Awaiting a quiet end to September | Calamatta Cuschieri

Friday Recap

Following last Friday’s ups and downs in the European markets, due to the negativity of the latest aggression by North Korea; which threatened to test a nuclear bomb in the Pacific Ocean, there was also an upbeat PMI data in the Eurozone; which also confirms that the region’s economic activity is on the right track.

One must also mention UK Prime Minister Theresa May’s speech on future relations between Britain and the European Union Post-Brexit. May outlined her government’s principles for establishing a new relationship which includes new economic partnerships and security issues. Most notably, she suggested a transition period beyond 2019 in order for her country to adjust to the new arrangements “in a smooth and orderly manner”.

In the crude oil area, the commodity traded slightly higher with values remaining steady after major oil producers failed to reach an agreement on the extension of the output cut deal beyond March 2018. Earlier in the day, the OPEC members and other non-OPEC countries led by Russia, held a meeting where they were expected to conclude whether to prolong the oil production cap agreement or not. 

Earlier in December, crude exporters decided to cut the global oil output by 1.8 million barrels per day in order to battle the prevailing market oversupply that has been present for three years. The deal, which intention was to drive higher prices for oil, was first implemented in January this year and further extended in June. Several OPEC members recently hinted that further extension was also on the table. 

This week

The last week of September should be quiet, with US consumer confidence and durable goods being the key economic events to watch out for.  US Consumer confidence expected to fall whilst new home sales are on the rise. Earnings-wise, a trading statement from Imperial Brands is perhaps the most important event.

In Europe, ECB watchers will be parsing updated euro area inflation figures for clues as to the timing of the next ECB policy move. Whilst in the UK, the GDP numbers could also affect the Bank of England’s increasingly hawkish policy stance.

During the latest meeting of the Bank of Japan notes, which was held in Japan, showed that there was still the potential for more easing, and the minutes to be published on Wednesday may expand on this issue, which can see some market reaction.

Disclaimer: This article was issued by Rodrick Duca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.