Today we expect a number of reports from the United States. The most important among these are the non-manufacturing/services ISM and the employment change reports. It is expected that the ISM readings will show an increase and remain above 50, though recently the US economy has shown signs of wear and tear due to the prolonged trade war with China.
Later today there will also be a report on oil stockpiles by the Energy Information Administration. Bear in mind that crude oil is highly volatile right now due to the tension in the trade talks between the US and China.
Despite earlier hopes of an upcoming resolution, this week Donald Trump stated that he might wait to commit to a deal after the 2020 elections, which are a year from now. If the world’s two largest economies fail to reach an agreement, global demand for oil will continue to shrink. In light of this, OPEC member states are expected to agree to extend their production cuts well into 2020 to support the market at a meeting later this week.
Yet, reports on the current state of the negotiations between China and the United States continue to differ. Yesterday, President Trump said he might not sign a deal until next year’s elections. Today, Reuters reported that the phase-one agreement is in its final stages, and that the US has reportedly agreed to roll back some of the tariffs imposed on Chinese goods.
