Forex today: OPEC was the focus sending WTI off a cliff by circa $4.00

Forex today was all about OPEC with oil tanking.

Stocks were rallying along with the DXY.  Commodity currencies were left licking their wounds by the end of the volatility at the close. 

The Organization of the Petroleum Exporting Countries’ decision to extend production cuts by nine months. The market was caught long, expecting OPEC to make deeper cuts to output or perhaps just keep the agreement in place for another year.  This sent WTI about $4.00 lower on the session between $51.67 and $48.13 the low. 

The US dollar caught a bid but interest rates were stable. DXY rebounded during the London morning, but the momentum dropped at 97.28 highs and ends the US session slightly lower at 97.18 compared to the close of prior 97.23, -0.05% for the day.  "US 10yr Treasury yields ranged sideways between 2.24% and 2.27%, while 2yr yields firmed slightly from 1.28% to 1.30%," explained analysts at Westpac, noting that the Fed fund futures yields firmed slightly, now pricing a June rate hike as an 85% chance.

The EUR is down -0.11% on a scarce calendar and some holidays in Europe keeping the single currency stuck to familiar ranges. GBP is -0.24% lacking directional strength, with a neutral daily basis after a bearish London session after the second revision of UK Q1 GDP that came as initially estimated at 0.3%. The YoY reading fell in at 2.0% missing the prior and expected of 2.1%. 

The yen, down +0.29% vs the greenback, was confined to limited ranges in the US session awaiting Japan's National and Tokyo CPI figures today. EUR/JPY was supported by a bullish Wall Street and ends the day +0.19%. The commodity bloc wore the brunt of the US session's OPEC news with AUD down -0.61%, Kiwi -0.26%, NOK down -0.85% and CAD down -0.55% vs the greenback. Gold, -0.21%, was losing sight of the psychological 1,260 with a double top at 1,25.81 pressured by WTI and DXY. 

The day ahead

Analysts at Westpac offered the key events risks for the day ahead:

"Japan: Apr CPI last came in at 0.2%yr in Mar. However, the positive move in inflation has been driven by energy prices, with core CPI posting -0.1%yr in Mar - the first yearly decline since mid-2013.

US: Apr durable goods preliminary is expected to fall 1.8%. This follows a 1.7% rise in Mar but this was driven by the volatile civilian aircraft component, with core orders up 0.8%.  Q1 GDP second estimate is expected by Westpac to be revised up to 1.0%ann’ (consensus is 0.9%) from 0.7%ann’ (market 0.9%ann’). May Uni. Of Michigan consumer sentiment could be affected by controversy in Washington but it has so far been resilient, though a clear partisan divide remains present.

Fedspeak involves Bullard on the economy and policy in Tokyo, and Williams speaks on Sunday on Asian banking and finance in Singapore."

Key notes from the US session

• US stocks open higher for sixth consecutive session, S&P and Nasdaq hit fresh record highs
• Fed's Brainard: Upward revisions to global growth will continue
• OPEC, non-OPEC oil output cuts remains about 1.8 million barrels per day - REU
• Iran Oil Minister confirms OPEC, non-OPEC rollover of nine months
• Bitcoin reverses course after another record setting rally