Summary:

  • PPI inflation print to give investors a hint ahead of tomorrow’s CPI release

  • Oil inventories by DOE expected to increase moderately

  • RBNZ to make its interest rate decision in the late evening

Investors’ attention is still focused on the oil market as they await response from the other participants of the Iranian Deal to the Trump’s withdrawal. Having that in mind oil traders should be cautious in the upcoming days as this commodity market may remain volatile. Today we will be served with a weekly DOE report on oil inventories. Moreover, RBNZ is expected to make its interest rate decision overnight.

1:30 pm BST – US, PPI inflation for April. PPI inflation is not widely observed measure of the price growth dynamics yet it is important as it is released ahead of the CPI reading. The change in the producer’s prices may be used to assess the change in the CPI reading as some of the producer’s price variations tend to be passed on to consumers in form of higher/lower prices. The headline reading is expected to come in at 2.8% YoY and 0.2% MoM. For the core measure market consensus calls for a print of 2.4% YoY and 0.2% MoM. The CPI inflation readings are due to be released on Thursday, May 10 (1:30 pm BST).

3:30 pm BST – US, Crude Oil Inventories. As President Donald Trump withdrew from the Nuclear Deal with Iran new sanctions loom on the significant part of the global oil output. This accompanied by a bigger-than-expected drop in the inventories signalized by API yesterday not only allowed oil prices to pare intraday drop but even finish the day in green. When it comes to today’s DOE reading economists surveyed by Bloomberg point for a 393k increase. Apart from that, the distillate stocks are expected to account 1518k drop and gasoline inventories to add 57.9k. However, one should keep in mind that the geopolitics may be a main factor to steer oil market in the nearby future.

10:00 pm BST – New Zealand, RBNZ Interest Rate Decision. The Reserve Bank of New Zealand does not have much space for hawkishness as the inflation readings deteriorated greatly in the past quarters. The latest print has shown a price growth of 1.1% in YoY terms what is just a notch above the lower bound of the target (1-3%). Markets expect RBNZ to leave the rate unchanged till the end of the year. However, today’s meeting will be followed by the presser (11:00 pm BST) therefore NZD traders may be offered some hints on the future outlook and current situation of the New Zealand economy.

Central bank speakers scheduled for today:

6:15 pm BST – Fed’s Bostic

10:15 pm BST – BoC’s Dinis

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Oil managed to fully pare yesterday’s intraday drop (orange circle) thanks to Trump withdrawing from the Iranian deal. Will today’s DOE reading help Brent storm the resistance level at $77.50? Source: xStation5