Day Ahead: Top 3 Things to Watch
Published Jun 11, 2019 03:57PM ET
Updated Jun 11, 2019 04:56PM ET
Investing.com - There was a time when all that U.S. Treasury Secretaries were permitted to say about the U.S. dollar was that a strong dollar was in best interests of the country. There was a fear that anything else would roil the markets. That looks overly cautious given today the president has pretty much called for a weaker U.S. dollar.
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President Donald Trump tweeted that the euro and “other currencies” are devalued, putting the U.S. at a disadvantage and took another swipe at high U.S. rates and “ridiculous” quantitative tightening.
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The best bet for excitement tomorrow looks to be the oil market. Crude traded flat today, with traders wary about what the EIA will say in its latest inventory report.
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Crude inventories have been stunning the market of late, rising sharply at a time when drawdowns are expected as summer driving boosts gasoline demand. And with U.S. production at record highs the glut has kept prices on the back foot.
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Here are the three things that could rock the markets tomorrow.
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1. More Jawboning on US-China Trade
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U.S. markets are likely to continue to ebb and flow to the tune of ongoing comments on trade from both Washington and Beijing as the G20 meeting edges closer.
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Both nations upped the ante on Tuesday, with China's foreign ministry warning that it would respond firmly if the U.S. insisted on escalating its standoff with China.
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U.S. President Donald Trump, meanwhile, continued to suggest the U.S. has the edge in the ongoing trade war.
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"It’s me right now that’s holding up the deal,” Trump said. “And we’re going to either do a great deal with China or we’re not going to do a deal at all."
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2. Consumer Inflation to Cement July Rate-Cut Expectations?
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Market participants look ahead to the release of consumer inflation data due Wednesday 8:30 AM ET (12:30 GMT) for further signs to support the current narrative that subdued price pressures will force the Federal Reserve to cut rates as soon as July.
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According to Investing.com's Fed Rate Monitor Tool, more than 84% of traders expect the Fed to cut rates next month.
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Economists forecast overall inflation, measured by the consumer price index (CPI), in May slowed to 0.1% from 0.3% the prior month, while the core CPI, which excludes volatile food and energy price, is seen rising to 0.2% from 0.1% a month earlier. That would bring year-over-year CPI growth to 1.9% and core CPI growth up 2.1%.
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3. Crude Inventories on Tap
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The Energy Information Administration (EIA) petroleum report is due Wednesday, with many wary of another unexpected build in crude stockpiles.
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Crude oil futures climbed 1 cent to settle at $53.27 a barrel.
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Ahead of the EIA report, the American Petroleum Institute released data - while not perfectly correlated with the EIA's report - showing that crude stockpiles rose by 4.852 million barrels last week.
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The EIA is expected to report a draw in crude stockpiles of 0.481 million barrels for the week ended June 7.
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U.S. weekly production, which hit a record 12.4 million barrels a day, will likely also attract attention after the EIA cut its forecast on domestic output. The EIA forecasts 2019 U.S. crude production of 12.32 million barrels a day, down 1% from the May forecast, and cut its 2020 outlook by 0.9% to 13.26 million barrels a day.
Written By: Investing.com
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