing by 0.2%, suggesting that a pickup in demand led businesses to deplete stockpiles in April and that consumer activity likely picked up then.
On a less upbeat note, the goods trade balance printed a wider deficit of $67.6 billion in April versus the earlier $65.1 billion shortfall and the projected $64.7 billion deficit. Components of the report showed that this was a result of lower exports and higher imports for the period, with the decline in shipments led by automotive vehicles and consumer goods.
Even so, U.S. stock indices resumed setting new record highs:
- S&P 500 index rose 0.44% to 2,415.07
- Nasdaq climbed 0.69% to 6,205.25
- Dow ticked 0.34% higher to 21,082.95
Major Market Mover(s):
The Loonie was still on a slip n’ slide for the most part of the day, as profit-taking carried on after the OPEC’s decision simply came in line with expectations.
USD/CAD rose from 1.3472 to a high of 1.3494, CAD/JPY tumbled from a high of 83.35 to a low of 82.94, EUR/CAD bounced to 1.5122, and AUD/CAD is up to 1.0053.
Watch Out For:
- 12:30 am GMT: Japan’s national core CPI (0.4% expected, 0.2% previous)
- 12:30 am GMT: Tokyo core CPI (0.0% expected, -0.1% previous)