The Week Ahead

Unless you hit the pub early on Friday you probably know that oil fell almost 4% after OPEC ringleader Saudi Arabia dashed hopes of a co-ordinated production cut or freeze in the coming days. OPEC and Russia – the world’s biggest energy exporter – are meeting this week in Algiers for talks which should include proposals to freeze output in an effort to prop up prices and rebalance the oil market in the face of a sustained glut which has driven prices to below $50 a barrel.

Earlier in the day, both crude and Brent oil were headed for significant weekly gains after news that Saudi Arabia offered to roll back production if rival Iran agreed to cap its production. Their later statement seemed to indicate it expects Iran’s reply to be negative and oil nose-dived, dragging down most US bourses with it.

Twitter Tweets for Help

Struggling with the slowest revenue growth in its short (public) history, Twitter Inc is reportedly in talks to sell itself. It is anonymously rumoured that Google – amongst others – is interested in taking a substantial stake in the social media company. That would mark another foray into social media by the search-engine giant, after its proprietary Google+ platform has so far failed to get the desired traction.

Twitter shares jumped 20% to over $22 on the news, its best 1-day performance since going public in 2013. The company now has a market value of approximately $16 billion.

US GDP, EZ Inflation mark Quarter-End

It will be mostly quiet on the Western front in terms of economic data for the first few days of the week. On Tuesday, The Bank of Japan will release its monetary policy minutes which might give some further insight about the board’s stance on further monetary policy accommodation. ECB speakers, including President Mario Draghi will be giving speeches at various events during the week, but the week’s highlights are scheduled for the end of the week.

US quarter-on-quarter GDP is set for release on Thursday, while all-important Eurozone inflation figures are out on Friday. While both data points are already very important in their own right, investors will be even keener to interpret them this time round as any substantial deviation from consensus might shape US or European monetary policy in the near-term.

If you also account for the fact that Friday is also an end-of-month and end-of quarter day, then some volatility might be expected across a wide spectrum of assets as global investment managers rebalance their portfolios.