OPEC keeps traders on edge

Chris Beauchamp IG

The FTSE 100 is ten points higher in early trading, with investors around the globe keeping a nervous eye on the OPEC meeting.

Happy OPEC Day
Fed minutes fail to unnerve markets
UK GDP takes a knock

Welcome to a day dominated by OPEC headlines. Compared to the tedium of the past few days, it will actually be nice to see some movement across markets, something we have already had with the Saudi oil minister airing his quaint view that no more production cuts are needed. This caused a swift dive in oil prices, unsurprisingly, but we can expect more of the same throughout the day. Traders arrived at their desks this morning having seen the Fed minutes warn of overvaluations in asset prices, and hint at further policy tightening later in the year, and yet were confronted with new record highs in the S&P 500 and the MSCI world index, while the US dollar is under pressure again. What an odd
world we live in.

A downward revision to UK growth estimates may be just the thing to finally halt the snail-like grind higher in GBPUSD that has taken place over the past six weeks. Spikes above $1.30 have been firmly sold over the past week, so it looks like the sterling bears have just been handed some more reasons to keep selling. Ahead of the open, we expect the Dow to start at 21,082, up 70 points from last night’s close

Author

Chris Beauchamp

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