Market News 23-1

(Bloomberg) — OPEC’s two biggest suppliers to the U.S. shrugged off a vow by President Donald Trump to end dependence on the group’s oil, saying the world’s biggest economy would continue to need crude from abroad. Trump aides said to prepare list of early energy changes. U.S. oil explorers boost drilling rigs by most since 2013. Russia says oil market is rebalancing, inventories falling. Russia data show 108k b/d supply drop before monitors’ meeting.
(Bloomberg) — OPEC and other oil producers agreed on a way to monitor their compliance with last month’s historic supply deal, putting global markets on track to re-balance after more than two years of oversupply. The countries have already cut oil supply by 1.5 million barrels a day, more than 80 percent of their collective target, since the deal took effect on Jan. 1, Saudi Arabia’s Minister of Energy and Industry Khalid Al-Falih told reporters in Vienna. “Compliance is great — it’s been really fantastic,” Al-Falih said Sunday. “Based on everything I know, I think it’s been one of the best agreements we’ve had for a long time.”
(Bloomberg) — Emerging-market stocks and currencies headed for the highest levels in 11 weeks as U.S. President Donald Trump’s first days in office produced no policy announcements to buoy the dollar. The dollar “rose a long way very quickly on little more than hopes and dreams,” said Mark Cudmore, a Bloomberg strategist based in Singapore. “If those hopes are not at least partially fulfilled quickly, the dollar may correct sharply.” Asian currencies are likely to maintain a pattern of weakening in the first 100 days after the new U.S. president takes office, according to HSBC.
(Bloomberg) — The Bloomberg Dollar Spot Index drops a third day as investors respond to Trump’s inauguration speech with fresh dollar selling. Risk trades on the back foot while stock futures point to U.S. markets following the bearish tone from Europe. Yen leads gains versus the greenback as its haven status holds firm and risk/reward on dollar longs isn’t that attractive at current levels for some investors, two traders in London say. Volumes were remarkably larger than average during the Asia session, eased as London walked in
(Bloomberg) — With the arrival of China-bashing Donald Trump as president in the White House, analysts are drawing up shortlists of winners and losers from any eruption of tensions between the world’s top two economies. What is clear: China will retaliate against any protectionist steps — not only are there reported contingency plans, but the historical example of measures against Japan when tensions flared in 2012. Overall, U.S. equities have more to lose than their Chinese counterparts in a trade war, at least in the view of Morgan Stanley’s Garner.
(Bloomberg) If you want to know whether the Trump trade has legs, keep an eye on dollaryen. That’s because the exchange rate is trading near a key battleground spot for bulls and bears of 115 yen, according to Boris Schlossberg, managing director of foreign-exchange strategy at BK Asset Management in New York. Brown Brothers Harriman & Co. strategist Marc Chandler said the past week’s push higher in Treasury yields is starting to support the dollar again. Its short-term direction will likely determine whether the greenback extends the 8 percent rally against the Japanese currency since Donald Trump’s election victory in November. “A decisive move above the 115.00 figure would signal that the Trump trade is back on and markets are once again betting on substantial U.S. growth,” Schlossberg wrote in a note. Hedge funds and other money managers cut net bullish bets on the dollar in the week before Trump’s Friday inauguration, according to data from the Commodity Futures Trading Commission.
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