Markets on Monday opened to the news of a surprise OPEC+ Oil output cut seeing WTI oil gap open over 5% that along with weak manufacturing figures out of the US saw a whipsawing session in equities, the Dow did finish strongly though, up over 300 points, dramatically outperforming the Nasdaq by the most since October last year, the tech heavy index finishing in the red by about a quarter of a percent.

The DOW was helped along by outperformance of energy stocks, with Dow component Chevron rallying over 4% on the OPEC news, while market uncertainty saw investors rotate from the more risk sensitive growth stocks listed on the Nasdaq.

The big news of the day was the surprise oil output cut from OPEC+ after they announced on Sunday that they would be cutting daily production by more than 1 million barrels a day starting in May and running until the end of the year. This sent WTI crude surging past 80$ a barrel and hitting it’s highest point since January this year and back to the highs of it’s 2023 trading range.

This also makes the Feds job a bit harder, as the spectre of higher oil prices will likely end in higher energy costs which will in turn fuel inflation which could lead to a more hawkish Fed, rate hike odds for the May meeting increased to 56% from the 53% previously.

In FX the USD was weaker across the board.

Gold pushed higher on this weakness, along as being a safe haven as the markets were bit shaken by the OPEC news, it touched on 1990 USD an ounce before pulling back modestly.

EURUSD rallied again above 1.09 to test the resistance level round 1.0930 where it again found sellers to hold it there.

The Yen found some extra support in a move lower in US 10 year yields and rallied despite some weak manufacturing figures out of Japan.

CAD also performed strongly, the dramatic surge in oil prices helping the Loonie to outperform the USD.

AUD outperformed ahead of today’s RBA rate decision, hitting the highs just under .68  that were set back in March. The futures market is fully pricing in a pause later today from the RBA, but there are a few economists who are predicting another 25bp hike, so there could be an upside surprise come 2:30pm Sydney time.

Todays calendar below: