On 5 June oil producers’ cartel OPEC is set to meet in Vienna for its semi-annual meeting. One of the big themes of the last 12 months has been the collapse in oil prices which accelerated following OPEC’s previous meeting last November. It opted not to reduce quotas and effectively signaled it was prepared to let the market decide the price.
The move was widely interpreted as an attempt by Saudi Arabia, which dominates OPEC, to grab back market share from the new unconventional producers in the US. The fact oil prices have recovered almost 40% from a six-year low in January reduces pressure on OPEC to act this time round.
Strong results from retailers helped the FTSE 100 shrug off underwhelming news on UK economic growth Thursday. At close the index was up 7.59 points at 7040.92.
Monday 1 June manufacturing figures are released in both the UK and US. The UK release is the first of three sets of purchasing managers’ index data with the second on Tuesday 2 June offering insight into the construction sector and the third on Wednesday 3 June covering the services space. All three updates are likely to be closely scrutinised after the second estimate of UK gross domestic product (GDP) growth for the first three months of 2015 was not revised upwards from the initial reading of 0.3%, thus confirming the slowest pace of quarterly growth since the end of 2012. A big factor in this disappointing economic performance has been Britain’s continuing struggle to boost exports. Wednesday 3 June also sees the release of US trade figures. Thursday 4 June sees the latest decision on interest rates from the Bank of England’s Monetary Policy Committee with its members widely expected to vote for rates to remain at their current record low of 0.5%. Friday 5 June is a big day with the influential US non-farm payrolls out and the latest meeting of oil producers’ cartel OPEC taking place as mentioned above.
The FTSE 100 closed down 56.49 points at 6984.43 after a late afternoon plunge amid anxiety Greece is on the brink of default with no bailout deal in sight. With Greece back in recession and the IMF openly speculating it will leave the euro, optimistic statements from its leaders about talks making progress are wearing pretty thin. News that the US economy performed worse than originally thought in early 2015 didn’t help the mood on what has been a choppy final day’s trading in May.
International institutions poured cold water on global stock markets on Friday. A stark warning of a possible abrupt reversal in risky assets from the ECB coupled with the admission that a Greek exit “is a potential” by the IMF weighed on investor confidence. ‘The IMF’s obvious concern over a Grexit explains why it allowed Greece to cluster its due dates into one payment at the end of June to give negotiations a little more time to avoid a default.