Australian markets slip ahead of closely watched OPEC meeting
Stocks in Australia slipped during Thursday morning trade ahead of a closely watched meeting by the Organization of the Petroleum Exporting Countries (OPEC).
The ASX 200 slipped 0.2 percent in early trade, with the sectors in mixed territory. The energy subindex was largely flat ahead of Thursday’s OPEC meeting
Meanwhile, futures pointed to a lower open for Japan’s Nikkei 225. The Nikkei futures contract in Chicago was at 21,795 while its counterpart in Osaka was at 21,900. The benchmark Japanese index last closed at 21,900.
The mainland Chinese markets, in focus due to Beijing’s trade dispute with Washington, are set to open at 9:30 a.m. HK/SIN.
OPEC and other top oil producing countries are set to meet later on Thursday in Austria, with a series of issues on the line.
Chief among those is the discussion surrounding crude output policy.
A combination of underestimating how much oil Iran would be able to sell, along with continued record output from the U.S., has sent prices tumbling. November posted the biggest monthly drop in a decade.
In a morning note, Ray Attrill, head of foreign exchange strategy at National Australia Bank, said the “focus has been on oil, where the preliminary meetings ahead of the formal OPEC discussions today indicate agreement to some sort of production cuts with as yet no agreement on how much (1.1mn is one figures being bandies bout).”
Ahead of the meeting, U.S. President Donald Trump called for OPEC to keep oil output “as is.”
The alliance’s policy of capping output has drawn Trump’s ire because the president wants fuel costs to fall at U.S. gas stations. Throughout the year, Trump has publicly blamed OPEC for rising oil prices and ordered the group to take measures to reduce the cost of crude.
Amid confusion over what Trump and Chinese President Xi Jinping actually agreed upon at the G-20 summit in Argentina last weekend, a former governor of the People’s Bank of China told CNBC that the two economic powerhouses can make progress on their trade differences within 90 days.
“I see there is a pretty high possibility to reach some sort of success during the 90-day negotiation window,” Zhou Xiaochuan, a former PBOC governor, told CNBC’s Geoff Cutmore at the Boao Forum and Ambrosetti Meeting in Rome, Italy.
The U.S. has hit $250 billion of Chinese goods with tariffs since July, while China has retaliated by imposing duties of its own on $110 billion of American products. The trade conflict between Washington and Beijing has continued to rock global markets for much of 2018.
At a post-G-20 summit meeting in Argentina last weekend, Trump agreed not to boost tariffs on Chinese goods from 10 to 25 percent on Jan. 1, as he’d previously threatened. In exchange, the White House claimed that China would buy a “very substantial” amount of agricultural, industrial and energy products.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.998 after seeing lows near 96.8 earlier.
The Japanese yen, widely seen as a safe-haven currency, traded at 113.05 after weakening from levels around 112.7 in the previous session. The Australian dollar was at $0.7266 after sliding from the $0.735 handle yesterday.
— CNBC’s Brian Sullivan, Tom DiChristopher and David Reid contributed to this report.