Oil Continues Higher; NAFTA Negotiations Get Heated
Published October 18, 2017
Crude oil prices inched towards their strongest levels in nearly three weeks today. There is speculation that that weekly supply data due later today will show US oil stocks fell for the fourth week in a row. The official weekly oil supplies report will be released at 10:30am EST. Brent crude is up 1.05% on the day trading above $58.40 a barrel and WTI crude is up 0.6% on the day trading above $52.20 a barrel.
The greenback was slightly higher against a basket of other major currencies today as markets awaited updates on the appointment of a new Federal Reserve leader and the progress on US tax reforms. The DXY edged up 0.1% to 93.45 this morning.
President Trump said yesterday that he has narrowed his search for a Federal Reserve head to 5 finalists. The candidates include current Fed Chair Janet Yellen, who is due to meet with Trump tomorrow, Fed Governor Jerome Powell, former Fed Governor Kevin Warsh, Trump’s top economic advisor Gary Cohn, and Stanford University Economist John Taylor. The dollar has been supported in recent sessions by speculation that Trump could pick a more hawkish candidate than Yellen. He is expected to decide before his trip to Asia, which begins November 3rd. Janet Yellen’s current term is due to end in February.
Another round of NAFTA negotiations concluded yesterday in Washington with acrimony over aggressive US demands. Top US and Canadian trade officials accused each other of sabotaging efforts to renegotiate NAFTA, even as they and Mexico agreed to extend talks into Q1 of 2018. Despite the aggressive nature of the US trade officials, Mexican and Canadian officials have stressed that their governments will not walk away from the table. Talks are scheduled to resume in Mexico City on Nov 17-21.
The euro continues softer for the 5th consecutive day, as the market prices in a more drawn out, ECB tapering schedule.
The leaders of Catalonia have so far refused to renounce their independence message from last week which is adding to the downward pressure of the EUR.