Summary:
- US and Canadian trade data in the spotlight amid simmering trade tensions
- Oil prices bounce back ahead of the DoE release, API produced a heavy draw in inventories
- ECB and BoE speakers on the agenda, stay tuned ahead of the ECB meeting
It looks that Wednesday will be dominated by commodities and related currencies given what we’ve got in the calendar today. On top of that, having the ECB meeting scheduled for next week it seems to reasonable to put more emphasis on ECB speakers especially in the wake of some leaks which surfaced yesterday.
8:15 am BST - Switzerland CPI: In case of the Swiss economy inflation is a minor data as the bank remains stubbornly dovish and nobody expects it to change in the foreseeable future. However, having regard to building price pressure elsewhere it’s worth looking at each inflation release. The May’s figure is forecast to bounce to 0.9% from 0.8% in y/y terms.
1:30 pm BST - US and Canadian trade data: The G7 summit takes place this weekend and some expect it could bring up topics pertaining to tariffs as well as NAFTA negotiations. Let us recall that Canada refused on Tuesday to move to bilateral talks with the US setting Mexico aside. Then, US Treasury Secretary was to call on Trump to exempt Canada from painful steel and aluminium tariffs being another sign that trade frictions between Canada and the US have become much softer, and incomparably less brutal as those between Mexico and the US. Canada’s merchandise trade balance is anticipated to produce a 3.4 billion CAD deficit whereas US trade balance ought to bring a 49 billion USD shortage as well, the same as it was in March (both readings are for April). At the same time Canadian building permits will be released.
3:30 pm BST - DoE oil inventories change: Oil priced were rattled on Tuesday following the news that the US has asked the OPEC to build its production by 1mbpd (the market’s reaction was quite notable given that similar comments had been already released one and a half week ago). Nonetheless, oil prices were rescued a bit when the API published its calculations showing a 2 million barrels draw in inventories (stockpiles in Cushing fell 1 million barrels). On the other hand, gasoline saw a major increase of 3.76 million barrels implying a possibly lower demand on raw crude by refineries. The DoE oil inventories change is estimated at -2.2 million barrels while gasoline is to increase just by 0.16 million barrels, so major focus could be on gasoline today.
Central bank speakers for today:
- 10:00 am BST - ECB’s Knot
- 2:30 pm BST - ECB’s Hakkarainen
- 3:00 pm BST - NBP’s Glapinski
- 4:00 pm BST - BoE’s McCafferty
- 6:10 pm BST - ECB’s Angeloni
WTI prices have fallen to the crucial support line, and they’ve bounced off since then. This week is going to be remarkably significant for the future of US oil. Source: xStation5
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