Saudi Arabia reminds OPEC is a "team game"

TVC:USOIL   Contratos por diferencias (CFDs) sobre petróleo WTI
The second week of August features by a rather sluggish start as the economic calendar is relatively boring and most of the sensitive data have already found their way to the market.
So the first marked miss in the eurozone's macroeconomic statistics happened in the German manufacturing sector - output fell by 1.1% in June after rising for five consecutive months. The median forecast was at 0.2%. Together with the pace of construction which slowed down by 1% in the same month, this indicates a slowdown in economic activity in the leading economy of the eurozone. Data is likely to be a signal for caution for euro buyers before the release of the report on GDP in Germany in mid-August. The common currency however does not simply give up, gripping an edge against the dollar.

A strong payrolls report was a rather unexpected start for US statistics in August, as it ran counter to other indicators that indirectly indicated the weakness of the labor market. The number of jobs increased by 208K, wages by 0.3% tallying with the forecast, and unemployment fell to 4.3%, reviving hopes for a third Fed rate increase this year. Futures on the rate estimate the probability of a December increase in 47.0% compared to 42.8% last week. The dollar won back losses against most of the majors, but the lagging buoyancy for the European economy provides strong poise for EURUSD , which, however, only increases the probability of continuing Friday's correction to the level of 1.17.

The British pound showed indifference to the sensitive data on household spending in the UK. The Markit report published on Monday showed that consumption, a key component of GDP, declined for the third consecutive month, showing the worst dynamics since 2013. The positive background for the pound, taking into account economic data and details by Brexit, is becoming more and more precarious, so with the growth of the dollar, the GBPUSD pair may adjust to the level of 1.29 this week.

The dynamics of oil prices is becoming increasingly ambiguous as the fundamental background is equally filled with both positive and negative components. On the one hand, there are falling inventories in the United States, Saudi Arabia's export cuts in August, CFTC data, indicating a net gain in long positions. On the other hand, there are problems with the commitment to OPEC quotas, output growth in Libya and Nigeria, the uncertainty of the policy of shale companies in the United States. Contango market with prices above $ 50 is definitely a favorable environment for expanding the production of American firms, so this negative factor will definitely manifest itself. Today, prices fell by 1% under pressure of uncertainty before the OPEC meeting, but the results of the meeting will probably bring prices for a little more than $50 as taking into account the efforts of Saudi Arabia, the positive outcome of the meeting is very likely.
Comentario: The target has been hit, though the move took shorter time
Comentario: EURUSD, GBPUSD targets are also on their way

This analysis is provided as general market commentary and does not constitute investment advice.