Oil producers seem to have postponed their March 20 meeting to mid-April, as leaders from some nations such as Kuwait claim that they’ve never gotten an official invitation while others don’t believe that an actual agreement can be produced yet. So far, Iran has remained stubbornly against capping production, sticking to its earlier pledge of boosting output to 4 million barrels per day.
Meanwhile, the OPEC monthly report indicated a downward revision in global oil demand and an upward revision in its oil surplus forecast, putting additional downward pressure on prices. WTI crude oil retreated below $37/barrel and Brent crude oil is testing $39/barrel.
USDCAD climbed back up to 1.3300, CADJPY is down to 85.25, EURCAD is up to 1.4770, GBPCAD is up to the 1.9000 handle, and AUDCAD is consolidating below parity.
Yen pairs weaker after BOJ statement
As expected, the BOJ kept monetary policy unchanged for the time being, as they previously lowered deposit rates to negative levels in their earlier statement. Data from Japan came in mostly in line with expectations, as the industrial production report didn’t contain any revisions from the initial 3.7% estimate while the tertiary industry activity index showed a stronger than expected 1.5% rebound.
USDJPY is down to 113.35, EURJPY is breaking below 126.00, GBPJPY is down to 161.75, AUDJPY is down to 84.93, and NZDJPY is down to 75.48. Traders are still waiting for the press conference with BOJ Governor Kuroda and additional volatility could be seen then.
Potential consolidation ahead of FOMC
The FOMC is set to announce its interest rate decision tomorrow and dollar pairs could tread carefully ahead of the event. No actual rate changes are expected for now but Fed officials are set to print their revised growth and inflation forecasts, as well as the updated dot plot of rate hike projections, which should give market watchers some clues on whether any shift in bias was made or not.
For today, the US retail sales report and PPI readings are up for release. Headline consumer spending could show a 0.1% drop for February while core retail sales could see a 0.2% decline. Headline PPI could show a 0.2% drop in producer prices while the core figure could indicate a 0.1% uptick. Stronger than expected data could firm dollar demand leading up to the FOMC but other pairs could also be in for consolidation ahead of the monetary policy statements of the BOE and SNB.