S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
DBS Bank’s Philip Wee notes that the US Dollar (USD) stayed rangebound even as Brent crude jumped on news that the UAE will exit OPEC and OPEC+ on May 1 and aims to boost production sharply. He highlights that a potential oil supply glut, combined with evolving Federal Reserve (Fed) leadership under Kevin Warsh, could erode USD’s haven premium around the May 1 deadline.
Dollar holds range as oil jumps
“The USD was subdued despite higher oil prices. Brent crude rose 2.8% to $111.26 per barrel overnight, driven by the UAE’s shock announcement to exit OPEC and the broader OPEC+ alliance on May 1.”
“Although this was Brent’s first daily close above $110 since March 31, the DXY Index held a tight range of 98.2-98.9 in the past week.”
“Looking past the geopolitical schism within the Gulf Cooperation Council, the UAE’s intention to increase production to 5 million barrels per day from its current quota of 3.4 million bpd could send oil prices tumbling if the US and Iran surprises with an off-ramp to end the twin blockade in the Strait of Hormuz on May 1, which is the 60-day deadline of Operation Epic Fury under the War Powers Resolution of 1973.”
“If so, the focus could shift towards the next chapter of the Fed under President Donald Trump’s nominee, Kevin Warsh.”
“Given the convergence of these high-stakes geopolitical and institutional shifts, investors should brace for heightened volatility as the May 1 deadline approaches. USD will lose its haven premium should surprises point to a possible oil supply glut that supports the incoming Fed Chair’s paradigm shift.”
