Oil experienced more than a few volatile sessions last week after stockpile data and jawboning from the Middle East saw prices whipsaw. Even with tensions between Iran and Saudi Arabia climbing, political risks took a backseat to tepid demand fundamentals and growing supply. US output continues to climb alongside recovering Nigerian and Libyan output, offsetting the OPEC production deal efforts. Furthermore, should prices remain under pressure, it could thwart any tightening efforts by major global central banks.
Apart from oil volatility, the Pound also experienced a dramatic week. The more hawkish bent from Bank of England Chief Economist Andrew Haldane contrasted sharply with the dovish viewpoint of Governor Mark Carney. Supporting the more hawkish viewpoint is inflation outstripping wage growth alongside manufacturing orders at the highest level since 1988. Mirroring the BoE, Federal Reserve officials also issued conflicting viewpoints on the outlook for policy. However, in a positive sign, both existing and new home sales rose during May, alleviating fears of an imminent housing sector correction. To cap off the week, the Reserve Bank of New Zealand kept interest rates on hold, citing spare capacity and an uncertain inflation outlook as a rationale for maintaining accommodation for the foreseeable future.