Daily Market Update – February 13

OPEC Reports Drop in January Oil Output

January oil production fell by 890,000 barrels a day compared with December, OPEC reoprted, confirming that its members have so far largely complied with an agreement to slash output. The reports revealed OPEC members achieved 93% of the pledged 1.16 million cut.

In reaction oil futures are trading lower shortly before the cash market opening. Crude Oil is trading at $53.44 a barrel down 0.80% while WTI crude oil is trading at $56.20 down 0.90%.

Yen Falls After Trump-Abe meeting & Softer Japanese GDP

The markets continued to respond to the Trump–Abe meeting on Friday, with risk appetite improving through the Asian and European session, the Yen down 0.57% on the day going into the US session.

The yen moved lower following a softer than expected Japanese GDP report for the Q4 which showed that growth slowed in the world’s 3^rd largest economy to 1% compared to expectations of a 1.4% forecast.

US Dollar Eases Before Yellen Testimony

As things stand it will be tough for the markets to expect the FED Chair to suggest a possible rate hike in March, particularly with only voting member Harker talking of March being a live meeting. While the view is that rates are on hold until the summer, one thing is certain, some direction is needed on monetary policy, as Trump embarks on economic reforms and hiding behind the U.S President and uncertainty is unlikely to be acceptable.

Traders await Yellen’s two-days of testimony starts on Tuesday to enhance clarification from policy makers and to get more signals regarding the next rate hike.

U.S. Dollar Index futures are trading nearly flat shortly before the regular session opening at 100.75, down 0.03% trading stably during European session.

European Commission Raises its 2017 Growth and Inflation Forecasts

The European Commission raised its 2017 growth forecast for the Eurozone to 1.6% compare to 1.5%. In addition, the comission suggested that the European economy is expected to grow by 1.8% in 2018, up from previous forecast of 1.7%.

The commission also upgraded inflation forecast to 1.7% in 2017 from 1.4%.

The EUR/USD is trading flat at the mid-session. The pair is trading inside Friday’s range which suggests investor indecision and impending volatility.