The market’s attention was focused on OPEC’s meeting in Vienna. The extraction quota was left unchanged. According to official numbers, the cartel currently pumps out over 30 million barrels a day. In Iraq, Russia, Saudi Arabia and the USA, extraction is the highest it’s been for many years. If negotiations between leading world powers and Iran end up in the removal of sanctions, Iranian oil will flood the market.
Some shale producers in the US say that if the price stabilizes above $60 a barrel, they could increase production. Over the past few weeks, futures on American oil have broken that mark a few times but haven’t quite managed to build on it.
It’d be worthwhile waiting for the closing announcements which will affect oil quotes which are at $62.50. Iran, Iraq, Venezuela and Angola are trying to get the cartel to support the price at 75-80 dollars a barrel.
Some data on initial unemployment benefit applications in the US was published yesterday. The values had fallen to 276,000 from a previous of 284,000 and against an expected 280,000. This positive data facilitated a decent rise for the dollar.
The IMF made an announced that the US Fed should put off putting their rates up until 2016 when the signals for inflation in goods and wages will be clearer. The US doesn’t and is unlikely to listen to any advice given to it, whether from the IMF or not.
In the IMF’s report it was shown that a strong dollar and poor weather conditions have weakened the impulse for employment creation and economic growth. These negative events have forced the fund to lower their forecast for US GDP to 2.5% this year (previous April forecast: 3.1%).
Greece isn’t in the state where it can pay up its 339 million dollar debt today and instead will amalgamate its four June debt payments, totaling 1.7 billion dollars, into one at the end of the month. Negotiations are still ongoing and there’s still a lot of disagreement.
The amount of new orders in April in comparison with that of March, taking into account seasonal factors, rose by 1.4% in Germany against an expected 0.5%. Values for the export orders grew by 5.5% in April in comparison with March and Eurozone orders increased by 6.8%. Orders from non-euro states hit 4.7% and orders from within the market fell by 3.8%.
The euro/dollar is trading at 1.1225 in expectation of a labor market report in the US. There’s reason to believe that the labor market data will be better than expected. If so, the euro/dollar pair will lose its recently won gains and head back to 1.1.
Today it’s worth having a look at the publication at the NFP results and the unemployment rate in the US and Canada. It’s also worth having a listen to what William Dudley, member of the FOMC, has to say.