Oil prices jumped Wednesday after OPEC leaders announced a surprise deal to bring back production quotas. The Canadian dollar was the top performer while the yen lagged. Japanese retail sales are due up next.

النفط و العملات بعد الحوار الأول (للمشتركين فقط)

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As we feared yesterday, the gap closed enough among OPEC members to reach a consensus on production quotas. WTI crude oil jumped $2.26 to $46.95 in response.

Moments before the informal meetings began, Algeria's oil minister said no deal was coming but that proved to be selective misinformation.

After five hours of meetings, OPEC released a statement to say production will be capped in the range of 32.5 mbpd to 33.0 mbpd. That's down from the August level of 33.2 mbpd.The caveats are that a committee will be formed to decide on production levels and that it won't be adopted until the Nov 30 meeting.

There is an element of smoke-and-mirrors here because in May OPEC was producing at less than 32.5 mbpd but countries – especially Saudi Arabia – have been inflating numbers in anticipation of a freeze or a 'cut' like this. Also, this is seasonally the peak of production in the Middle East so what looks like a reduction still means they're pumping at the maximum.

Still, if the deal is finalized it's a freeze at worst and that's more than was expected Wednesday. WTI broke above the downtrend since June in response and USD/CAD fell more than 100 pips to back away from the 200-dma.

The enthusiasm for the deal could fall apart on how production is measured or exemptions to Iran, Libya and Nigeria but for now it's good for oil prices and will likely support them further in the days ahead.

OPEC was far from the only thing on the agenda Wednesday. Yellen sounded more dovish than her FOMC press conference as she underscored that the Fed has time to allow employment to grow further before worrying about inflation. Draghi repeated his wait-and-see mantra on previous programs while imploring European  governments to take up the stimulus mantra.

The main economic data point was durable goods orders. Core orders rose 0.6% compared to -0.1% expected but that was a total mirage as the prior was revised down to +0.8% from +1.5%. A soft shipments reading also ensures that GDP estimates for Q3 will tick lower.

Overall in FX the moves were modest but it may take some time to digest all the political, geopolitical and economic balls in the air. USD/JPY tracked slightly higher to 100.70 and will be in focus with Japanese retail sales due at 2350 GMT. The consensus is for a 0.6% m/m drop after a +1.4% reading in July. There is already talk of a BOJ cut to -0.30% in October.

The long-anticipated special OPEC meeting will take place in Algiers on Wednesday, we look at the likely outcomes. The Australian dollar was the top performer  Tuesday while the euro lagged. China September consumer sentiment and comments from the RBA's Edey are due next. A new Premium video has been posted, charting the existing and futute charts.

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The oil market has probably priced a 90% likelihood that the meeting in Algiers Wednesday won't result in anything. Several key OPEC members have explicitly said there will be no agreement. But almost in the next breath, the same members have hinted that they are still having discussions.

The urgency from some members to get a deal before the Nov 30 OPEC meeting is real. Many are worried that rising Iranian and Libyan supplies have left the market vulnerable to a sharp drop and that waiting too long isn't an option.

Yet the rift between Iran and Saudi Arabia remains. Lately, the Saudis have sounded open to more Iranian production but the exact battle lines aren't clear and equally important is a dispute about measuring and reporting output.

What's dangerous in the near-term oil trade is that even if the 'expected' outcome of no-deal happens tomorrow, then oil could tumble. In Nov 2014, when OPEC first broke down it was essentially pre-announced but when the actual headlines came, the bottom fell out of crude. We worry about a replay Wednesday.

At the same time, just in the past few hours Saudi Arabia has hinted that the gap is closing. A surprise deal to cap production could spark a brutal short squeeze.

In the middle, OPEC has the opportunity to try and talk down oil. After years of confused messages, leaders have improved their jawboning this year and they may try to hint at a future cut rather than just a freeze. Ultimately, it will all be semantics but in the frantic oil market, that could lead to a big intraday move.

In Asia-Pacific trading today, don't expect the speech from Edey or the 0145 GMT Westpac-MNI China consumer sentiment to be significant market drivers.

سجل لندوة (وبينار) مساء يوم الخميس قبيل اصدار أهم بيانات الأسبوع من أوروبا و أميركا

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Not even an oil rally could undo the negative Canadian dollar sentiment on Monday in a sign of trouble ahead of the loonie. The yen was the top performer while USD lagged alongside CAD. Data on Chinese industrial profits are due next. 6 of 8 existing Premium trades are in the green, 2 are flat. 5 in FX, 2 in metals & 1 in equity index.

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USD/CAD is approaching some key technical levels ahead of Poloz's speech. All else equal, the pair should have fallen on Monday as oil prices climbed 2.6% and the US dollar generally softened. But all else wasn't equal and the weak Canadian data on Friday continued to hurt the loonie.

In addition, the first US Presidential debate takes place later Monday at 0100 GMT and with Trump climbing in the polls, the risks to Canadian-US trade deals and relations are rising and that could be a long-term CAD drag.

Speculation is growing that the Bank of Canada is readying the market for a dovish tilt, and perhaps another rate cut. In his most-recent appearance, Poloz said growth and inflation forecasts were likely to be revised lower.

At the moment, USD/CAD is approaching the 200-day moving average at 1.3244 and the July high of 1.3253. With spot only 20 pips below, Poloz could easily push the pair through or set the stage for a firm rejection.

Another item on the agenda in the hours ahead are the BOJ Minutes but note that it's for the July meeting, which was the preparatory meeting for last week's changes. It's unlikely to hold anything new or unknown.

The final event is the August Chinese industrial profits data at 0130 GMT. However, the fallout from the Presidential debate is likely to be the main trading topic in the day ahead.