The dollar index has rebounded noticeably from a 4-and-a-half-month low of 98.85, helped by outperforming US consumer confidence for March, and recent Fed comments. This morning, the dollar index rallies and touches a 1-week high of 100.02, . Today, at 13:30 BST, sees the release of US Q4 GDP final reading and Q4 PCE inflation figures for March; with better-than-expected readings it is likely to provide further support to USD. However, per the first and second Q4 GDP annualized readings: a 1.9% growth, showing a slowdown comparing to a 3.5% growth in Q3.
OPEC is considering whether to extend the oil output cut for another 6 months to lift weak oil prices. The decision will likely be made in their scheduled meeting on May 25 in Vienna. In addition, the EIA crude oil inventories (the week ending March 24) dropped to 0.867 million barrels; less than expectations of 1.183 m and the previous figure of 4.954. These two factors cushioned oil prices creating a noticeable bounce off on Wednesday.
Britain’s ambassador to the EU, Tim Barrow, handed over the Brexit triggering notification letter, signed by the UK Prime Minister Theresa May, to the EU Council President, Donald Tusk, in Brussels. Tusk is expected to present draft Brexit guidelines to the European Union’s remaining 27 member states by this Friday. A withdraw agreement must be accepted by 72% out of the 27 states, representing 65% of the population.
Member states are expected to hold a Brexit summit on April 29. The Guardian reports (per a leaked copy of the European Parliament draft resolution) that the EU appears to be taking a strong position aka. “a hard Brexit”. It will likely result in no free trade agreements between the UK and the EU over the next two years, with a transition period of no longer than 3 years. The draft resolution is likely to be discussed next week.
Theresa May now faces a severe challenge: dealing with a prospective hard Brexit negotiation with the EU, at the same time, maintaining the UK territory from falling apart with the threat of Scotland’s independence attempt.
The Eurozone economic sentiment, business climate and consumer confidence (Mar) will be released at 10:00 BST today, followed by German CPI (Mar) at 13:00 BST, accompanied by the US Q4 GDP final readings and US Q4 PCE.
