Oil prices declined for a sixth consecutive week despite the latest announcement of production cuts by OPEC+. The organisation, which represents thirteen of the major oil producing countries from around the world plus Russia, agreed to deepen its current production cuts to 2.2m barrels of oil during the first quarter of next year[1]. It’s the latest attempt by OPEC+ to try and prop up the oil price having introduced cuts of 1.3m barrels per day back in April. However, Brent Crude posted a weekly decline of -1.6% to $78.97 with traders skeptical of whether the additional voluntary cuts will be sufficient enough or if members will implement them fully.
Moving to global equity markets, US indices posted solid gains the S&P 500 adding +0.8% with gains broad based across its various sectors. European equities also enjoyed a solid week, the MSCI Europe ex UK and FTSE 100 rising by +1.3% and +0.6% respectively. Lower government bond yields were certainly supportive whilst weaker than expected CPI inflation in Europe added to growing optimism that the European Central Bank (ECB) could cut rates next year. Both ECB President Christine Lagarde and Bank of England (BoE) Governor Andrew Bailey have repeatedly dismissed increasing expectations of 2024 rate cuts although for the time being, investors appear to be paying little attention.
Elsewhere, the Shanghai Composite in China remained largely muted, falling by -0.3% in local currency terms. Mixed economic data added to concerns about the health of the economy amid slowing growth and considerable issues in its embattled property sector. Japanese equities also lost ground, the Nikkei 225 concluding the week -0.6% lower, likely on the back of profit taking after a particularly strong November. Last week also saw the Japanese government approve additional budget for its previously announced fiscal stimulus measures which are being introduced to limit the impact of ongoing inflationary pressures throughout the economy.
Week Ahead
Day | Country | Measure | Period | Forecast | Previous |
Monday | N/A | - | - | - | - |
Tuesday | China | Caixin Services PMI | November | - | 50.40 |
Europe | Final Composite PMI | November | 47.10 | 47.10 | |
UK | Final Composite PMI | November | 50.10 | 50.10 | |
US | ISM Non-Manufacturing PMI | November | 52.00 | 51.80 | |
Wednesday | Europe | Retail Sales YoY | October | -0.90% | -2.90% |
Thursday | Europe | Revised GDP QoQ | Q3'23 | -0.10% | -0.10% |
Japan | Revised GDP QoQ | Q3'23 | - | -0.50% | |
Friday | US | Average Earnings YoY | November | 4.00% | 4.10% |
US | Non-farm Payrolls | November | 180K | 150K | |
US | Unemployment Rate | November | 3.90% | 3.90% |
Source: Refinitiv Workspace, 04/12/23
[1] OPEC – (30/11/23) Several OPEC+ countries announce additional voluntary cuts to the total of 2.2 million barrels per day [Press Release] https://www.opec.org/opec_web/en/press_room/7267.htm
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