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September 6th - According to Reuters, two sources familiar with the discussions revealed that OPEC+ will maintain its October oil production policy at its meeting on Sunday, as the oil-producing organization needs to agree on new quotas before deciding on its next production move. OPEC+ currently has a layer of production cuts in place, covering most of its 21 member countries, until the end of 2026. Before deciding how to gradually exit the production cuts and return production to the market, the organization needs to review member countries oil production capacity to set a production baseline for 2027 – which will serve as the basis for quotas. Sources previously indicated that this discussion might take place later in 2026, suggesting that OPEC+ might pause production increases in the fourth quarter.On September 6, local time, the Lebanese Ministry of Public Healths Emergency Operations Center issued a statement saying that an attack launched by the Israeli Defense Forces in southern Lebanon that morning had resulted in 4 deaths and 20 injuries. The Israeli Defense Forces (IDF) issued a statement on the 6th announcing the airstrikes on southern Lebanon. The IDF statement said the airstrikes were a response to Hezbollahs actions in Lebanon.On September 6, local time, Belgorod Oblasts acting governor, Shuvaev, reported that in the past 24 hours, Ukrainian forces launched 102 offensives against the oblast, and Russian forces intercepted 107 drones. The attacks resulted in the deaths of three civilians and injuries to four others.Lebanons Ministry of Health: Israeli airstrikes on southern Lebanon on Sunday killed four people, including two women, and injured 20 others.September 6th - Japans opposition Democratic Party for the People held its leadership election on the 6th, with incumbent leader Yuichiro Tamaki defeating his rival, House of Representatives member Mikihiko Hashimoto, to be re-elected. His term will run until the end of September 2029. After his election, Tamaki stated that he will listen to opinions from all sides, strengthen ties between the party headquarters and local councilors and supporters, and begin preparations for the unified local elections next spring.

As US Inflation Data Looms, the USD/CAD Tracks Oil's Failure To Move Above 1.3300

Alina Haynes

Feb 14, 2023 14:44

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The USD/CAD shows the market's caution as traders anticipate Tuesday morning's release of the US Consumer Price Index (CPI) for January. After a two-day decline, the Canadian dollar-U.S. dollar pair holds a position near 1.3330.

 

However, the most recent decrease may be a result of the US Dollar's inability to maintain its earlier weekly gains in the face of falling US Treasury bond yields. Nonetheless, the declining price of Oil, Canada's principal export, and the Federal Reserve's (Fed) hawkish pronouncements are enticing USD/CAD bulls.

 

Concerns about additional releases from U.S. strategic petroleum reserves have kept the price of WTI crude oil below $79,50 a barrel (SPR). According to Organization of the Petroleum Exporting Countries (OPEC) Secretary-General Haitham Al Ghais, the price of black gold disregards earlier reports anticipating a supply constraint as a result of Russia's threat to reduce output and the anticipation of increasing energy demand.

 

Fed Governor Michelle Bowman reportedly told Reuters that the Federal Reserve will continue to raise interest rates until they reach a suitable level to return inflation to the target rate. President of the Federal Reserve Bank of Philadelphia, Patrick Harker, dismissed speculations of a 2023 Fed rate cut. Nonetheless, the official stated, "The Fed is unlikely to decrease interest rates this year, but could do so in 2024 if inflation begins to decline."

 

Notably, it appears that the recent decrease in US inflation expectations from a multi-day high has weighed on US Treasury bond yields and the US Dollar. The Federal Reserve Bank of St. Louis (FRED) 10-year and 5-year breakeven inflation rates decrease from monthly highs to 2.31 percent and 2.44 percent, respectively.

 

As Wall Street closes in the green, S&P 500 Futures follow the sentiment with slight gains, which weigh on the US Dollar. As a result, 10-year US Treasury note yields decline by around two basis points to 3.69 percent at the latest.

 

Since recent Federal Reserve (Fed) pronouncements indicating potential rate hikes appear muted, USD/CAD traders should keep a close eye on the US CPI data in the near future. In addition, discussions regarding the Fed's policy shift are approaching, so any negative US inflation data will not hesitate to send the Loonie pair down. Likewise, monitoring the price of oil is vital.

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