Markets Continue to React to OPEC+ Update
Global markets once again experienced high volatility yesterday as investors digested the implications of OPEC+’s surprise output cuts. Stock markets had a mixed day across the board with the major US indices reflecting the overall global market’s reaction, the Dow finishing up 0.98%, the S&P up 0.37% and the Nasdaq closed 0.27% in the red – this greatly influenced by a slump in Tesla shares. Currencies also had a mixed day with the dollar originally appreciating on the news before being hammered later in the day, this move was also helped by a lower print on the ISM Manufacturing PMI number.
RBA In Focus Today
The Reserve Bank of Australia kicks off this month’s rate decisions later today and it could prove to be a very interesting announcement as economists are split on whether we see another 25bps or if they hold fire for the first time in 11 meetings. Bond markets are leaning firmly in favour of a halt with their pricing in a near 90% chance of no change, however, there is that chance that we do see one more hike in this cycle and if that is the case expect to see markets move swiftly. The Aussie dollar experienced a stellar day yesterday, first dropping to a low of 0.6655 as the market digested the OPEC supply cut before rallying strongly to trade just under the 68-cent mark, levels not seen since the end of February. A surprise hike today could see it push even higher against the greenback and on the crosses.
Central Banks and Data Loom for Already Sensitive Markets
The trading week starts to really get going today as central bank rate decisions and more data are added to the already volatile mix of sensitive markets coming to terms with the weekend’s OPEC+ output cut. First up for markets in the Asian session is the latest RBA rate decision with the market looking for the first ‘no change’ call after some weaker data prints in Australia adding to the uncertainty in global markets over recent weeks. The European session is bereft of tier 1 data releases however in the US the JOLTS job openings numbers are due early in the New York day and traders will be looking for this to add another data point to the Fed’s next call on rates.
