Weekly crude inventory data from the US takes on added significance on Wednesday after oil prices sank to their lowest since the end of November on a steady build-up of stocks and rising global production. US inventories have increased for 9 of the last 10 weeks as US shale producers have pumped more just as imports rise, helping to send prices of crude to their weakest since OPEC agreed to curb production at the end of last year. Hedge funds that had accumulated vast net long positions have begun to unwind them.

Further pressure on prices emerged as OPEC said supply from outside the cartel would rise by around 400,000 barrels a day in 2017. At an average of 57.7m b/d this was 300,000 b/d more than previously estimated a month ago.

At the same time, OPEC lynchpin Saudi Arabia – which had pushed hardest for a cut in output – admitted it raised production in February. Output in the kingdom climbed 263,300 b/d to a little over 10 million b/d, although it is still cutting production faster than it needs to.

The next OPEC meeting in late May is now a test of mettle – will the Saudis manage to keep members on side to maintain or even accelerate output cuts, or will cash-strapped producers open the taps more to offset the drop in prices?



On the data front, traders will be watching the monthly batch of flash PMIs from the Eurozone, Japan and the US on Friday.

Signs of recovery in the Eurozone have allowed the European Central Bank to recently declare victory in the war against deflation. However, growth is fragile and the uplift in core inflation remains muted.

The next stage is to create a self-sustaining improvement in growth and core inflation that does not rely on the ECB’s ultra-loose monetary policy for sustenance. PMI figures for manufacturing and services activity in March will offer a clear indication of what the Q1 GDP growth rate is looking like.

Article 50


Markets remain primed for any move by the UK government to trigger Article 50. Theresa May has the backing of Parliament and plans to pull the trigger by the end of March. Sterling has suffered as markets start to price further risks to the pound from exiting the EU. GBPUSD sank to 8-week lows last week as MPs backed the Article 50 bill, before firming up a little following the Federal Reserve’s slightly dovish rate hike.



In the UK, Bellway, Kingfisher and Savills will provide an interesting snapshot of the broader property sector. In Germany, BMW reports, while FedEX and NIKE are among the largest US listed companies to report. Below we pick out of a couple of highlights from the UK earnings calendar this week:

Fevertree Drinks

Gin and tonic anyone? The craze for craft gin has led to the spirit’s inclusion in the UK’s CPI inflation basket of goods again. It’s also helped makers of high-end mixers sparkle. Shares in Fevertree Drinks are worth nearly ten times what they were just over two years ago when the firm went public. Preliminary results on Tuesday are expected to show another strong year for the firm.


Next results are due on Thursday after what has been a troubled few months. Sales in November and up to Christmas were down 0.4%. For the year to December 24th sales are down 1.1%. Fourth quarter sales were better than the third, but it had been expecting to do better on a year-on-year basis as the 2015 figures were so poor. As such the company now says that the cyclical slow-down in spending on clothing and footwear will continue into next year. Inflation is also a concern as it will hit consumer spending going forward. Shares in the company are worth half what they were at their peak in late October 2015.



Economic Calendar

(All times GMT)

Monday, 20 March

All day – Japan bank holiday

00:01 – UK Rightmove house price index

07:00 – German PPI inflation

12:30 – Canada wholesale sales

Tuesday, 21 March

00:30 – Reserve Bank of Australia monetary policy meeting minutes

00:30 – Australia house price index

09:30 – UK CPI inflation

12:30 – Canada core retail sales

12:30 – US current account

20:00 – Canada annual budget release

Wednesday, 22 March

04:30 – Japan all industries activity

14:00 – US existing home sales

14:30 – US crude oil inventories

Thursday, 23 March

Tentative – ECB long term financing operation

07:00 – GfK German consumer climate

09:30 – UK retail sales

12:30 – US weekly unemployment claims

14:00 – US new home sales

21:45 – New Zealand trade balance

Friday, 24 March

00:30 – Japan flash manufacturing PMI

08:00 – French flash manufacturing & services PMI

08:30 – German flash manufacturing & services PMI

09:00 – Eurozone flash manufacturing & services PMI

12:30 – Canada CPI inflation

12:30 – US core durable goods orders

13:45 – US flash manufacturing & services PMIs

Corporate Calendar


Tuesday, 21 March

FedEx Corp (FDX) – Q3/2017, EPS estimate 2.633

General Mills (GIS) – Q3/2017, EPS estimate 0.706

NIKE Inc (NKE) – Q3/2017, EPS estimate 0.528

Fevertree Drinks (FEVR) – Y/2016, EPS estimate 0.240

Bellway (BWY) – S1/2017

BMW (BMW) – Y/2016, EPS estimate 10.310

Wednesday, 22 March

Kingfisher (KGF) – Y/2017, EPS estimate 0.235

Savills (SVS) – Y/2016, EPS estimate 0.639

Thursday, 23 March

Next (NXT) – Y/2017, EPS estimate 4.319

Ted Baker (TED) – Y/2017, EPS estimate 1.123

Source: Bloomberg


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