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Market Update – September 6 – Saudis, Russia extend voluntary production cuts


US stocks fell on Tuesday – with the exception of the US100 – weighed down by higher oil prices and rising Treasury yields. Saudi Arabia will extend its 1 million barrel per day voluntary oil production cut until the end of the year, according to the state-owned Saudi Press Agency, and the cut adds to the 1.66 million barrels per day that other OPEC members have put in place until the end of 2024. Russia, through its Deputy Prime Minister Novak, also pledged to extend its 300k bpd cuts until the end of December, and will review the measure on a monthly basis. UKOil traded above $90 till a few minutes ago (now $89.84) and USOil went as high as $88 at some point yesterday. This was immediately reflected firstly in US yields, which rose 6bps on the 10-year, and the USD also benefited. The phantom of inflation may not yet be vanquished with the main raw material of our energy-intensive societies rising by 30% in just over two months. Stocks have fallen: airline and cruise stocks obviously suffered but all sectors except Energy, Technology and Consumer discretionary went down. European indices also dropped as economic data for the region came in mixed. Eurozone producer prices fell 7.6% in July from a year ago. But business activity in August dropped at the steepest rate in nearly three years. Overnight the Australian GDP figure showed a slowdown compared to the previous quarter, but was less marked than expected.

Sectorial Etf Performances
  • FX – USDIndex hit its highest level since 10 March, now at 104.64. USDJPY at 2023 highs, 147.08 now but traded as high as 147.815. USDCNH slides to 7.31 but previously touched 7.325. EURUSD -0.61% at 1.0737 now close to critical levels, GBPUSD at 1.2581 with its price clearly below a trendline.
  • Stocks – Flattish Chinese indices, JPN225 +0.77% at 33227, AUS200 -0.75%. US Futures all aligned at -0.07% right now, EU Futures -0.2%/-0.3%. Yesterday Materials -1.85%, Industrials -1.68%, Utilities -1.22%.
  • Commodities – USOil touched $88.05, trading at $86.50 right now; UKOil rose as high as $91.12 now at $89.83.
  • Gold – pressured again, -0.56% yesterday now flat at $1926. XAG dropped -1.67%, further down -0.33% at $23.45 now.

LATER TODAY: Germany Factory Orders, EU Retail Sales, US Trade Balance, PMIs, Bank of Canada Interest Rate decision, Fed Beige Book.

INTERESTING MOVER: USOil added another +0.84% ($86.7) to its more than 2 month long 30% rally. Resistances at $88.5/$89 and $92.5/$93 areas, support in the $83.5/$84 area. MACD, RSI positive, Price above 50d-200d MAs that recently crossed to the upside.


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Marco Turatti

Market Analyst

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