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OPEC Cut Oil Production

After many hours of negotiating it was agreed that a cut in production was needed, first time in 8 years, production limit of 32.5mn to 33mn barrels is set. Bent crude jumped from $45.70 to $48.76 on the news. There are still some finer details to be agreed and a sub committee has been appointed to address these, primarily market share.

FED & Bank Of Japan both keep rates on hold

With FED unchanged and increased likelihood of hike in December the knee jerk reaction was USD across the board lower albeit benign and we remained in pretty much the same trading ranges. Bank of Japan also kept rates on hold but it said it would make yield-curve control a centrepiece of its new policy framework and buy 10-year Japan government bonds (JGBS) so that the yield would hover around 0% while keeping a lid on short term rates.

Last week positive for USD

Overall last week was positive for the USD albeit unconvincing figures. Retail sales were 0.3% in August with weak purchases of Autos and other products suggesting weaker domestic demand. Also the cost of living in the US rose by 0.2% indicating that inflation continues to move to the FED'S goal, but very slowly.