USD/MXN returned to prior levels as both the US and Mexican governments agreed on a deal that will avoid tariffs. However, USD gains seem to remain in check, as on Friday a weak US employment report was released. We expect that the weak employment data for May, released on Friday will increase pressure on the Fed to proceed with a rate cut as a loss of economic momentum seems to be threatening the US economy. We expect the Dollar to book some gains as it recovers from Friday’s drop yet the prospect of a Fed rate cut may keep any gains under control.

WTI prices rise as OPEC cuts are expected‍

WTI prices are on the rise, as the market seems to expect the OPEC+ group to maintain its production cuts. On Friday, Saudi officials had stated that the group was close to agree extended supply cuts. The rise seems to have been moderated somewhat as the US lifted the possibility of tariffs on Mexico, hence removing some uncertainty. Analysts seems to question the sustainability of the price increase and link it to the economic performance of a number of industrial economies.

Other economic highlights, today and early tomorrow

Today during the European session, we get UK’s GDP growth rates for April and in the American session we get Canada’s number of House starts for May.

As for the rest of the week:

On Tuesday, we get from the UK the employment data for April and the US PPI rate for May. On Wednesday, we get the US inflation rates for May. On Thursday, we get from Australia May’s employment data and Eurozone’s industrial production for April. On Friday, we get China’s industrial production for May, the US retail sales for May, the US industrial production for May and the US preliminary Michigan consumer Sentiment for June.

 USD/MXN H1

WTI H4

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