COMMODITIES: Crude Edges Lower Ahead Of OPEC+ Meeting, Gold Declines
Jul-03 18:45
- Oil has been struggling for direction today ahead of the next OPEC+ meeting at the weekend where numerous reports suggest a further 411kbd hike for August is being discussed.
- WTI Aug 25 is down by 0.7% at $67.0/bbl.
- Oil saw some support earlier in the day when Washington announced further sanctions on Iran’s oil tankers.
- WTI futures maintain a softer tone following the reversal from the June 23 high. Support to watch is the 50-day EMA, at $64.84, which has been pierced. A clear break of it would signal scope for a deeper retracement towards $58.87, the May 30 low.
- Initial resistance to watch is $71.20, the 50.0% retracement of the June 23 - 24 high-low range.
- Meanwhile, spot gold has fallen by 0.8% to $3,329/oz, paring losses slightly in tandem with a pullback in the USD index, after coming under some pressure following the stronger-than-expected US NFP print.
- Spot has notably found support at the trendline drawn from the December 2024 low, reinforcing the idea that the earlier breach of that trendline last Friday was a false break.
- Initial resistance is today's session high of $3,365.8, clearance of which would expose the June 16 high at $3,451.3.
- Key support and the bear trigger remains the June 30 low at $3,248.7.
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ECB: Macro Since Last ECB: Inflation - Hot Services Trend But Less Than Mid-2024
Jun-03 18:42
- The ECB’s seasonally adjusted HICP data for May saw services inflation pull back abruptly to 0.17% M/M from what had been a particularly strong 0.70% M/M.
- It saw 3M/3M momentum ease to 3.95% annualised from 4.10% in April.
- That’s comfortably above the 3.24% Y/Y but less worrying than a previous trend based on residual seasonality considering the previous similarities with last year’s momentum acceleration to a high of 5.2% in May 2024.
BOC: June Decision Preview: Several See A "Coin Toss" Decision (3/3)
Jun-03 18:40
Other analysts are largely leaning toward a hold but several note the "coin toss" nature of Wednesday's decision.
- Goldman and HSBC look for a cut, with ING seeing it as a "50/50 call".
- See below for a summary of expectations:
ECB: Macro Since Last ECB: Inflation - Services Moderate After Easter Boost
Jun-03 18:40
- The two months of inflation data since the Apr 17 decision will have on balance boosted the ECB’s confidence that it remains on a disinflationary path.
- It has been bumpy though, with a strong uptick in services inflation in April although expectations that this was linked to the later timing of Easter this year have been supported by today’s (Jun 3) preliminary data for May.
- Specifically, services inflation shifted from 3.68% to 3.45% Y/Y in March (a negative Easter impact), known ahead of the ECB decision, before jumping to 3.98% Y/Y in April (positive Easter impact). Since then, latest data show a meaningful moderation to 3.24% Y/Y in May for a sizeable undershoot of the circa 3.5% expected by analysts ahead of last week’s national level data.
- Separately, non-energy industrial goods inflation was stable in May as expected, at 0.63% Y/Y after 0.57% April. Potential reallocation of China exports that would have gone to the US, may start to weigh on durable goods prices later in Q2 but there aren’t any clear signs of that happening just yet in the hard inflation data.
