Financial markets kicked off the week in subdued fashion as investors braced for a series of key economic releases including the highly anticipated NFP report. There was little action in the FX space with the dollar edging higher as markets searched for the next driver. Despite the slow start, the S&P 500 and Nasdaq hit record highs on Monday.

Our trade of the week was oil ahead of the highly anticipated OPEC+ meeting. Oil bulls have been on a tear this year thanks to the encouraging global demand outlook. We questioned whether the commodity may be instore for another bullish OPEC+ surprise. Markets were expecting the cartel to raise production by another 500,000 barrels per day (bpd) in August.

Mid-week, our attention turned towards the dollar which broke out of its recent range. After the Fed’s hawkish surprise over two weeks ago, king dollar has regained its mojo. Looking at the technical picture, the DXY is firmly bullish on the daily charts despite the decline witnessed on Friday. A pull back towards the 92.00 could be on the cards before prices push back above 92.50.

All eyes were on OPEC and its allies on Thursday as they discussed their oil production plans for the next few months. Delegates reported that Saudi Arabia and Russia had reached a tentative agreement with a proposal of adding 2 million barrels per day to the markets until the end of 2021 on the table. However, OPEC+ failed to reach an agreement after the United Arab Emirates raised objections during the meeting. The cartel also ended Friday’s meeting without a deal and will resume oil policy talks on Monday.

In other news, the US economy created 850,000 jobs in June, beating the 720,000 expectations and higher than the 583,000 revised number for May. In regards to the unemployment rate, it rose to 5.9% compared to the 5.7% forecast while average hourly earnings printed +0.3%, lower than the downwardly revised +0.4% seen in May. The S&P500 rallied on Friday following the NFP report, closing a record high for the seventh straight day.

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