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Saudi and Iran Dash Market Hopes

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On Tuesday, Saudi Arabia and Iran played down hopes for a deal to reduce or freeze their oil production at the closely watched informal OPEC meeting. Iran refused an offer from Saudi Arabia to decrease its oil output in exchange for Riyadh cutting supply. Saudi Arabia had offered to reduce its output if Iran accepts to limit production, a shift in Riyadh's position as the kingdom had previously rejected to discuss output cuts.

Such a deal has also been complicated by a severe political competition between Iran and Saudi Arabia, which are battling several proxy-wars in the region, including in Yemen and Syria.  Oil fell as much as 3% yesterday, negatively affected by the meeting. U.S. crude oil declined to $44 before settling at $44.50. Technically, crude could trade with sharp fluctuations during the course of the day.

Gold fell yesterday, as traders viewed Democrat Hillary Clinton as the candidate of the current situation, while others are not sure what a Trump presidency could mean for U.S. foreign policy, trade or the domestic economy.

The precious metal failed to manage its gains yesterday and settled below $1,330. Technically, the yellow metal could decline to $1,315.

The U.S. dollar index settled at 95.30 as the U.S. consumer confidence unexpectedly rose in September to 104.

GBP declined to $1.30 yesterday, but is it unlikely to settle at such level due to volatility in global markets.

The most important economic events:

  • USD Durable Goods Orders (AUG P): (GMT 14:30) – Important – Forecast (-1.5%) – Previous (4.4%).
  • USD Fed's Chair Yellen Testifies Before House Panel: (GMT 16:00) - Important
  • USD Fed's Evans Speaks on Community Banking in St. Louis: (GMT 19:30) - Medium
  • USD Fed's Mester Speaks on Economic Outlook and Policy: (GMT 22:35) - Medium

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