The Petroleum markets lead the charge today rebounding from support levels after OPEC Secretary General stated that the cartel is unlikely to change oil-production quotas at its meeting next month with the market as it stands. OPEC Secretary-General Abdalla el-Badri said. “If things stay as they are, with prices at this level, ministers will be reluctant to do anything,” el-Badri told reporters in London today. Prices at $70 to $90 a barrel are “acceptable,” he said, adding that the market is currently influenced by fluctuations in the dollar and equities, not by demand and supply fundamentals. The RBOB contract was able to hold the 200 day moving average, and today’s move will probably continue to pick up steam. Gasoline rallied 9 cents or 5% today, while Crude Oil was up more than $2 per barrel.
The US equity markets continue to push forward building on yesterday’s rallied with the S&P 500 Index adding 11 points to retake 1100 and closing at 1103.
The surprise of the day came when the Reserve Bank of Australia surprised the market by leaving its benchmark rate unchanged at 3.75% saying it needed more time to judge the effects of the previous three rate hikes. The decision defied the expectations of all economists surveyed sent 1-month T-bills yields up some 15 basis point. The reaction of the mortgage market may have influenced policymakers. Governor Stevens noted lenders had increased borrowing costs by about 1% compared with the RBA’s 75 basis point of hikes. The RBA also made reference to Chinese moves to reduce the degree of stimulus in their economy and credit conditions in the major countries.
In the US, In one upbeat sign, an index of pending sales of previously owned homes increased 1.0% to 96.6 in December, the National Association of Realtors said Tuesday, suggesting the housing market is steadying after sharp swings caused by the uncertain fate of a government tax credit. Sterling had little traction today despite stronger than expected January construction PMI (48.6 vs. 47.0 expected).