The week ahead – Oil prices crash as the Strait of Hormuz reopens

It was another volatile week for global sharemarkets, with the S&P 500 in the US falling 2.0% as investors rotated out of technology stocks into other parts of the market. The local NZX 50 was flat for the week, although it has produced a solid 1.9% return this month and is edging back toward positive territory year to date.

Oil prices fell 10% on the back of hopes for a sustained resolution in the Middle East. That saw US crude finish the week just below US$70, almost 40% below last month’s peak and the lowest since late February.

US markets will be closed on Friday for the Independence Day holiday, while bond markets will observe an early market close on Thursday. The monthly jobs report (due Thursday) will be a focal point, as will Federal Reserve Chair Kevin Warsh’s appearance at the European Central Bank’s annual forum in Sintra, Portugal on Wednesday.

The local highlight will be the ANZ Business Outlook for June, which will hopefully reflect early signs of optimism after the sharp decline in fuel prices in recent weeks. We’ll also get May employment indicators, the RBNZ’s mortgage lending report and a consumer confidence reading (also from ANZ).

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