Weekend highlights: GOP failings, Merkel victorious, OPEC extending supply cut accord?

Ross J Burland FXStreet

After the GOP leaders postponed the vote on healthcare overhaul and delayed it to Friday, all eyes were on the event where the US House of Representatives were finally unable to agree on an alternative to the Affordable Care Act. The weekend headlines have rocked the markets at the open today with the dollar down against most of its rivals. "The healthcare failure called into question not only Trump's ability to get other key parts of his agenda, including tax cuts and a boost in infrastructure spending, through Congress, but the Republican Party's capacity to govern effectively," read an article by By David Lawder and Steve Holland at Reuters.

Elsewhere, The Organization of the Petroleum Exporting Countries and rival oil-producing nations met this weekend in Kuwait to review progress with their global pact to cut supplies. The ministers from OPEC and non-OPEC oil producing nations have agreed to review whether a global pact to limit supplies should be extended by six months. The original deal was to last six months, with the possibility of a six-month extension but there needs to be conformity with everybody for an extension to be agreed. If there is no extension, long positions could be unwound by a disappointed market pressuring the price of oil lower again.

On the political front for Europe, the weekend gave the pro-Europeaners a win with German Chancellor Angela Merkel’s party easily victorious in the elections in the western state of Saarland. This is only underscoring the challenge ahead facing Merkel's Social Democratic rivals as they seek to deny her a fourth term in September.

Ahead of the 2017 federal election sin Germany, this was the first test of Merkel's voter support. Her Christian Democratic Union took more than 40 percent to about 30 percent for the Social Democrats, according to projections by broadcasters ARD and ZDF after Sunday’s vote. The Left Party was projected third by winning 12-13 percent, while the anti-immigration Alternative for Germany at about 6 percent.

EUR/USD: early rally through key 1.0830, eyes on 1.0875 and 1.0935

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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