IronFX Daily Commentary by Sakis Paraskevov | 18/01/2016
January 18, 2016 9:54 am
Oil extends declines on Iran sanctions fallout • The UN nuclear agency declared on Saturday that Iran had fulfilled the conditions of its nuclear agreement. As such, Western sanctions on the country’s oil exports have now officially been lifted. • Iran holds approximately 10% of confirmed global oil reserves. The deputy oil minister stated on Sunday that crude oil exports are ready to increase by half a million barrels per day, with plans to add another half a million over a few months. • The global oil glut along with the weak demand due to China’s slowdown, drive oil prices lower. Thus, we could see oil related currencies such as CAD and NOK remaining under selling pressure.
Today: • Sweden: Riksbank will release the minutes of January’s extraordinary policy meeting. At this meeting the Bank gave the Governor additional powers to be able to intervene in the FX market. The minutes of the meeting could give us hints regarding under what circumstances the Bank may intervene, as it stated that there is no target for the exchange rate.
This week: • Tuesday: China’s GDP growth for Q4 is expected to have slowed down. The UK CPI rate for December is forecast to have accelerated. Germany’s ZEW survey is expected to show that both indices declined in January, which could put EUR under renewed selling pressure. • Wednesday: Bank of Canada policy meeting. At their last meeting the BoC highlighted reduced business investment and job losses in the energy sector. Since oil prices continued to fall since then and Governor Poloz left the door open for further cuts, we expect the Bank to lower rates in the foreseeable future, if not at this meeting. Also, the US CPI rate for December is expected to have accelerated. The UK employment report for November is forecast to show slowing wage growth. • Thursday: ECB policy meeting. Since some members of the Governing Council stated they are skeptical about further policy action in the near term, we expect no change in policy at this meeting. • Friday: France, Germany and Eurozone preliminary Markit manufacturing PMIs for January. All PMIs are forecast to decline or remain unchanged. The UK retail sales for December are expected to have fallen, which could weaken GBP.
Oil extends declines on Iran sanctions fallout
• The UN nuclear agency declared on Saturday that Iran had fulfilled the conditions of its nuclear agreement. As such, Western sanctions on the country’s oil exports have now officially been lifted.
• Iran holds approximately 10% of confirmed global oil reserves. The deputy oil minister stated on Sunday that crude oil exports are ready to increase by half a million barrels per day, with plans to add another half a million over a few months.
• The global oil glut along with the weak demand due to China’s slowdown, drive oil prices lower. Thus, we could see oil related currencies such as CAD and NOK remaining under selling pressure.
Today:
• Sweden: Riksbank will release the minutes of January’s extraordinary policy meeting. At this meeting the Bank gave the Governor additional powers to be able to intervene in the FX market. The minutes of the meeting could give us hints regarding under what circumstances the Bank may intervene, as it stated that there is no target for the exchange rate.
This week:
• Tuesday: China’s GDP growth for Q4 is expected to have slowed down. The UK CPI rate for December is forecast to have accelerated. Germany’s ZEW survey is expected to show that both indices declined in January, which could put EUR under renewed selling pressure.
• Wednesday: Bank of Canada policy meeting. At their last meeting the BoC highlighted reduced business investment and job losses in the energy sector. Since oil prices continued to fall since then and Governor Poloz left the door open for further cuts, we expect the Bank to lower rates in the foreseeable future, if not at this meeting. Also, the US CPI rate for December is expected to have accelerated. The UK employment report for November is forecast to show slowing wage growth.
• Thursday: ECB policy meeting. Since some members of the Governing Council stated they are skeptical about further policy action in the near term, we expect no change in policy at this meeting.
• Friday: France, Germany and Eurozone preliminary Markit manufacturing PMIs for January. All PMIs are forecast to decline or remain unchanged. The UK retail sales for December are expected to have fallen, which could weaken GBP.
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