Market Moving Fundamental News

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FED October protocols help markets to end the week on a positive note

 

Substantial growth of Asian share indices on Thursday turned to a relatively calm sideline movement today, ending the week with gains.

 

MSCI Asia Pacific index increased by 1.9% after the publication of Fed October protocols, which hinted investors that US fiscal rate will be increased in a step-by-step manner.

 

Japan index Nikkei 225 dropped by 0.4% in Friday, Topix lost 0.3%, Australian S&P/ASX 200 made insignificant gains of 0.3%, South Korean Index Kospi stays put. Shanghai Composite rose by 0.5% as no significant reports from China were released on Thursday, Hang Seng slightly declined by 0.2%.

 

October protocols clearly indicate that Fed is set for the rate liftoff in December and in case they back down, the markets can be thrown into chaos. Released macroeconomic data made a quite positive impression on investors so bulls dominated the markets this week.

 

Shares of China Railway Construction Corp. and CRRC Corp. are rising by 2% and 1.6% respectively on the rumors that China and Poland are negotiating a construction of a high-speed railway in Poland.

 

Rising commodity markets reflect the appreciation of Chinese metal manufactures’ shares: China Molybdenum and Tongling Nonferrous Metals, which gained 10%.

 

In contrast, oil firms in China suffer from dropping prices for the third consecutive week: PetroChina lost 0.6% and Shenzhen Energy Group dropped by 1.9%.

 

Stay tuned with Tickmill Market Commentary

 

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Aussie is in deep thoughts: will it go north or south?

 

AUD/USD

 

The Australian dollar has ran into the weekly descending channel:

 

Let us move to the daily chart. If Monday closes under the broken line and form a candlestick pattern “bearish merger”, this will be the signal to sell the pair:

 

On the other hand, if we break the descending line with the tree candles, then it makes sense to buy the pair on a pullback, considering, that the downtrend lies on three points:

 

 

 

 

 

 

GBP/USD

 

The old gentlemen has ran into the broker upstream channel and formed a bearish merger, which is a good signal to sell upon the market opening. We will place a stop loss over the tail of the merger with the target of 1.4650:

 

 

 

Stay tuned with Tickmill Market Commentary

 

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Oil prices can plunge to $25 without OPEC’s action

Oil price can soon plunge to $25 level, if OPEC members will stay idle and won’t take steps to re-balance the market, said Venezuela Oil Minister, Euxolio del Pino.

 

During his speech in Teheran past Sunday, Euxolio del Pino said that Venezuela pleaded other OPEC countries to take appropriate measures to boost Oil prices to their equilibrium at $88/bbl. This price level could allow Oil producers to cover the costs of developing new extraction facilities, he noted.

 

According to his words the offer is being considered by Saudi Arabia and Qatar.

 

“We can’t allow the market to keep setting Oil prices, the aim of OPEC is taking action on Oil price decrease and we have to go back to those principles” – said Del Pino.

 

OPEC meeting will be held on December 4th. They keep around 40% of world’s Oil supply and their volume of production has been exceeding the official quote of 30M bbl./day for 17 months.

 

Meanwhile, Russian boycott will be extended for 6 months according to the decision of the US and EU leaders, reports Channel NewsAsia with links to diplomatic sources.

 

According to Channel NewsAsia, the agreement was reached offstage during the summit of “Big 20″ despite the calls to restore cooperation with Russia to effectively fight terrorism.

 

Current sanctions against Russia expire in January 2016. Together with Ruble being significantly overestimated according to Goldman Sachs, this could cause a spike in USD/RUB to the equilibrium of 70 level. We would advice traders to carefully watch this pair.

 

Source : Tickmill Market Commentary

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Saudi Arabia comments produced minor support to Oil prices

 

 

Situation in the Oil market picks up as the participants see the first efforts from Saudi Arabia to give up their dumping campaign and support prices by cutting crude output. Strengthening Dollar before the December rate hike and full US oil stockpiles create additional pressure on bulls.

 

Brent Futures with delivery in January (LCOc1) rose by 11 cents to $44.94 per barrel, WTI crude added 17 cents to 41.92$ at the time of this release.

