Stock market
Global markets hit record levels last week amid weaker-than-expected US inflation. This was also facilitated by news of a bilateral agreement between President Biden and Congress, which involves an increase in government spending on US infrastructure.
The plan is valued at $ 1.2 trillion over eight years, with $ 579 billion of that new spending.
Investors are watching the deal closely, as it could significantly boost market demand through investments in renewable energy and the e-vehicle industry.
Oil
At the start of the Asian session on Monday, Brent prices climbed to their highest level since October 2018 and then pulled back slightly due to profit-taking by investors.
Now the main driver is the expectation that the growth in demand in the energy markets will exceed the supply, and OPEC + will have to carefully return more oil to the market from August. It is planned that the level of production will increase by 250,000 or even 500,000 barrels per day. However, this will most likely not be enough for a noticeable decline in prices: we will be able to see a real correction after an additional daily 1 million barrels.
As part of the agreement, OPEC + gives the market 2.1 million barrels per day from May to July. A meeting is scheduled for July 1st, at which a new plan to increase daily volumes is to be adopted.
In the meantime, the August futures for Brent corrected by 0.2%, to $ 76.02, the contract for WTI fell by 12 cents, reaching $ 73.93 in the morning.
Dollar
A weakening US currency and rising investor risk appetite on stock exchanges also supported dollar-denominated commodity prices.
All traders’ attention shifted to the US labor market after last week’s inflation data fell below expectations. Fears remain strong that the Federal Reserve will loosen its monetary stimulus.
The dollar index rose 0.1% to 91.870, recovering from Friday’s low at 91.524. The euro fell 0.1% to $ 1.1923.
Among the important economic indicators to be published this week, Friday’s Nonfarm Payrolls data deserves special attention. The number of jobs outside the agricultural sector is projected to have increased by 675,000 over the past month.
Gold
Gold is gaining ground this morning, with futures contracts up 0.18% to $ 1,781.05.
Investors included in the quotes the same ambiguous signals from the US Federal Reserve on tightening monetary policy after the publication of restrained inflation data.
