Today there are a couple of interesting events in the economic calendar.
First, the Reserve Bank of Australia had its monthly policy meeting. The RBA met investors’ expectations and chose to leave the interest rate unchanged at 0.1%.
In Europe, it is time for the ZEW economic sentiment surveys for July. The eurozone-wide index came in at 61.2, considerably lower than the previous one. Germany, the strongest economy in the EU, also failed to impress investors with a ZEW score of 63.3 against a forecast of 75.2.
Nevertheless, retail sales in the eurozone were better than anticipated at 9% in May.
Later today we expect the non-manufacturing PMI for June from the United States.
Arguably the most interesting news today pertains to the crude oil market. OPEC+ members failed to reach an agreement on output levels, largely due to the United Arab Emirates vetoing all of the solid proposals other countries were ready to back.
This means that for now, production output in August will stay the same and OPEC+ will have to reconvene next month to consider how to handle the months after that.
With that in mind, the Brent crude climbed to $77.39, while the WTI reached $76.41 per barrel. Breaching the psychologically important level of $80 seems quite possible in the near future, considering oil is currently at its strongest since 2014. However, be wary that the dissent within OPEC may lead to countries raising their quotas on their own, flooding the market.
As for the stock market, today US markets will open for the first time since Friday due to the long 4th of July weekend. All major indices will trade flat, perhaps with miniscule losses in anticipation of the PMI report later today, as well as the minutes from the Fed’s last, extremely surprising meeting, which are going to be published later this week.
Meanwhile, in the United Kingdom it became clear that all lockdowns will finally end on July 19. Prime Minister Boris Johnson confirmed that the government will not extend the lockdowns any further, confident that with more than half of the adult population vaccinated, the current outbreak of the delta Covid-19 variant is not going to pose a significant problem for the UK’s healthcare system.
