Bullet Report: Oil prices surge 5% as non OPEC Countries cut Production. FOMC ahead.

Markets are expected to have a quiet start in anticipation of a very big week. There is no news on the calendar today, however this week is headlined by Wednesday’s FOMC decisions where the FED is widely expected to raise interest rates by 0.25%. The main focus will be as always though on the economic projections for 2017. Markets are for now pricing in a 50% chance of a rate hike in June to July, mostly due to Donald Trump’s expansionary policies. Markets are also digesting last week’s ECB message and the non OPEC oil producers deal that was agreed this weekend.

Currencies: The week has opened with a surge in oil prices of about 5%. As a result, countries’ currencies who export oil, have seen a strong boost this morning against the USD. EURUSD remains under pressure since the message passed from ECB President Mario Draghi last Thursday was considered as pessimistic as to the outlook of the EU economy. The ECB announced on Thursday that it will extend its bond-buying program longer than many investors had anticipated, although it trimmed the size of its monthly purchases. GBPUSD remains stable, as investors will look forward to this week’s BoE Rate announcement. For this week, markets will focus on the FED’s rate decision on Wednesday where the meeting is likely going to be a catalyst for further USD strength.

Stocks: Last week, U.S. stocks were higher after the close on Friday with the Dow Jones gaining 0.72% to hit a new all-time high, while the S&P500 climbed 0.59%, and the Nasdaq gained 0.50%. This morning in Asian trade, stocks are mixed with Nikkei rising 0.50% while Australia’s ASX is marginally lower.

Oil and Gold: Oil jumped 5% to as high as $54.51 today, a level not seen since July 2015, after oil producing nations agreed to cut production, including Russia. The move would come on top of the cut of 1.2 million barrels a day agreed to by OPEC in late November. The total reduction represents almost 2% of the global supply. The market got an extra boost of on reports that Saudi Arabia indicated that, if necessary, the kingdom may be willing to take a deeper cut than the 486,000-barrel cut it had agreed in the November meeting. The production-cut deal will take effect Jan. 1, and the oil producers will meet again in six months to assess the deal. Gold dropped to as low as $1254 last night, a level not seen since the last week of January 2016

The post Bullet Report: Oil prices surge 5% as non OPEC Countries cut Production. FOMC ahead. appeared first on Forex.Info.

Source:: Bullet Report: Oil prices surge 5% as non OPEC Countries cut Production. FOMC ahead.