Economic calendar: Oil could dominate this week

Summary:

• OPEC and non-OPEC meeting seems to be the paramount point in this week calendar
• Bank of England is expected to leaves rates unchanged, the outlook for a rate hike in August still blurred
• A set of preliminary PMI readings for June to be released later this week

Shortly after returning from the G7 and Singapore meetings Donald Trump expressed his uncomfort with high oil prices. The OPEC cartel will have a possibility to address his concerns next week and surely this decision will have a paramount impact on prices of the commodity. The calendar will be filled with events such as the Bank of England meeting and PMI releases in Europe.

The Monday’s session will not abound in any noteworthy macroeconomic readings, instead we will be offered an avalanche of central bank speakers including ECB’s Mario Draghi. On top of that it’s worth mentioning the RBA minutes are going to come out at 2:30 am BST (Monday/Tuesday).

Central bank speakers for today:

• 2:00 pm BST - Fed’s Dudley
• 5:45 pm BST - BoC’s Patterson
• 6:00 pm BST - Fed’s Bostic
• 6:30 pm BST - ECB’s Draghi
• 9:00 pm BST - Fed’s Williams

The top events for this week:

The OPEC meeting (Friday): It needs to be stated that the OPEC+ deal reached in 2016 has been highly successful. Oversupply has been limited and price recovery has been achieved. However, US withdrawal from the Iran deal led to a situation where oil could become scarce and prices could be disruptive to the economy. Even though it’s been caused by Trump himself, his pressure on Saudi Arabia to increase output could be successful. Indeed, the markets have started pricing in an increase in the OPEC output. The question is about the size and timing: any increase lower than 500kbd could be seen as a disappointment. In any case the meeting could have a huge impact on prices. Affected markets: OIL, OIL.WTI.

The Bank of England meeting (Thursday, 12:00pm GMT): Mixed data from the British economy plus lingering Brexit uncertainty do not act in favour of a sudden interest rate hike. However, the pound has already been repriced and the governor Mark Carney is always ready to surprise markets. Affected markets: GBPUSD, UK100.

PMI releases in the EMU (Friday, 8:00-9:00am GMT): The ECB heralded a termination of the QE program but it’s data conditional and it looks like the Bank wants to stay cautious on rates. Mario Draghi said he saw a possibility of “soft path” extended to the second quarter but markets may lose patience towards the euro unless they see an uptick in PMIs following months of declines. These releases are going to be watch with a lot of attention in Europe. Affected markets: EURUSD, DE30.

Brent prices are lower in the morning, but the more notable support zone might be localized at around $70.8 implying still some scope for bears. Source: xStation5