Wall Street overturned bearish sentiment to finish mostly higher after four sources stated that OPEC would implement a supply ceiling in an effort to stem the oversupply of crude in the market. The DJIA gained 1.78%, the S&P 500 gained 0.11% and the NASDAQ closed slightly negative at -0.08%.

Asian Equities followed Wall Street’s lead in early trade but bowed to a more cautious tone as the outcome of the ECB and OPEC meetings are expected today and the NFP looms in the background to top the week off. The Nikkei shed 2.3% as the JPY strengthened on the back of a hawkish BOJ. The ASX 200 lost 1% following the commodities complex lower. China traded mixed with the Shanghai Composite losing 0.2% while the Hang Seng gained 0.2 %.

In FX the JPY strengthened causing the USDJPY to drop below 109.00 after the BOJ downplayed the importance of inflation targeting with the use of monetary policy. The EUR was bid yesterday as markets await today's ECB meeting outcomes which markets are expecting to have a slightly hawkish tone on the back of encouraging EU data of late. The GBP continues to be the victim of speculation regarding the BEXIT vote, with various contradicting poll releases causing wild swing in the currency. The USD has begun to look heavy after post Yellen gains as markets begin to realise that a June rate hike would not be prudent given the current global risks which may affect the US the months to come.

In the commodities complex, Gold continues to trade above 1200 as bearish attempts to break below have been fended off by resilient bulls who will look to drive prices higher given the more than 100 USD loss they suffered and the return of risk off sentiment in the markets. Crude oil has come off its best levels as todays largest risk event looms in the form of US Crude Oil inventories and the outcome of the much awaited OPEC meeting in which members are said to be discussing ways to stem the oversupply of crude in the market.

The OPEC meeting outcome will be a source of great volatility, with a cap on supply to cause crude prices soaring as risk on sentiment returns leading to a boosting of commodity currencies and equities while safe haven currencies tumble. On the other hand, should an agreement not be reached we would expect an aggressive global market move as crude oil tumbles as the current pricing in of a supply cut unfolds and markets re-adjust.

Volatility is expected throughout the day as rumours and releases regarding the meeting cause market participant to trade one way or the other.

Major news events due today are as follows:

UK

  • Construction PMI expected at 51.9
  • BOE Carney Speaks

EU

  • Minimum Bid Rate expected at 0.00%
  • ECB Press Conference

USA

  • ADP Non-Farm Employment Change expected at 177K
  • Unemployment Claims expected at 270k
  • FOMC Member Powell Speaks

CAD

  • Gov Council Member Schembri Speaks

CHINA

  • Gov Council Member Schembri Speaks