OPEC+ sources have said that African oil producers are seeking higher caps for 2024, while media reports suggest that Saudi Arabia may extend its additional 1 million bpd voluntary production cut which is due to expire at the end of December.
Brent was down another 0.8% today, and 8.6% for the month so far, which if sustained would be a boon both for the battle against inflation and for consumer spending power.
The Federal Reserve’s favoured measure of inflation – personal consumption expenditures – is due on Thursday and forecast to dip back to 3.1%, in part due to falling gas prices. The core is seen easing to 3.5%, its lowest since mid-2021.
Data on EU inflation is also due Thursday, along with measures for Germany and Spain. Core EU inflation is forecast at 3.9%, the lowest since the middle of last year.
If realised, this will support market wagers of no more rate hikes, and policy easing in 2024. Futures imply around 80 basis points of cuts for both the Fed and the ECB, starting in June.
Fed Chair Jerome Powell will have a chance to push back against the doves at a Fireside Chat on Friday, and there are at least seven other Fed speakers on the docket this week.
European Central Bank President Christine Lagarde has also sounded in no hurry to ease and will have another opportunity to drive home the message at the EU parliament later on Monday.
/cloudfront-us-east-2.images.arcpublishing.com/reuters/OTEPEEABCRPSDGB757EWLI26DA.jpg "Markets turn risk-averse after bumper month 40")
