Summary:

• Reserve Bank of New Zealand meets this evening, the NZ dollar seems to be in a position to benefit from the event
• DOE weekly release on US oil stocks should be closely watched by investors

Wednesday’s trading has been already dominated by the Asian newsflow and this is likely to continue during the rest of the day. The most important event in today’s calendar is undoubtedly the RBNZ meeting while commodity traders might eagerly look at the weekly DOE release on oil inventories.

3:30 pm BST – DOE oil inventories: Oil prices have had quite a volatile period of time. Firstly, they plunged from under $76 to below $72, and then bounced back meaningfully to around $74.5. Nevertheless, key technical levels have not been breached yet hence one may expect the price to keep moving within the broader range. On the fundamental side we got the news from the EIA that it lowered US crude production for 2019 to 11.7 mbpd from 11.8 mbpd expecting that output this year will reach 10.7 mbpd (fractionally down from 10.79 mbpd). In turn, the API reported that crude stocks slid as much as 6 million barrels exceeding the median estimate suggesting a 3.7 million barrels decrease. At the same time, gasoline inventories moved up 3.1 million barrels the number which aggravated the upbeat tone of the release. The consensus ahead of today’s release points to a 2.2 million barrels fall in terms of crude oil and a 1.8 million barrels slide when it comes to gasoline stocks.

10:00 pm BST – RBNZ meeting: The Reserve Bank of New Zealand has been keeping the level of interest rates unchanged since 10 November 2016 as this streak is likely to be extended this month as well. At its latest meeting at the end of June the RBNZ said that a change in rates might be either up or down. The most dovish line sounded as follows “the best contribution we can make to maximising sustainable employment, and maintaining low and stable inflation, is to ensure the OCR is at an expansionary level for a considerable period”. This reference influenced some NZ-based banks to change their predictions with regard to the first rate hike citing a greater degree of “dovishness”. Today’s meeting will be yet more noteworthy as it will include updated macroeconomic projections followed by the press conference of governor Orr. Given that the NZ dollar has been sold out recently one may assume that the balance of risks seems to be tilted to the upside.

Central bankers’ speeches for today:

• 1:45 pm BST – Fed’s Barkin
• 11:00 pm BST – RBNZ’s Orr