Brent crude hits 2019 high despite 7M DOE build
US stocks little changed after CPI and ECB
UK data perks up but markets retain Brexit focus
Emergency EU summit on Brexit to begin shortly
FOMC minutes at 7PM
For the second week running the DOE inventory release showed a major build, with a weekly increase of 7M well above the 2.5M expected. Last week’s release showed a rise of 7.2M. Tuesday’s API numbers showed a rise of 4.0M for the headline. An interesting aspect of this data point is the especially large drop in gasoline inventories which mirrored the API figures. The API reading of -7.1M for Gasoline was close to the DOE equivalent of -7.7M with the former being the largest drop since September 2017.
US stock markets this afternoon have begun little changed from last night’s closing levels, with the major benchmarks pausing after Tuesday’s declines. The selling seen yesterday was far from dramatic but it did mark the end of an 8-day winning streak for the S&P500 during the cash session and while it seems premature to call a top there is some suggestion that there’s a bit of a pullback ahead. As arguably the second most important central bank the ECB rate decisions always have the impact to drive global risk sentiment, and while we’ve not had any major developments from Frankfurt this lunchtime, Mario Draghi has struck a pretty dovish tone. As arguably the second most important central bank the ECB rate decisions always have the impact to drive global risk sentiment, and while we’ve not had any major developments from Frankfurt this lunchtime, Mario Draghi has struck a pretty dovish tone.
A batch of economic releases have painted a slightly better than expected picture of the UK economy with growth and production measures both topping estimates. However, the gains seen in the pound have been relatively small and measured in response, with currency traders remaining far more interested in the latest developments on the Brexit front. In what is the tenth release of month-on-month GDP figures from the ONS, there’s been some good news for the UK economy with an increase of 0.2% for February - above the 0.0% expected. This follows on from a 0.5% rise in January and an upwards revision to December’s decline and while the nature of this data means that it is inherently volatile, the overall trend has no doubt improved. Having said that, the pace of growth is still sluggish at best when viewed at a rate of 0.3% for the past 3 months and this is also artificially inflated by Brexit stockpiling so the true figure is likely lower.
The 28 leaders of the EU states are holding an emergency summit this evening as they discuss the UK’s proposal for a Brexit extension. Another event to watch out for in the coming hours is the FOMC minutes which are due out at 7PM.