Topic: APAC Corner: China Data Disappoints
The pound appears to have found some stability so far today, having been caught in a vicious downward spiral over the last week that sent it plummeting to an all-time low on a trade weighted basis, sparked by growing concerns over a so called “hard Brexit”. Prime Minister Theresa May appeared to alleviate some of those concerns when accepting that any deal would be put before parliament but still, it continues to look heavy and I’m seeing no signs at this stage that the sell-off has ended. I wouldn’t be surprised to see it take another dip back towards 1.20 against the dollar.
Oil markets will remain in focus today as we get data from EIA that is expected to show a five week run of inventory drawdowns has come to an end, which could pull prices back from the four month highs they currently find themselves at. A loose deal between OPEC that Russia could join in the coming months once details are finalised, combined with consecutive weeks of inventory drawdowns has seen oil surge around 15% in recent weeks to trade back above $50, where it has now run into some resistance. If we want to see $60 then details on the deal with have to be forthcoming and members will have to stick to it, something they have failed to do in the past. Even then, with the oil rig count on the rise again and likely to pick up faster as oil spikes, we could see US production increase again which could offset any output freeze by OPEC.