USD: OPEC+ forces a rate cut rethink
Over the weekend, OPEC+ surprised with the announcement of a more than a one million barrel-a-day output cut, only a few days after delegates had signalled no intentions to change production limits ahead of the cartel’s monitoring committee this week. Saudi Arabia alone pledged to cut 500,000 bbl/day, and Russia will extend the output cuts until year-end. Oil futures initially rose by as much as 8% and are now trading around 4% higher (Brent around $83.8/bbl this morning). Our commodities team has revised our 2023 average Brent price forecasts for $93/bbl.
All of this has fuelled fears that inflation will prove to be a longer-lasting problem for central banks. And while many central banks (like the ECB) have managed to reliably convey a hawkish message despite recent market turmoil, the ultra-volatile market pricing for the Fed’s rate path…
