Talking Points:
- Disappointment at oil market developments market the session
- The Organization of Petroleum Exporting Countries, and others agreed to extend output cuts
- But the market had been hoping for more
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Stocks in Asia were mostly lower Friday after major oil-producing nations agreed to extend their ouput cuts for nine further months at an OPEC meeting in Vienna on Thursday.
The 1.8 million barrel-per-day cut first inked in November 2016 will now last until November 2018. Crude oil prices fell quite sharply in the aftermath of this announcement however, with many investors clearly having hoped for more aggressive cuts. US crude oil prices relinquished the $50 handle which it had held for much of the week. International benchmark Brent shed about 0.5%.
The Nikkei 225 ended down 0.6%, with Australia’s ASX down by a similar amount. However Chinese stocks managed gains and South Korea’s Kospi remains near all time highs on hopes for the local economy and domestic export demand.
Disappointment at the oil deal weighed on commodity currencies, while the UK pound took a knock from polls suggesting that the ruling Conservative party’s poll lead is narrowing as the early June election day approaches. These factors gave the US Dollar some modest respite.
Gold prices held up after an initial dip. Weakness in local stocks lent them some support.
There’s a distinctly Stateside slant to the rest of the economic day. Another look at US first quarter Gross Domestic Product growth is coming, with the initial 0.7% annualized gain expected to be revised up to a still-not-thrilling 0.9%. Investors will also get a look at durable goods order data for April, the University of Michigan’s consumer confidence snapshot and the Baker Hughes oil rig count.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
