The oil market continues to trade to the downside with the market falling 15 days in the last 20. The price has slumped from a April 12 high of $56.80/brl to a current level of $48.50/brl as traders fear that OPEC is losing its grip on production quotas, especially from shale producers including the US. Brent crude hit a 5-month low this week, giving back all of the gains seen since OPEC announced its quota cuts in late November 2016.
The Bank of England’s ‘Super Thursday’ will be closely watched with the May’s Quarterly Inflation Report (QIR) expected to be eyed closely. All monetary policy measures are expected to remain unchanged but the QIR may show a short-term downgrade in UK growth, from a prior level of 2.0%, while inflation expectations for 2017 may be nudged slightly higher.
The French Presidential election draws to a close on Sunday with centrist candidate Emmanuel Macron expected to defeat Far-Right candidate Marine Le Pen with ease. The latest polls show Macron with a 62% - 38% lead. A decisive win for Le Pen would underpin an already firm Euro in the short-term but longer-term markets are still undecided if Macron can get sufficient support for his policies. The result is expected late Sunday evening.
--- Written by Nick Cawley, Analyst and Katie Pilbeam, DailyFX
