Morning brief for May 15
Brent oil futures jumped to $51.65 on the report from Saudi energy minister Khalid Al Galih and his Russian counterpart Alexander Novak had agreed to extend oil output cuts by OPEC and non-OPEC producers through the end of the first quarter of 2018 to shrink oil supply. The ministers from the OPEC states are due to meet May 25 in Vienna to discuss an extension of cuts. It’s not until there that any extension would be officially agreed to by OPEC. But the agreement between the two largest oil producers and exporters is a good sign for the positive result of the OPEC’s discussion at Vienna’s meeting.
USD/CAD slumped to 1.3675 on the announcement. Loonie might strengthen further towards the lower border of 1.3670 - 1.3790 consolidation range.
EUR/USD extended its Friday’s gains to 1.0930 as Merkel tightened her grip on power on Sunday. German Chancellor Angela Merkel’s party won the elections in the country’s most populous state - North-Rhine-Westphalia. This victory highlights Merkel’s backing among voters ahead of the national election scheduled for September (German Chancellor made a name for herself as a leader who can hold the European Union and Eurozone together). EUR/USD’s strong rebound is still not strong enough to shift out current neutral outlook to bullish. There is a strong resistance near 1.0980 that needs to be broken for the more pronounced upsurge. Today’s trading should be a bit subdued as the economic calendar for EUR/USD is light.
USD/JPY edged up to 113.40. From here, the pair will likely be trading rangebound (within 112.80 – 114.35 consolidation range). There was a cyber-attack in the weekends that might spread on Monday as soon as employees return to work turning on their computers. The investors seem to be unalarmed as we observe the weakening of risk-averse assets.
Aussie inched up to 0.7400 in the early Asian session. AUD/USD has steam for a further upsurge towards 0.7430/0.7440 resistances. The missing Chinese data passed by with little reaction.
Kiwi gained a few points following the upbeat NZ retail sales releases. NZD/USD has a room for further extension towards the nearest hurdles at 0.6885/0.6900.