 

Traders are waiting for positive outcome of OPEC meeting on December 4th, where measures will be taken to ease the market surplus.

 

Saudi Arabia encouraged OPEC participants to build up Crude exports starting from the end of 2014 in order to eliminate high-cost Oil produces from market and defend the market share. This strategy seems to be working as many Oil producers couldn’t resist the nosedive price drop of more than 50% from its peak in 2014.

 

“As long as nothing concrete is being rolled out, we remain skeptical of the possibility. Therefore … we would think that the Dec 2015 OPEC meeting would be a non-event again,” Daniel Ang at Phillip Futures said on Tuesday.

USD/RUB is getting ready for a hike to 70 level.

 

Official USD/RUB rate set by CBR rose by 73 copecks from 64.8673 to 65.5973 which could indicate that correction of RUB against USD is starting..

 

Source : Tickmill Market Commentary

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North correction on the commodity market

 

Commodity assets and currencies signal about a possible correction to growth. However, it is only a correction as the market is waiting for the interest rate increase in December. If this happens, then the commodity unit has all the chances to continue its movement south.

 

Gold

We will try buying gold after the reverse and pullback to the level of 1077.00:

 

 

NZD/USD

 

There is an inverse head-and-shoulders forming for the New Zealand currency, therefore there is an option of buying Kiwi after the break and rollback to the neckline. There is also a more aggressive option – to place a buy on the break of the neckline:

 

Silver

 

Silver

 

Silver has stopped by a strong day support and is forming a potential bottom by “drawing” dojis – we will try to buy small volumes of the pair at a current rate:

 

 

Source : Tickmill Market Commentary

 

 

 

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This is going to be a fun week for EUR/USD

 

Upcoming week is crucial for the EUR/USD pair and especially for the US Dollar. There is the ECB meeting and the US Non-farm payrolls scheduled for this week.

 

As for the ECB meeting, we anticipate a continuation or even an increase of the QE program as well as further decrease of the deposit rates. In fact, falling Euro is a good tendency for the Eurozone, considering its deflation perspective.

 

As for the US Dollar, it is worth expecting a strong data on the labor market, although the Fed officials’ comments can weaken Dollar. Let us remind, that the Fed’s committee is not pleased by the Dollar’s strengthening in the world market as this starts to harm American exporters.

 

In general, there are chances of Euro’s correction considering that we have come to the important support levels for the EUR/USD pair.

 

 

EUR/USD

 

Euro is approaching a strong day support at 1.0460-1.0520 and there could be a reverse for Euro. It is interesting to wait for the confirmation signs in the form of candlestick signals. On the other hand, we are not eliminating the chances of breaking this support:

 

 

 

XAU/USD

 

Despite the correction expectations gold continues to fall. Focusing on the height of the broken triangle, there are chances for the precious metal to reach not even a 1000.00 level, but also to fall lower to the 980 dollars per ounce:

 

 

NZD/USD

 

Everything is simple when it comes to Kiwi – we are approaching the upstream channel. We are more prone to buy the pair, however focusing on the candlestick signals:

 

 

 

source : Tickmill Market Commentary

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China’s economy stalls.USD bulls eased the pressure on Euro and Yen.

 

As the official investigation showed on Tuesday, Manufacturing industry in China has been shrinking for four consecutive months and reached its 3-year lows in November. This indicates that Chinese economy is slowing despite of the government efforts to boost it.

 

Purchasing manager index (PMI) for manufacturing sector in China dropped to 49.6 points in November while the same figure for the previous month was 49.8 points, reports National Statistics Bureau. The figure fell short of Bloomberg analysts’ expectations. Sub-index of new orders declined to 49.8 points comparing to 50.3 points in October. Non-manufacturing PMI grew to 53.6 points in November comparing to 53.1 points in the previous month.

 

Some analysts suppose that the biggest Eastern economy will step into a stage of revitalization in Q4, as the incentive package applied by the government will take effect gradually. For this reason many analysts remain discreet in their forecasts.

 

Meanwhile, US Dollar index (USDX) finally turned bearish when traders started to buy Euro, which was affected by the fears of QE extension by ECB for a long time. USDX dropped to 100.05 (-0.12%) by 6:00 GMT, though it was very close to its March highs at 100.390.

