Markets are waiting for what will come out from the Vienna oil producers' meeting. The cut-off agreement is expected to be extended until the end of 2018. It may be noted that the agreement could be terminated prematurely if market overheats.
OPEC countries will meet first and will be followed by the accession of non-OPEC countries, led by Russia, to sit down and discuss on the possibility of extending the agreement beyond March 2018. Many oil ministers, led by Saudi Arabia, support extending the period until the end of 2018.
Oil prices rebounded at the start of today, trading around $58 a barrel. Prices are not expected to be strongly affected if the results of the meeting are as the markets expect and prices will continue to maintain positive movements to target levels of $62 per barrel.
Today's market eyes will also be on the US Core Personal Consumption Expenditures, the preferred gauge of inflation for the Fed, which is expected to rise by 1.4% on yearly basis in October and by 0.2% on a monthly basis.
A number of Fed members have expressed concern over tightening monetary policy in light of the continued weakness of inflation figures, as expounded by Janet Yellen during yesterday's testimony before Congress. And with the recording of any disappointing reading today, it may put further downward pressure on the US dollar, which is already on its way to its worst monthly decline since last July.
What could be positive is that the Senate yesterday took a step to pass the much-anticipated tax legislation, and may be voted on on Thursday or Friday, although it is unclear whether the law has sufficient support from Republicans.
The Dollar Index is currently trading at 93.34 levels and we may see a new head and shoulders pattern on the daily frame, which may eliminate the inverted head and shoulders pattern if the 92.56 level is broken.
