Early news flow during the timezone was that EU leaders had agreed to oil sanctions on Russia. In brief (see bul
Early
news flow during the timezone was that EU leaders had agreed to oil
sanctions on Russia. In brief (see bullets above for more):
- the
ban on Russian oil exempts oil that comes through pipelines – this
allows dependent states (basically Hungary) to continue importing - shipped
(sea-borne oil imports) Russian oil, accounting for 2/3 of EU
imports, will be banned - Germany
and Poland will stop oil imports via the Druzhba pipeline by the end
of the year
The
price of oil has continued to gain right through the session. As I
post WTI futures are above $118.
The
data focus for the session were the China PMIs for May. These are the
official PMIs (the privately surveyed PMIS will follow in the days
ahead this week). The results showed improvement but both
manufacturing and services (and the composite, of course) remained
under the 50 point to be in contraction:
Manufacturing 49.6
- expected 48.0, prior 47.4
Services 47.8
- expected 45.2, prior 41.9
Composite 48.4
(See
bullets above for more).
We
also had a data dump from Australia. Tomorrow brings Q1 GDP data. The
‘partials’ so far leave a contraction in GDP a possibility for
Q1, but today’s inventory data showed a very strong gain – this
will be a big positive input to the GDP calculation and looks very
likely to ensure GDP did not contract in January – March.
As
a heads up, there is further inflation data coming up out of Europe
today (0900 GMT):
Also,
during US time, US President Biden meets with Powell and Yellen in
the Oval Office to discuss inflation. That’s at 1.15pm Washington
time (1715 GMT)
FX rates had swings during the session, characterised by strengthening for the US dollar. EUR, yen, GBP, AUD, CHF, NZD, CAD all lost ground against the big dollar. CAD found some support from the rising oil price, which kept its loss against the USD subdued. If you scan through your charts you’ll see rebounds for all of those I have mentioned, but none have retraced fully, some not much at all.
Oil:
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