 

EUR managed to overcome its 7-month low of $1.05575 and reach $1.0580. However, strong US Dollar makes it difficult for the E.U. currency to continue growth.

 

USD/JPY dropped to 122.89 (-0.13%), on the rumors that the biggest Japanese pension fund began hedging the exchange rate to support the national currency.

 

Source : Tickmill Market Commentary

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Euro suddenly surged against Dollar. Oil prices increase.

 

Oil turned bullish as Euro surged by 3.1% against Dollar before the OPEC’s meeting scheduled for today. ECB President Draghi stated that QE program will be implemented in less aggressive way, which disappointed investors and resulted in Euro boost against other majors.

 

GMT Brent futures rose by $0.16 to $44.00/bbl., WTI price appreciated by $0.22 to $41.30. Prices rose by 3% on Thursday.

 

There has been some rumors spread by the internet-magazine Energy Intelligence on Thursday that OPEC is going to propose a production cut by 1M barrels daily. Despite these rumors, analysts tend to think that organization won’t make this decision. Market experts suppose that Indonesian comeback to OPEC and Iran’s intentions to increase output will have a much bigger impact on the markets.

 

“There is a possibility that OPEC will increase output by 1M bbl./day in case Indonesia participates to OPEC”, – says National Australia Bank analyst Vian Lay. According to analysts’ expectations, Oil prices will float in a range of $46-$54/bbl.

 

Meanwhile EUR rose against other majors the most from 2009 and USDX dropped to 97.591, retreating from its 12-year peak.

 

Today investors are waiting for the NFP data release which will give a clue whether FED will increase the interest rate in December or not.

 

Source : Tickmill Market Commentary

 

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[leverager 10]

US stocks closed with a loss on Monday, Oil prices dropped sharply

 

US stocks failed to finish Monday trading session in a green zone. Dow Jones declined by 0.66% or 117.12 points to 17730.51 points. S&P500 lost 14.62 points (0.7%) to 2077.07 points. Nasdaq Composite tumbled by 0.79% (40.46 points) to 5101.81 points.

 

Daily volume averaged 7.4B shares which exceeds an average daily volume by 4.8% in the last three months.

 

Market Cap of Chevron Group (N:CVX) and Exxon Mobil Corp (N:XOM) dropped by 2.6% on the news that OPEC won’t limit their production volumes.

 

WTI prices steeply declined by 5.8% to $37.65/bbl. after a 2.7% decline on Friday. The fall was caused by OPEC’s resolution to maintain the output quota on the same level at 31.5M bbl. daily. OPEC members agreed to work uncapped, which basically means that there are no limits for production until the next meeting in June 2016.

 

Seven out of ten sectoral groups from S&P500 plunged on Monday following the Oil and commodity companies. The stocks of consumer and communication companies rose at the same time.

 

Shares of Consol Energy and William Co’s sharply dropped by 13%.

 

Market cap of the copper-production company, Freeport-McMoRan, lost 7.9% on Monday which became the biggest drop for the last two months.

 

Shares of JetBlue Airways, Delta Air Lines, and United Continental air carriers rose by more than 2.6%. A drop in Oil prices will positively impact the financial health of air carriers as fuel is the main part of their expenses.

 

source : Tickmill Market Commentary

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USD weakens before the FOMC December meeting

 

USD is trying to gain the control back on Thursday after sustaining substantial losses on Wednesday. AUD soared in response to strong employment data which caught investors off guard.

 

Australian Dollar gained 0.82% rising to $0.7333, after the currency hit its 2-weeks low of $0.7169.

 

NZD also showed good dynamics, surging after New Zealand Central Bank cut its interest rates, claiming that further QE measures are not necessary. NZD/USD rose to $0.6872 which is 2 cents higher than the yesterday’s closing price.

 

EUR/USD lost 0.1%, though staying above the important psychological level of 1.10. It is supported by the ECB statement that markets expected more decisive QE policy. Hitting a new local high of $1.1044 the currency maintains its bearish sentiment as the ECB didn’t live up to investors’ expectations, who hoped for more aggressive interventions.

 

USDX dropped to 97.223 level on Wednesday, touching new month’s low.

