The main news of the week continues to be the shock decision by OPEC to cut crude oil production. Oil rallied after the news, as did a number of oil producers including the Canadian Dollar, Mexican peso, Norwegian krone and Brazilian real. The move took the markets by surprise, with the division between Iran and Saudi seen as too big to overcome at this point in time. The OPEC meeting outcome marks the first cut in production since 2008 in this historic decision.
Expectations for article 50 to be triggered imminently are beginning to grow, with negotiations forecast to begin early 2017. Data released yesterday signaled that prospects for the property market appear to be fading, after yesterday’s mortgage approvals fell to the lowest level in two years. Sterling continues to be fragile around the uncertainty of the UK’s relationship with the EU.
The week ends with several high tier data releases throughout the day. Firstly the UK will post the final Q2 GDP figure where it is set to remain at 0.6%, anything different seen here could inject further volatility into the pound. At the same time the UK current account is due to hit the wires. The current account is forecast to improve slightly to -30.5b and show further positive economic signs. The Eurozone is set to see their yearly inflation figure increase to a slightly more healthy 0.4%, up from the current 0.2%. Across the pond the US post their Chicago PMI in the afternoon which is anticipated to show an increase to 52.1.