Major pairs struggled to establish a clear direction as U.S. banks were closed in observance of Columbus Day while Canadians were out celebrating Thanksgiving Day. With that, currencies mostly took their cues from sentiment and price action during the previous session.
- U.S. and Canadian banks closed for the holidays
- U.K. PM May assured businesses of two-year transition period
- OPEC Sec-Gen Barkindo: Consultations underway for extension of OPEC deal
- Barkindo: OPEC members may have to take some “extraordinary measures” to keep market balanced
- Oil ministry spokesman: Saudi Arabia to look into curbing exports, on top of production
OPEC output deal chatter
It looks like the Black Crack mafia is dead serious about rebalancing the crude oil market and might soon make an offer that the commodity couldn’t refuse.
OPEC Secretary General Mohammad Barkindo confirmed that they have already started consultations on a possible extension of the current output deal past the March 2018 end-date. He even added that some member nations might need to take “extraordinary measures” and that other oil-producing nations not part of the cartel might join the agreement.
In his remarks during a Reuters summit, Barkindo also mentioned that there is clear evidence that the oil market is already rebalancing. Looking ahead, he projected that the gains in demand forecasts over the next couple of years are likely to be the norm.
Meanwhile, an oil ministry spokesperson from Saudi Arabia affirmed that the nation is also looking into curbing export levels, on top of keeping a cap on production.
U.K. PM May’s remarks
In an attempt to shore up confidence in the U.K. economy throughout Brexit, U.K. Prime Minister May had a brief pow-wow with business leaders and assured them that they can count on a two-year transition period.
According to sources familiar with the meeting, most business leaders had been concerned about the slow negotiation process and the lack of clarity. Aside from that, many were also worried about having access to talent after breaking up with the EU and how this could impact their investment cycle decisions by the end of this year and early 2018.
No. 10 was backed by Finance Minister Hammond, Business Minister Greg Clark, Brexit Minister David Davis and Trade Minister Liam Fox. Hammond added that clarity is better than perfection and May has promised to keep engaging with businesses throughout the Brexit process.
Speaking in front of Parliament, May assured that the two-year implementation plan is moving forward and that the U.K. will retain access to the single market on current terms. She also clarified that the U.K. government has no intention of revoking Article 50 or backing down from the breakup from the EU.
“As we look forward to the next stage, the ball is in their court. “But I am optimistic we will receive a positive response.”
U.S. stock indices retreat
Wall Street must be feeling the jitters ahead of earnings season as equity indices returned some of their recent wins at the start of the week.
- Dow 30 index is down 12.60 points to 22,761.07 (-0.06%)
- S&P 500 index is down 4.60 points to 2,544.73 (-0.18%)
- Nasdaq is down 10.45 points to 6,579.73 (-0.16%)
The financial sector is set to get the ball rolling, with Citigroup, JPMorgan, Bank of America, and Wells Fargo scheduled to print their quarterly numbers over the next few days.
Major Market Mover(s):
Sterling had a stellar performance in the earlier session and was able to squeeze out a few more gains before pausing from its climb as profits were locked in.
GBP/USD rallied to a high of 1.3188 before retreating to 1.3129, GBP/JPY topped at 148.57 then ended at 147.89, EUR/GBP is up to .8940, and GBP/AUD made one more push higher to 1.6956.
Signs of risk aversion were seen in the New York session as equities dipped and bitcoin surged, leaving the higher-yielding Kiwi to suffer the brunt of the losses.
NZD/USD dipped to a low of .7055, NZD/JPY is testing support at the 79.50 minor psychological mark, EUR/NZD climbed to a high of 1.6640, and GBP/NZD is at the 1.8600 handle.
Watch Out For:
- 12:01 am GMT: U.K. BRC retail sales monitor y/y (1.3% previous)
- 12:50 am GMT: Japanese current account balance (1.98T JPY surplus expected)
- 1:30 am GMT: Australia’s NAB business confidence index
- 4:20 am GMT: RBA Assistant Gov Debelle’s testimony
- 6:00 am GMT: Japan’s Economy Watchers Sentiment index (rise from 49.7 to 49.9 expected)