Following last week’s relatively heavy losses, crude prices rallied yesterday and both oil contracts were sharply higher again today with Brent trading around $49.50 per barrel and WTI almost at $48.20 at the time of this writing. Sentiment on the oil market turned positive when Saudi Arabia’s energy minister announced yesterday that his country's oil exports will be reduced by a good 600 thousand barrels per day in August to 6.6 million bpd.
A sense of caution seems to be the theme for the financial markets as trading gets underway for the week, with investors braced and preparing for an incredibly busy week packed with both crucial economic reports and major risk events.
The U.S. dollar is weaker against most of the majors after a week where there was little on the U.S. economic calendar with the spotlight on Washington's rising political tensions. The investigation into Russian ties during the presidential election, the lack of momentum in policy reform put the emphasis on political uncertainty that punished the U.S. dollar.
As we enter the business end of the week, the United States will be in focus with a large number of data scheduled to be released including some important labor market numbers and surveys on the services sector.
A joint meeting of the Federal Open Market Committee and the Board of Governors was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, June 13, 2017, at 1:00 p.m. and continued on Wednesday, June 14, 2017, at 9:00 a.m.
Central bankers will be the center of attention over the next couple of days, with a number of policymakers appearing, including Federal Reserve Chair Janet Yellen, ECB President Mario Draghi and the Bank of England Governor Mark Carney.
Information received since the Federal Open Market Committee met in May indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year.
The British pound/U.S. dollar currency pair started the day how it ended yesterday: higher. Speculators were still feeling bullish after the stronger UK inflation figures had raised the prospects that the Bank of England may turn hawkish. However, the gains were short-lived as the cable headed back lower after UK average weekly earnings came in at 2.1% earlier versus 2.4% expected. This was the lowest level since late 2014.