 

Chinese currency weakened after PBOC has been setting an average Renminbi exchange rate at the lowest level in 4 years for two consecutive days. It indicates that central bank eases control over the currency moving towards the floating rate after the IMF agreed to include Yuan into the basket of reserve currencies.

 

Source : Tickmill Market Commentary

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Sanctions against Russia are about to be extended

 

US Department of Treasury called EU partners to prolong sanctions against Russia, reports Bloomberg.

 

According to the words of Adam J. Szubin the head of OFAC: positive EU decision in extending sanctions will effectively demonstrate to Russian government that there won’t be any progress in restoring economic relations till they stop their aggressive and destabilizing actions against Ukraine.

 

As it was reported earlier on Thursday, EU officials expected that restrictions against Russia will be prolonged, although permanent representatives of the EU countries postponed the consideration of this issue because Italy refused to support the prolongation.

 

EU council will be held on December 17-18th, when the decision regarding Russian sanctions will be possibly made.

 

Russian national currency, Ruble, is likely to respond with a drop in case sanctions are prolonged. Therefore, we recommend traders to keep tabs on the USD/RUB pair.

 

Source : Tickmill Market Commentary

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Ruble entered another wave of devaluation, Oil is in a free fall

 

Ruble attempted to rebound after a considerable loss against USD at the start of the trading session. However, later it failed to keep a momentum breaking the 70 level and currently trading at 70.40. There are no factors that can support Ruble so we expect a further drop to the 71 level.

 

USD is rising comparing to the basket of other majors ahead of the FOMC meeting scheduled for December 15th, where new interest rate decision will be announced. This factor together with falling oil prices places more pressure on the Russian currency.

 

WTI fell by 0.70% and currently hovers around the 35.40 level, USD/RUB can’t resist the negative circumstances, flirting with the 70.70 level.

 

PBOC decided to carry out another wave of national currency devaluation, which raised worries of investors that Chinese economy may perform worse than expected.

 

The certainty that FOMC will raise interest rates on December 17th while US economy doesn’t show guaranteed signs of its upturn and weak EU economy performance forced investors to quit risky assets, as they were supported by the cheap money from the US.

 

Ahead of the FOMC meeting high volatility for Ruble is expected. USD/RUB might trade above the 70 level while Brent is likely be kept within the 37-38 range.

 

Russian CB hasn’t changed its interest rate from 11% on Friday saying that there is not much threat coming from the devaluating Russian currency.

 

Source : Tickmill Market Commentary

 

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Stock markets rally ahead of Fed’s decision while Oil outlook is gloomy

 

Stocks markets are advancing in the wake of upcoming US Interest rate decision today. S&P 500 gained 0.31% to 2042.25 points, Dow is up by 0.27% and about to break the 17600 level.

 

FTSE 100 index seems to be turning upwards after a hard selloff that began on December 2nd, when it dropped from 6,427 to 5,875 points hitting the local low on December 14th. Now it has gained back 2.45% reaching 6,042.5 points.

 

Other EU indices such as Euro Stoxx50, German DAX and French CAC40 rallied by 3% on average. This indicates that a possible Fed’s rate hike is already priced in the markets and rout into USD is over.

 

WTI bulls struggle to gain control after a 10% drop caused by OPEC’s decision to abandon pumping limits. WTI met support at the 34.53 level but bounced to the 37 level. There are news from the US that a 40-year restriction for non-US access to country’s Oil is now removed and this may increase the global Oil surplus and result in a further drop of the commodity price.

 

In its September decision, Fed called off rate hike: weak US economy performance and a threat of Chinese economy hard-landing didn’t give any reason for monetary tightening. After a row of solid labor and consumer data from the US (particularly surprising October NFP figures – 271K versus 180K consensus) and an upturn in Chinese economy, the odds of federal funds rate increase soared to 76%. It’s worth to note that an increase in borrowing costs will affect not only the US but will influence the markets across the world, so considering the economic conditions outside of the US may be of more importance for the Fed when making the decision.

 

Despite many claims that the rate hike is already priced in, positive Fed’s decision may still lead to a surge of USD against other currencies and commodities, especially Oil, Gold, EUR, JPY, as they consist of a substantial speculative capital nominated in USD.

