Markets started the week with a negative atmosphere as OPEC+ supply cut preparations confirm global recession expectations.
The Dollar Index started the week with 0.1% gains. After the OPEC+ news, the currency of commodity-dominated economies is on the rise against the dollar.
The Australian and New Zealand dollars are up 0.4% against the US dollar. The dollar/yen rate exceeded 145 in the morning, approaching the Japanese government's intervention levels.
Sterling weakens after reports that UK Treasury Secretary Kwasi Kwarteng is on a tour of convincing his tax plan against opposition within the Conservative Party. Pound/dollar is down 0.6% below 1.11.
Asia Pacific stocks are losing ground. Hong Kong Hang Seng, Australia's S&P/ASX lost 200 while Japan's Topix rose slightly. In Asia, the South Korean and Chinese mainland Stock Exchanges will be closed today for a holiday. US stock futures are down.
Spot gold is up 0.1%.
Preparing for major cuts in OPEC+ coalition as it prepares to meet Wednesday to make its oil supply decision, OPEC+ is poised to cut oil production higher than market expectations.
According to delegates, OPEC+ could cut oil production by more than 1 million barrels per day. Oil prices have recently dropped amid rising global recession possibilities, which triggered calls for more production cuts. If the 1 million figure pronounced by the delegates comes true, it will be the biggest production cut since the pandemic.
Brent oil rose above $125 after Russia's invasion of Ukraine, but the expectation that interest rate hike measures against global rising inflation would push the economies into recession had dragged oil prices down. Energy Aspects Analyst Amrita Sen, who stated that OPEC+ is focused on high Fed rate hikes and their effects on demand in emerging markets, commented, “The Group wants to prevent possible oil production surplus”.