U.S. equity-index futures were steady, and crude oil traded above $75 per barrel, as investors weighed the potential for a more hawkish tilt at the Federal Reserve and OPEC+ tensions over oil production.
Contracts on the S&P 500 Index slipped marginally after the benchmark index notched up another record on Friday. West Texas Intermediate crude rose for a fourth time in five days as the United Arab Emirates held out against an extension of output increase by the OPEC+ alliance.
The U.S. jobs report Friday signaled the economy is gaining steam but not at a pace that would prompt the central bank to taper stimulus quickly. Fed watchers awaited June meeting minutes due Wednesday to gauge how far divisions among members have widened on the tapering time line. U.S. stock and bond markets remain closed for the July 4 Independence Day holiday.
“Today’s public holiday suggests trading will be quiet, although the Fed story will very much re-emerge on Wednesday evening when investors pore through the minutes of the pivotal June 16th FOMC meeting,” ING Groep strategists including Chris Turner wrote in a note. “Before then, we expect much focus on the commodity complex.”
Oil continued its inflationary surge above $75 a barrel with the bitter spat between Saudi Arabia and the UAE leaving the global economy guessing how much oil it will get next month. It has forced OPEC+ to halt talks twice already, with the next meeting scheduled for Monday.
While the jobs report eased concerns about the Fed’s hawkish pivot last month, central banks around the world are beginning to pull back from from the emergency stimulus they deployed to fight the pandemic-driven global recession. For instance, the Reserve Bank of Australia is expected to pare back some stimulus at its Tuesday meeting despite ongoing curbs against a recent Covid-19 flareup.