 

We remind our traders that Fed’s decision will be announced today at 8:00 ET (13:00 GMT) and significant volatility is expected. All positions are advised to be revised for proper risk.

 

Source : Tickmill Market Commentary

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Fed lifts up the rate, USD strengthens, US builds up crude inventories

 

Oil prices are falling in the light of increased Fed Funds rate by 0.25% and due to the surprising growth of crude oil inventories in the US. Brent Futures declined by 18 cents and now hover around the 37.21 level, WTI dipped to $35.43 losing 8 cents from yesterday’s close.

 

US Federal Reserve decided to raise interest rate by 0.25% for the first time in almost a decade. The decision was expected by the majority of analysts and market volatility ceased quickly. However it resumed later upon the statement of FOMC head Janet Yellen, saying that a further gradual rate hike is expected in 2016. This had an immediate impact on the USD making the currency go up.

 

EUR/USD responded with a substantial drop below the 1.09 level to 1.0854, Gold followed an almost identical trajectory and decreased by 0.44% to 1,067.49. GBP/USD fell by 0.31%, while USD/JPY appreciated by 0.12%. It becomes evident that USD will keep strengthening, as the four gradual rate hikes in 2016, mentioned by Yellen, will inevitably foster its appreciation against other currencies.

 

On the other hand, US stock market celebrates the rate hike with indices hitting a 1.3% average increase at the closing of yesterday’s session. Dow gained 1.28%, S&P added 1.45%, while hi-tech Nasdaq shares surged by 1.52%.

 

The US continues to fill up oil tanks, adding 4.8M bbl. to the crude inventories. Oil reserves averaged at 490.66M bbl. last week, reports EIA. OPEC countries do not expect any positive changes in Oil prices in 2016 as global oil surplus will be increased by more supplies from Iran.

 

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source : Tickmill Market Commentary

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Fed has increased the interest rates. So what?

FOMC has increased the federal funds rate from 0.25% to 0.50%, exactly as it was predicted. This decision was long awaited by the markets. The reality matched the forecasts and we have not witnessed any significant volatility. We have already heard the talks and promises of the regulator for months, therefore even though it was not beneficial to increase the interest rate in current circumstances, Fed has decided to make this step to support its credibility. But should there have been that many talks about the increase and the increase itself at all?

 

This is quite a rhetoric question. It is quite clear, that if we stayed at the zero levels, there could be some Fed’s assumptions about the economy’s overheating or the possibility of conducting further stimulation. We think, that Federal Reserve is simply acting in advance as the economy has certain time lags which can come into effect a couple of months after the important decisions have been made. And this is a question for FOMC what decisions and effect is expected.

 

Right now Fed has only one problem which they are not discussing out loud, and it is the inflation. It is clear that when Oil is refreshing its multiple-year lows, it is not appropriate to talk about inflation even in the 2% range. Of course, zero interest rates are not normal for the economy and they should be increased. But should it be done under such circumstances? Yes, we can see that Fed is acting. But all these actions are just to show the markets that Fed is in control of the situation and is ready to help. However one thing is clear – this increase does not change anything radically for the American economy. We hope that the next interest rate increase will be based on the real evidence of accelerating inflation. This is what should really be considered when making such important decisions.

 

For today we have only one idea and it is to sell the EU Stocks 50 index. At the daily chart the price has broken the neckline of the double peak and has nicely pulled back to it. Plus, there is a median (dotted line) of the upstream channel:

 

 

Source : Tickmill Market Commentary

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The market is thinner and thinner near Christmas!

 

The EU STOXX 50 index rates have bounced from the broken neck line of the double top. We shall consider buying at point 3 of the ascending channel:

 

Australia 200 Stock Index has returned to the broken ascending channel, forming a bear trap. We’ll try buying with current prices as the market opens:

 

 

On the daily chart for AUD/NZD, in point 3 of the ascending channel, a doji morningstar has formed, so we will attempt to buy with take profit near the descending channel:

 

 

RUB has stuck between 70.00-71.50, which is also the upper side of the big ascending triangle. We shall wait and see, where it makes a break, but for now, everything really depends on the direction of oil movement:

 

 

 

source : Tickmill Market Commentary

 

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[leverager 10]

No chances for Oil bulls: yesterday’s sharp fall and global surplus

 

Oil prices show little fluctuations today on the background of the record high output and a slowing consumption pace.

