Oil continues to rally after the OPEC+ meeting yesterday pushing crude up above $70 a barrel. The group confirmed their previous stance of slowly withdrawing the production cuts over the coming month but didn’t give any indication of their plans beyond July. This could be linked to the Iran deal as a lifting of US sanctions on the Iranian oil industry would see a significant increase in production from the country. With global demand recovering there appears to be grounds for a speeding up in the gradual removal of last year's production cuts but for now the oil industry is keenly awaiting the next group meeting on July 1st when more may be known about the path of Iranian supply.\
There were a number of Fed speakers yesterday with them all putting forward their views on inflation, this we have seen over the last several weeks as they appear to be trying to avoid another taper tantrum, a somewhat different stance than back at year end. Brainard said she will carefully monitor inflation and inflation indicators for signs that longer-term inflation expectations for any signs that expectations are evolving in unwelcome ways. Kashkari rejected inflation concerns, noting that the bank has the tools required to adjust interest rates if needed to control inflation. Bullard concentrated on the labour market advocating that the Fed should look at a wide range of metrics to judge labour market slack. Quarles also concentrated on the employment situation with regard to the inflationary consequences saying that “there was a significant way’s to go to full employment”. With May’s nonfarm payroll report due on Friday we should get a further look at the employment situation, the market looks for 653k jobs added following the disappointment last month when the calls were for 1million plus new jobs and the release came in at just 266k, our guess, and that’s all it can be, is +450k - we shall see.