At the end of the first business week of March the economic calendar is not too hectic. The most important publications today include the January balance of trade from Canada, and the February non-farming payrolls and unemployment rate reports from the United States. Aside from the jobless rate, the US will also publish a flood of earnings reports. In Europe, it is Spain’s turn to report its consumer confidence index for February.
Arguably the most interesting developments today will be in the oil market. At yesterday’s OPEC+ meeting, the oil-exporting countries agreed not to increase their quotas in April. This decision was quite unexpected, considering some members (and non-member Russia) have spoken about wanting to sell more oil at past meetings.
In any event, the outcome of the meeting translates into a lower than expected supply of oil next month. Considering that some countries are gradually reopening their economies, the demand for oil is set to increase. Thus, oil prices have increased to pre-pandemic highs and may hit $70-$80 per barrel by the end of March.
As of the composition of this article the Brent crude is trading at $68.56, while the WTI is near $65.44 per barrel.
Also carrying over from yesterday is the news that the Federal Reserve will not take any action at the moment, despite an improvement in the economic fundamentals published in the United States. Jerome Powell’s statements yesterday contributed to a further increase in the yields on US Treasury bonds.
The US stock market is expected to open in the green, but just barely. US stock indices suffered significant losses yesterday and may struggle to strengthen in the current investment climate.
In contrast to the United States, China is continuing to disappoint the markets. After a few lackluster economics reports, today Premier Li Keqiang said the country expects an annual growth of 6%, which is close to 2% lower than the IMF’s expectations of China. The country is likely preparing to remove some stimulus from its economy on account of rising debt.
