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OPEC deal hangs in the balance, metals surge, and the dollar slips as the 'Trump trade' is reassessed. Here are some of the things people in markets are talking about today.
OPEC is finding the devil is in the details as it tries to rescue a deal to cut oil production, which was first agreed to back in September. A barrel of West Texas Intermediate for January delivery was trading at $46.00 at 4:52 a.m. ET, $2 below Friday's open. Khalid Al-Falih, the Saudi oil minister, has raised the possibility of leaving this week's OPEC meeting in Vienna without a deal, as internal divisions and Russian resistance to curbing production hamper negotiations. Hopes for a deal had seen oil companies add $490 billion to their combined market cap this year, following two years of losses totaling more than $1.5 trillion.
Base metals have been on a huge rally this year, with trading overnight in Shanghai adding to the surge as zinc and lead both closed at the upper limit on the futures exchange. While copper has jumped by 23 percent this month, the most in more than a decade, there are warnings that the metal's price may have overrun. There are fears in China that the price rises are being fueled by a speculative bubble as policy makers crack down on other popular investments in the economy.
The dollar is headed for its biggest decline against the yen in two months, with the Japanese currency trading at 112.4 to the dollar at 5:29 a.m. ET, having traded close to 114 during Friday's session. The greenback was also weaker against the euro this morning, as investors reassess the outlook following Donald Trump's election victory. Despite this change, bond traders are not yet convinced that the worst is over for the fixed income market.
Overnight, the MSCI Asia Pacific Index rose 0.8 percent, and Japan's Topix index rose for the 12th day in a row with banks leading gains. In Europe, the Stoxx 600 Index slipped 0.4 percent by 5:24 a.m. ET, with Italian banks leading the losses as a referendum in that country next weekend weighed on investor sentiment. S&P 500 futures were 0.2 percent lower.
Fillon wins French nomination
Former Prime Minister Francois Fillon won the French Republican nomination for next year's presidential election by a wide margin in yesterday's run-off vote. Fillon, a Thatcherite conservative, is now the front-runner to win that vote as the left remains split over their candidate. Also this weekend, U.S. President-elect Donald Trump was on Twitter claiming he would have won the popular vote if "millions" of illegal votes were excluded, without providing evidence for his claim.
What we've been reading
This is what's caught our eye over the weekend.
- World's most reliable stock trade sparks race for 360 percent gains.
- What will Italy's referendum mean for the euro?
- China cites 'The Art of War' as Trump signals trade battle.
- BOJ has first loss in four years on hit from FX and bonds.
- Britain's big banks struggle with toughest stress test yet.
- Big data gurus bring China's economy into focus.
- Why India’s demonetization alone won’t end dirty money in politics.