OPEC+ is in crisis after a deepening dispute between Saudi Arabia and the United Arab Emirates led to the stalling of an agreement to increase production. What happens next will determine whether the breakdown of the negotiations is likely to escalate into a conflict as painful and destructive as last year's price war. Crude oil futures prices rose to $80 a barrel because of the failure to reach an agreement to increase production. At a time when inflationary pressures are rising, this is about the stability of the global economic recovery and OPEC+ 's ability to maintain its hard-won control of the oil market. 

The Biden administration urged OPEC+ to find a compromise to increase production, according to White House officials familiar with the situation. The group had previously cancelled plans for the talks. A White House spokesman said on Monday that although the United States was not a participant in the negotiations, it was "closely monitoring the OPEC+ talks and their impact on the global economic recovery from the COVID-19 epidemic" and that "government officials have been in contact with relevant parties to urge a compromise solution to implement the proposal to increase production."

During talks on Monday, German Chancellor Angela Merkel and French President Marco Macron called on Chinese President Xi Jinping to relax navigation to Europe and deepen contacts with the region. China-EU cooperation faces difficulties as EU leaders have lashed out at China's human rights issue, and the overall focus of the videoconference is to try to solve the problem. Merkel and Macron are trying to become more independent of the United States in EU foreign policy, especially toward China and Russia. The two leaders tried to restart negotiations with Russia last month, but EU member states uneasy about this eventually overturned the plan. 

Luis de Guindos, vice president of the European Central Bank, said inflation in the eurozone could be as high as 3 per cent in the fourth quarter. Guindos said at a virtual event that the surge in inflation would be temporary. It said it was monitoring the potential second-round impact of price leveling.

The Reserve Bank of Australia is likely to gently scale back some of its emergency stimulus measures to reflect a strong economic recovery, while Australia's largest city is locked in because of an outbreak caused by a mutated strain of Delta. The RBA will hold a monetary policy meeting on Tuesday and is not expected to move bonds anchored in three-year yields from the current April 2024 to November 2024. If it is transferred to new bonds, it means that interest rates will not rise until 2025. 

British Prime Minister Boris Johnson announced plans to end social alienation and venue restrictions on July 19, saying people must learn to live with novel coronavirus. Whether to wear masks on any occasion will be voluntary, and the government will no longer instruct people to work from home. At this point, Britain's anti-epidemic action has undergone a decisive change from legal requirements to personal responsibility. All remaining companies, including nightclubs, are allowed to reopen, and companies are not required to show vaccination or testing certificates before allowing customers to enter. The final decision needs to be made on July 12th.

The American stock market was closed yesterday for the Independence Day holiday. European stocks did well, boosted by optimistic data on business activity in the euro zone, with Morrisions surging nearly 12 per cent, pushing the UK mid-cap index to a record high. The pan-European STOX600 index rose 0.3%, the third day in a row. The eurozone's composite purchasing managers' index (PMI) for June rose to a 15-year high of 59.5 yesterday, lifting European stocks to close higher across the board. London's FTSE 100 index hit a two-week high, closing at 7164, up 41 points, or 0.58 per cent. The FTSE 100 index hit a two-week high amid concerns that Prime Minister Johnson was due to announce plans to end England's social and economic restrictions yesterday, with the UK midcap index rising 1.2 per cent, its best one-day performance in two months. The Frankfurt DAX index closed at 15661 points, up 11:00, or 0.08 per cent. CAC in Paris closed at 6567 points, up 14:00, or 0.22%.

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