OPEC Plus results, Retail Sales in Europe, and NFP Ahead

Yesterday was marked by the main event for the financial markets: the OPEC Plus meeting. It’s not a secret for anyone that it’s the alliance of 23 countries. Today it determines the oil market situation, at least in terms of its supply. The markets were expecting a decision to increase production by 0.5 mln bpd, as well as Saudi Arabia’s refusal to voluntarily cut production by 1 mln bpd from April.

At the same time, Saudi Arabia was in favor of not changing anything in overall quotas so far, that is, it was against an increase in production by 0.5 million b/d. And Russia, on the contrary, was in favor of increasing production.

As a result, Saudi Arabia won again. The status quo has been preserved and oil has received a strong reason for growth in the form of the lack of additional supply in the market in the amount of 1.5 million b/d in April.

Treasury yields jumped up again yesterday. And Powell in his speech didn’t even think to calm the markets, saying that the Fed sees everything, but is not going to do anything. So, the sell-off in the stock markets intensified. Gold and cryptocurrencies have also been pressured.

Quite a lot of important macroeconomic statistics were also released yesterday. Retail sales in the Eurozone came out frankly weak (almost – 6%, which is 5x worse than expected). So it’s no surprise that the euro was under pressure. Especially when you consider that European countries—one by one—due to the worsening pandemic situation, they’re tightening restrictions and extending lockdowns.

The data on applications for unemployment benefits from the United States also cannot be called over-optimistic. Although they came out slightly better than forecasts, they were not enough to instill confidence in the markets on the eve of today’s NFP data. Markets are waiting for about 200K, which is quite optimistic in our opinion. So we won’t be surprised if the data comes out worse than the expert forecasts.

In addition to the US labor market statistics, today is still interesting due to the results of the vote in the Senate on the Biden stimulus package.

In general, the day promises to be extremely eventful and difficult.