The potential for an OPEC+ output cut of around 1 million barrels per day (I’ve seen some chatter of up to 3mn bbls, which seems overblown) was cited as reasoning behind the gap higher for oil upon the week’s opening of futures trade on Sunday evening in the US.

The oil price has pretty much held onto the gap gain, with only a minor retrace:

oil wrap chart 03 October 2022

‘Commodity’ FX gained a tailwind from the oil price move. USD/CAD fell below 1.3750 at one stage. AUD/USD and NZD/USD have both risen.

EUR/USD is up a few points while cable has lost a few points, back under 1.1125 and its straddling there as I update.

USD/JPY and USD/CHF are reasonably steady. We had the ‘summary’ of the Bank of Japan September meeting published today and it makes interesting reading (see bullets above). The Summary of Opinions aired thoughts on rising inflation, and said it’ll continue and perhaps even overshoot topside. The Summary also said that when the time comes the Bank will need to communicate policy changes clearly to markets. The Bank has made such a remark before, but in conjunction with the notes on rising inflation those looking for a BOJ move away from ultra-easy policy have something to point to today. Of course, in my post, I made the point it may well just be the Bank adding its two cents (or yen) worth of efforts trying to stem the decline of the yen.

Regional equities are mixed.

Chinese markets were closed today, and will remain closed all of this week for the Golden Week holidays. This sapped some interest from markets in the timezone today.