OPEC+ compliance with its oil output cuts rose to 220% in April, up from 157% in March. That comes despite the easing of its output caps in recent months. Of note, the bloc’s production was seen 2.6 mil bpd below the required level in April with Russia producing 1.28 mil bpd below its own required level last month.Yup. In other words, don’t expect much help from OPEC+ in trying to balance out the supply side of the equation.

The European Union and the United States agreed on Monday to cooperate more closely to counter disrupted supply of industrial commodities and food caused by Russia’s invasion of Ukraine and to combat disinformation from Moscow.Headlines:EU, U.S. AGREE TO COOPERATE ON SUPPLY CHAIN RUPTURES FROM RUSSIA’S INVASION OF UKRAINEEU, U.S. AGREE TO COMBAT RUSSIAN DISINFORMATION IN THIRD COUNTRIES EU, U.S. AGREE TO COOPERATE ON TRANSPARENCY AND MONITORING OF VALUE CHAINS TO EASE SEMICONDUCTOR SHORTAGESEU, U.S. AGREE TO INFORMATION-SHARING ON SUBSIDIES TO SEMICONDUCTOR SECTORS

Not for the first time, The Hungary are making it clear to the EU what their ‚Red-Lines‘ are for EU sanctions on Russian OilHUNGARY FOREIGN MINISTER SAYS BUT WE HAVE MADE IT CLEAR THERE WAS A RED LINE IN SANCTIONSSAYS IT HAS BEEN CLEAR TO EU WHAT HUNGARY’S STANCE ON OIL SANCTIONS IS FOR WEEKSSAYS RUSSIAN OIL SHIPMENTS VIA PIPELINES SHOULD BE EXEMPTED FROM PROPOSED SANCTIONSSAYS IF PIPELINE SIPMENTS ARE EXEMPTED HUNGARY CAN „LIVE WITH“ THIS CURRENT EU SANCTIONS PACKAGEHUNGARY FOREIGN MINISTER SAYS WE HAVE NOT RECEIVED ANY SERIOUS NEW PROPOSAL FROM THE EU ON SANCTIONS SINCE COMMISSION PRESIDENT’S RECENT VISIT TO BUDAPEST

Newsquawk’s US Market Open: Mixed trade amid conflicting China drivers & multiple geopolitical updatesFull NoteEuropean bourses are mixed, Euro Stoxx 50 -0.6%, following a similar APAC session with impetus from Shanghai’s reopening offset by activity data and geopoliticsStateside, futures are lower across the board, ES -0.4%, with the NQ marginally lagging as yields lift; Fed’s Williams due later before Powell on TuesdaySweden & Finland are moving forward with NATO bids, with Russia pushing back against this; no progress expected today on the EU’s 6th sanctions packageEUR lifted amid commentary from Villeroy on the currency, with the DXY outpacing peers but lower overall amid the Single Currencies weightEGBs slip on Villeroy, periphery hit further with the China data weighing while USTs are contained and the curve marginally flatterWTI and Brent are pressured and torn between the aforementioned China factors amid geopolitical risk/news; Wheat bolstered by India’s export banLooking ahead, highlights include NY Fed Manufacturing, Speeches from Fed’s Williams, BoE’s Bailey, Ramsden, Haskel & Saunders

The global fiscal recovery in 2021 that followed the Covid-19 shock of 2020 has slowed sharply, affected by higher commodity prices, rising inflation more generally, increased borrowing costs, slowing real GDP growth and the war in Ukraine, says Fitch Ratings.FITCH RATINGS SAYS GLOBAL FISCAL RECOVERY TO SLOW IN 2022 AND 2023

FITCH SAYS GLOBAL FISCAL RECOVERY IN 2021 THAT FOLLOWED COVID-19 SHOCK SLOWED SHARPLY, AFFECTED BY HIGHER COMMODITY PRICES, RISING INFLATION, AMONG OTHERS

FITCH SAYS GLOBAL FISCAL RECOVERY IN 2021 WILL BE AFFECTED BY INCREASED BORROWING COSTS, SLOWING REAL GDP GROWTH AND WAR IN UKRAINE

FITCH SAYS POLICY INTEREST RATES ARE RISING, AND FITCH BELIEVES THIS MARKS AN END TO ERA OF VERY LOW GOVERNMENT BORROWING COSTSFull Note

EC Cuts 2023 Euro Zone Economic Growth Forecast to 2.3% From 2.7% Seen in FebInflation, which the European Central Bank wants to keep at 2.0% will be 6.1% this year, the Commission forecast and fall only to 2.7% next year. Before the war, the Commission expected prices to grow 3.5% in 2022 and 1.7% in 2023.The forecast is the first comprehensive estimate of the economic cost of the war in Ukraine for the 19 countries sharing the euro and the wider 27 nation EUThe stagflation vibes continue

A weekend report of comments from a „top official“ in Iran. Bloomberg (gated) carry the report, citing  Mohsen Khojastehmehr, managing director of the National Iranian Oil
Co.. he spoke with reporters Saturday in Tehran.

Iran has capacity to double oil exports if there’s sufficient demand

Iran will “exert maximum effort to recoup its crude oil market
share and revive its customers,”

Iranian crude exports have plunged ever since previous US President Trump dumped the Iran nuclear deal in 2018. Talks between the European Union and Iran on attempts to revive the deal are ongoing. I’ve been updating on the negotiations for months and months but they are persistently stalemated. We get positive and negative indications on the talks on a seemingly never-ending cycle. Resuscitation of the deal, if it comes, will eventually bring more Iranian oil to market, over time. 

Oil price update – trading resumes Monday morning Asia time/Sunday evening US time:

Friday report on a Barclays note eyeing EUR/USD under 1.00. Not that’s 1.00 is too far away!
„If Russia closes its gas taps (to Europe), we expect EURUSD to fall below parity,“ 

„Our economists estimate that a total loss of Russian supplies, combined with rationing of the remainder, could dent euro area GDP by more than 5 percentage points over one year“.
The heightened concern over supply of Russian gas into Europe has been ongoing for weeks/months since Russia launched its invasion of Ukraine. As for euro, its been heavy all year with monetary policy divergence between a tightening Federal Reserve and a much more hesitant European Central Bank also a factor. 
EUR/USD:

Iraq’s state-run North Oil Company spoke with a media outlet on Saturday, saying a Kurdistan Regional Government (KRG) force had seized two oil wells in Bai Hassan oilfield in northern Kirkuk.

Reuters follow up with 

the Kurdish government denied „all allegations and rumours which claim that the regional government had occupied and took over oilfields in Bai Hassan … with the support of an armed force“.

Something to keep an eye on come oil trade reopening on Monday morning (Asia time, Sunday evening US time)

MUFG recommends selling AUD/JPY in a new trade this week and also re-emphasizes its call for buying EUR/GBP.
In AUD/JPY, they recommend selling at spot at 89.50 with a target of 84.50 and a stop at 92.50.
„We are recommending a new short AUD/JPY trade idea to reflect our view that the curret period of risk aversion is likely to extend further in the near-term,“ MUFG notes. 
„We believe there is room for the JPY to continue to rebound in light of short positioning and stretched valuations. The AUD alongside other commodity currencies are coming under more selling pressure as global growth fears intensify,“ they wrote.
They also maintain a long EUR/GBP trade with a target at 0.8800 and a stop at 0.8440. Spot is at 0.8500.For bank trade ideas, check out eFX Plus. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. Get it here.