The US dollar is better bid today but remains largely in the ranges seen in recent days. There a few developments to note, which together are lifting European equities after Asian equities softened.
First, the API oil inventory estimate showed an unexpected fall of 4.3 mln barrels. An increase of half the magnitude was expected. The DOE estimate, which is considered more reliable, will be one of the North American highlights today.
Second, and also supporting the oil complex today was the "good cop bad cop" routine by Kuwait. Earlier Saudi Arabia had confirmed that the freeze in output required Iranian participation, which is widely understood as unrealistic until it boosts output toward pre-sanction levels. Oil priced nose-dived, and today Kuwait plays down Iranian participation. Prices supported, and the energy sector is helping European equities move higher.
The other set of developments which have also been supportive are the economic reports from China and Germany. China's Caixin PMI for services edged higher to 52.2 from 52.1. This, coupled with the previously released manufacturing survey, lifted the composite to 51.3, its highest level in a year. And as if to drive home the message, Fitch again opined that a hard landing in the world's second-largest economy was unlikely....MORE