PVM Midday Report 13 June 2016
Headlines
OPEC hints at tighter oil balance in 2H 2016; output down 100,000 bpd in May
Chinese implied oil demand falls by 380,000 bpd in May y/y to 10.24 mbpd
Iran’s biggest oil…
The tragicomedy that is the Greek debt crisis took an unexpected turn yesterday after the IMF announced that its negotiating team would leave the Brussels talks in what was the clearest sign yet that significant differences remain with Athens. The decision took many by surprise and global equity markets, which until then had been enjoying a brief relief rally, only managed to eke out marginal gains by the close as investors absorbed the fresh blow to any hopes of a breakthrough. The prospect of a deal being reached before the expiry of Greece’s existing bailout now lie solely with Alex Tsipras according to its creditors who increased pressure on the Greek PM to take the necessary decisions to avoid a potentially messy default.
Away from Greece’s financial woes and news that US retail sales recovered in May from a subdued performance in April reinforced expectations that the world’s largest economy was gaining momentum. The 1.2% rise in sales was the biggest monthly increase in over a year and was accompanied by an upward revision to equivalent figures for the two preceding months. As an important measure of consumer spending and gauge of the economy’s overall health, the solid retail sales data pointed to a rebound in US 2Q GDP which in turn bolstered bets of an autumn rate hike. The dollar index responded as predicted and gained 0.3% with additional support coming from a healthy 0.4% rise in US business inventories which was also seen as indicative of the improving US economic outlook.
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