Markets in cautious mood after OPEC shock - 4.4.2023

The Dollar weakening has stalled currently. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, lost 0.3% on Monday.

Both GBP/USD and EUR/USD reversed their sliding on Monday as SP Global’s final manufacturing PMI report indicated the strongest monthly performance in factory output in euro area since May last year. Both Pound and euro are higher against the dollar currently. USD/JPY reversed its advancing yesterday while AUD/USD reversed its retreating with both the yen and Australian dollar lower against the Greenback currently.

Futures on three main US stock indexes are mixed currently with the yield on benchmark 10-year Treasury notes up at 3.434%. US stocks closed mixed on Monday, with three main stock benchmarks recording daily returns in the range from -0.3% to 0.98% after the Institute for Supply Management data indicated economic activity in the US manufacturing sector contracted in March for the fifth consecutive month to recession levels and post-COVID low. Energy sector shares surged however after Saudi Arabia and other OPEC+ oil producers announced unexpected output cuts.

European stock indexes futures are mixed currently after closing down Monday with financial shares leading losses while energy shares jumped. Asian indexes futures are mixed today with Australia’s All Ordinaries ASX 200 Index futures leading gains as the Reserve Bank of Australia paused its year-long rate hiking campaign.

Brent is extending gains currently. Prices jumped more than 6% on Monday after the OPEC+ group surprised markets on Sunday with plans to cut more crude oil output. Organization of the Petroleum Exporting Countries and major oil producers including Russia, a group known as OPEC+, announced that it will lower its production target by another 1.16 million barrels per day after a 2 million barrel cut last October. US West Texas Intermediate WTI jumped 6.3% and is higher currently. Brent rallied 6.3% to $84.93 a barrel on Monday.