Oil saw a spike in prices, under fears that an interruption of production might be caused by tropical storm Cindy. At this point in time, estimations are showing a potential of 17% drop in production from Mexico and the Gulf of Mexico region. Another reason oil price may increase is Saudi Arabia’s new crown Prince, which is looking into ways to increase oil prices. This has forced analysts to reevaluate their stance on oil, with its future being at best speculative.
What to Expect – Purchasing Manufacturer’s Indices German, France, EUNews from the EU today is the Purchasing Manufacturers’ Indices (PMIs). Both EU and German indices are forecasted to drop slightly, which might impact the euro, but the effect is likely to be minute considering the recent gains EUR has gained.
Also Canada’s CPI will be announced today, with forecast showing it between 1% to 3%.
Globally interest rate decisions have been dovish, with the BoE, ECB along with BoJ and SNB holding their previous rates – this may be the same outcome for the Canada’s rate – depending on the outcome of its CPI.
The US Markit manufacturing PMI is showing signs that it might see an increase, while the PMI for the service sector is expected to fall.
The disparity between the movement of the US and EU manufacturing PMI may negatively affect the EUR/USD, although this unlikely to be long term.t
US new home sales will likely grow in May after their abrupt drop in April. .If this holds true, it could even bolster the price of the USD slightly.
Oil investors are eagerly awaiting the Baker Hughes oil rig count even though the forecasts are widely differing , although rumors coming out of Bloomberg say that the number will likely come up to 938 with the addition of 5 new rigs.On the other hand though reports from the industry are hinting towards few rigs being added breaking a 23 week increase which in turn would cause oil prices to increase.
This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.