Norwegian oil and gas workers begin strike – what’s the impact for Europe?

GBP

Yesterday saw a slow start to the week for markets as 4th of July celebrations meant US markets were closed. Sterling posted marginal gains against the US dollar but fell against the euro. This being said, it is a very slow week on the data front for the pound with no key releases expected. Sterling will take its direction through general market trends and news headlines.

USD

Across the pond, Wednesday will see the latest FOMC minutes released. These minutes are key for forward guidance and any unexpected comments could provide volatility for the dollar. In addition to the minutes, the latest ISM services PMI data for June is to be released. A reading of 54.5 is expected, down from the previous 55.9. Finally, Friday will be dedicated to June’s jobs report data – Non Farm payrolls are expected in at 270k down from a previous 390k.

EUR

European stock markets are expected to open higher, continuing the positive start to the new month with investors focusing on guidance from a number of key central banks. Healthy economic data out of China indicates the fastest growth since July last year and the first expansion since February as easing Covid restrictions revived demand.

We also note that Norwegian offshore workers began a strike earlier in the session that is expected to cut the oil output by as much as 130,000 barrels per day from Wednesday, the country’s oil and gas association forecast on Sunday, about 6.5% of Norway’s production. However, there remain concerns that economic activity, including demand for energy, will be hit amid a broad tightening in global financial conditions. This is occurring as a number of central banks fight rampant inflation.

Economic data due for release in Europe today includes French industrial production, final PMI data for the Eurozone and Spanish consumer confidence.