Week Ahead: Crude Oil, Brexit, And Black Friday

Last week, the uncertainty about Brexit was the biggest news. This is after the cabinet endorsed the new draft. The decision led to the prompt resignations of key ministers, including Dominic Raab, the Brexit minister who had an important role in the negotiations. This week, the following may be the biggest movers.

Brexit

This week, traders will likely know whether parliament will accept the new Brexit deal. As things stand, investors are less hopeful about a deal happening between the UK and the EU. The likelihood is that parliament will not accept the draft deal, which will expose the country to higher chances of a No-Brexit deal. This is because the Labor party has already said that it won’t support the draft deal. Similarly, many MPs have said that they won’t support a deal.

Crude Oil

Crude oil will be another important topic this week. Over the weekend, it was reported that Saudi Arabia will ask OPEC to reduce supplies. The country has already pledged to lower production by more than 500K barrels per month starting from December. Saudi, the de facto leader of OPEC is concerned that increased production may lead to an oversupply in 2019, which will bring prices down. Last week, OPEC released a report that predicted that an oversupply is a possibility. In addition, traders may pay close attention to the Khashoggi murder case. Last week, the CIA confirmed that Saudi’s crown prince had ordered the killing. They will watch out for the response from Washington. They will watch out for the inventory data from EIA and API.

Minutes

Tomorrow, the Reserve Bank of Australia (RBA) will release the minutes for the previous meeting. These minutes may be important in helping traders determine the thinking of the central bank. In the meeting, the monetary policy statement said that the bank left interest rates unchanged. In recent days, the Australian dollar has continued to strengthen against the USD as traders expect the bank to start rising.

After the RBA, the ECB too will release its minutes for the past meeting. In the past few days, the euro has been under pressure as the region’s economy continues to face multiple challenges. Two weeks ago, the European Commission released a report that lowered the economic forecast for the next three years. In addition, the region continues to face the challenge of increasing populism. In the past French election, the populist Marin Le Pen had 34% of the vote. In Italy, the country is being led by far-right parties and in Germany, right-wing candidates are rising.

Economic Data

Other major economic data expected to be released this week will be UK inflation hearings, US housing numbers, US durable goods orders, Japan CPI, Germany GDP numbers, EU PMI, and Canada’s CPI.

In addition, this will be one of the busiest week in retail. On Friday, it will be Black Friday where American indulge in all types of shopping. It will be followed by Cyber Monday. Traders will pay close attention to the numbers that will come from major retailers.