 

After a sharp plunge by 2.70% at yesterday’s session, Brent futures rose by $0.05 to $36.67 while WTI added $0.05 to $36.86 level as of 5:45 GMT.

 

The demand for hydrocarbons dropped in Europe for the first time in 10 months by 170,000 bbl. daily, comparing to last year. Meanwhile, diesel and gasoline consumption pace in China also slowed its growth, reports JBC Energy.

 

Since Chinese economy is slowing down and growth on emerging markets weakens, it is hard to expect any considerable increase in demand for energy resources. Oil prices will suffer even more in 2016 as there are few factors which can support them. As the US has removed the restrictions on Oil export, companies with lower output costs will attempt to fight for the market share. Analysts say that the difference between WTI and Brent can reach $1.

 

Iran’s Oil Minister Bijan Zangeneh said in his speech that Iranian Oil will enter the market on any conditions even if prices fall below the $30 level. It is likely that the global surplus will persist in 2016.

 

Source : Tickmill Market Commentary

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China PBOC Adopts New Macro-Prudential System To Prevent Risks

 

 

The People's Bank of China said it has introduced a Macro Prudential Assessment (MPA) system in order to more effectively prevent risks and adapt to the growing trend among financial institutions to diversify their assets.

 

The Chinese central bank said the MPA system will replace the previous system that focused on using dynamic deposit reserve ratios and loan quotas to control risks in the banking system. The PBOC said it has changed the regime to "more effectively prevent systematic risks, play a counter-cyclical role and adapt to the trend of asset diversification."

 

The PBOC said the new system is more comprehensive, taking into consideration seven factors, including capital adequacy and leverage, asset/liability ratios, liquidity, pricing, asset quality, exposure to foreign debt and implementation of credit policy.

 

It said the capital adequacy ratio is at the core of the MPA system and that any expansion of assets will have to be controlled with reference to capital adequacy.

 

The central bank said it will closely watch banks' pricing of interest rates to encourage financial institutions improve their pricing and risk management ability as well as to avoid hostile competition, which will be conducive to maintaining a good market competition environment and lower funding costs.

 

The PBOC said it will be shifting to assess a broad range of credit products, including bond investments, equities and other investments instead of only focusing on loan growth as it did before..

 

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[leverager 10]

First Monday of 2016: oil prices rally, touch-and-go assets show decrease

 

The elimination of the prominent Shiah Leader in Saudi Arabia, Al-Nimr, triggered off a collision between Sunni and Shiah Islamic worlds. It also granted a chance for Oil bulls to effectively turn the event in their favor resulting in the commodity gains for two consecutive days. WTI has already soared by 2.08%, with potential to rise even more as Islamic tensions intensify and production quotes may be affected.

 

US Indices started the week with perceptible drop, Dow Jones fell by 0.84% to 17,195.00, while S&P 500 Mini slid by 0.76% to 2,020.00 points. Nikkei index went into nosedive fall losing more than 3% today after China Manufacturing data showed slowdown and market fears increased. European FTSE index also depreciated by 1.18% to 6,125.00 points. Investors are probably worried about Middle East tensions and Asian weak performance so quitting riskier assets may be the wisest decision to wait through the uncertainty at the start of 2016.

 

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European indices are in upbeat mode, while WTI shows no clear trend

 

Today European indices have demonstrated a shift to optimism, appreciating moderately after a sharp tumble in yesterday’s session. Investors are focused on jobless data from Germany, which will be published later today.

 

During European trading this morning, STOXX Euro 50 rose by 0.37% from the previous session close but failed to keep bullish bias and fell later by 0.5%. French CAC 40 lost 0.17% and German DAX 30 gained 0.29%.

 

Stock markets remain feeble after Monday crash in China caused by the release of Caixin report (previous 48.6, actual 48.2, estimate 48.9) showing slowdown of Chinese economy. These are the lowest numbers since September last year and staying below 50 means that the slowdown prevails in China economy rather than upturn.

