Daily FNArena News

The weekend has brought about an apparent capitulation on oil production from the Saudis. The US has some more data to mull over this week while it’s pretty quiet in Australia.

RBA governor Glenn Stevens believes the commodity boom could potentially destabilise the Australian economy over the longer term. Higher inrterest rates remain very much on the agenda.

It’s more blood on the floor for Babcock & Brown today as the covenant breach moves the goal posts.

Stronger oil prices should be hurting Asia given its high level of imports but according to DBS it is demand growth through the region that is allowing growth to remain strong.

To hike or not to hike remains the main question for the RBA. Even though economic indicators are increasingly showing weakness is kicking in. Today’s May labour market data were weaker than expected.

AMP’s Dr Shane Oliver expects oil will hit US$200 per barrel in coming years while suggesting stronger oil prices increase the risk of recession both in Australia and globally.

ANZ Bank suggests signs the US dollar is bottoming implies commodity prices may trend lower in the short and medium-term. Any falls are believed unlikely to be significant.

The Investment Policy Committee at Standard & Poor’s has revised lower its year-end target for the US market to 1,490 on the S&P500 Index but still suggests a stronger second half performance.

Weekly musings from your editor. Oil priced at US$130 per barrel is not good news. Ignore this message at your own peril.

The Westpac-MI Index of Consumer Sentiment has fallen to its lowest level since 1992, a decline seen as likely to keep the RBA on the sidelines with respect to interest rates.