Asian markets tumble with oil prices after the highly anticipated meeting between oil producers in Doha failed to yield agreement on output freeze. WTI dips to as low as 37.61 and is now trading at around 38.5, comparing to Friday's close of 40.36. Nikkei is losing -470 pts or -2.8% while Hong Kong HSI is trading down -200 pts or -0.9%. In the currency markets, commodity currencies open generally lower with Canadian dollar losing most. Meanwhile, Yen surges on risk aversion together with Swiss franc while euro follows.
There were hope that the meeting in Doha between OPEC and non-OPEC oil producers would yield agreement on freezing output as January level. Iran skipped out as oil minister Bijan Zanganeh said that "if Iran freezes its oil production... it cannot benefit from the lifting of sanctions." Saudi Arabia also refused to go along with the plan for geopolitical tension with Iran. Meanwhile, oil minister of Qatar, Mohammed bin Saleh al-Sada said that the group of nations "needs more time" to reach an agreement but there is no schedule for the next negotiation.
In UK, Chancellor of the Exchequer George Osborne warned that "for Britain's economy and for families, leaving the EU would be the most extraordinary self-inflicted wound." UK would be "permanently poorer" after Brexit and a Treasury study said that the economy would shrink by -6% by 2030 and that would be "GBP 4300 a year for every household". And he emphasized that "it is a well-established doctrine of economic thought that greater openness and interconnectedness boosts the productive potential of our economy. That’s because being an open economy increases competition between our companies, making them more efficient in the face of consumer choice, and creates incentives for business to innovate and to adopt new technologies."
Elsewhere, New Zealand CPI rose slightly more than expected by 0.2% qoq in Q1. UK Rightmove house price rose 1.3% mom in April. The economic calendar is light today with only Canada foreign securities transactions and US NAHB housing market index featured. Looking ahead, ECB meeting will be the main focus of the week. There are some other important economic data but the might not trigger much reactions to the markets. Here are some highlights:
- Tuesday: RBA minutes; German ZEW, US housing starts and building permits
- Wednesday: Japan trade balance; Germany PPI; UK employment; Swiss ZEW; Canada wholesale sales; US existing home sales
- Thursday: Swiss trade balance; UK retail sales; ECB rate decision; UK Philly Fed survey, jobless claims
- Friday: Japan PMI manufacturing; Eurozone PMI manufacturing; Canada retail sales, CPI