Oil prices gained more than 6% on the back of the agreement
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Market movers today
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German and Spanish inflation releases – inflation is expected to rise as base effects are fading. In addition, we have a couple of ECB speeches but we do not expect new info to the markets.
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In the US, we have a number of Fed speeches including one from Yellen. Most of the speakers are fairly neutral, so we do not expect much new information from the speeches.
Selected market news
Yesterday, OPEC agreed to a preliminary deal that will cut production for the first time in eight years. Oil prices gained more than 6% on the back of the agreement, which will reduce production to a range of 32.5-33m barrels per day from 33.2mb/d currently. Many of the details still need to be clarified and the targets countries will get has yet to be agreed on.
The rally in the oil price was supportive for the US stock market, while US Treasury yields rose. The rally in the stock market was driven by energy producers and S&P ended up at 0.5%.
The Asian equity markets have followed the positive trend from the US this morning as the markets have risen across the region on the back of the OPEC deal and higher oil prices. Oilrelated currencies such as the Norwegian krone and the Malaysian ringgit have strengthened, while the yen has weakened modestly against the other major currencies.
Retail sales in Japan for August published this morning fell for the first time in three months and show the challenges for the Japanese economy, even though sales were affected by bad weather and fewer weekends. On Friday, a string of data on the Japanese economy is due to be released such as household spending, employment, inflation and industrial production, which will give a fuller picture on the recent performance of the Japanese economy.
Author
Jens Peter Sørensen
Danske Bank A/S