 

Markets are also turning into a risk-averse mood as geopolitical strains in Persian region are deepening because of Saudi Arabia breaking air communication with Iran and halting some financial operations between the biggest Oil exporters in the area.

 

Oil prices were kept in upbeat mode gaining $1.35 on Monday, but a glut on the market overwhelmed bullish sentiments sending the commodity below 37 again and erasing all gains. WTI grew +0.33% at 36.88 as of 10:30 GMT today. Further action on Oil will be probably set after EIA release on Crude Inventories in the US tomorrow.

 

Source : Tickmill market Commentary

[James I. Hammond 10]

SPY think we'll fill the gap down before any significant pullback let see 201.00

[leverager 10]

Oil hits 11-year low and PBOC lets up Yuan drop

 

Mounting Oil stockpiles around the world shatter hopes for the commodity bidders to see prices picking up in the near future. WTI was sent in a deep 2.45% plunge to $34.92, while Brent sunk to 11-year low point falling below $35.

Traders are riveted to the crude stockpiles report from EIA that is due later today. Experts’ consensus anticipates that the report will show an increase in US oil reserves by 500,000 barrels last week.

 

Today Brent futures extended their Tuesday decline losing more than 7% in two days and hitting rock bottom in the last 11 years. WTI price slumped by 2.45% with gloomy outlook to sink further – near a 30-point level.

 

The Middle East conflict failed to induce sustainable upward movement in Oil prices as global surplus still exceeds shrinking consumption pace.

 

European equities are trading in the red zone today as Asian stocks fell after PBOC loosened Yuan rate to US Dollar, what resulted in over a 2% depreciation of Chinese currency to its US rival. FTSE 100 is down 1.51%, S&P 500 lost 1.57% and DJIA fell by 1.46%.

 

Russian currency is following the sinking Oil in a rapid decline against its American peer. USD/RUB broke 74 level today with potential for further bullish movement.

 

 

Source : Tickmill Market Commentary

[leverager 10]

US Payrolls: Quick Take - CIBC

The following is a quick take on today's US jobs report as provided by CIBC World Markets.

 

We may be moving into 2016 but the general theme of strong job gains but still tame wage pressures remains. Payrolls were well ahead of consensus expectations at 292K in December, with a net upward revision of 50K to the previous two months. Construction and service sector hiring once again drove the increase in payrolls.

 

However, despite the continued sharp intake of jobs, wage inflation remains largely subdued. The annual rate of average earnings may have accelerated to 2.5%, from 2.3% in the prior month, however that was largely due to favourable base effects rather than any real strength in the current month. Indeed, wages were flat on the month in December. And with less favourable base effects in January, the y/y rate is likely to move down to around 2¼% next time.

 

The strength of the job gains should keep the Fed on track for one more hike in interest rates in March should financial market volatility subside, but signs of inflation picking up will likely be needed to convince more dovish members to support further hikes beyond that. Elsewhere in the report the unemployment rate was unchanged at 5.0%, and the wider U6 measure was also unchanged at 9.9%.

 

Source : EFXNews

 

 

 

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[leverager 10]

WTI weighs anchor as CFTC shows significant cut in bullish bets

 

Stock markets in Asia are extending their diving ahead of important economic releases in the region and Tokyo Exchange is closed on holiday today.

 

The S&P index is down 1.95%, ASX 200 shows the same drop and the main indicator of Chinese economic health – Shanghai Composite – extends last week’s losses by 0.93%.

 

Investors are keeping tabs on fuel tensions in the Middle East expecting another spin in the collision between Saudi Arabia and its allies and Iran. Another point of focus is official economic statements from China, which actions (as was proven last week) can deliver serious distress to local and world stock markets.

 

This week, investors expect the release of China Trade Balance (Wednesday), which will indicate the pace Chinese economy recovers with and give clues on further monetary policy of Chinese authorities.

 

Important economic data from the US to be released this week might also be worth looking at, especially the US Retail Sales (Friday), Manufacturing Prices and Consumer Sentiments. On Thursday, a protocol of BoE meeting will be published, so volatility for GBP is expected.

 

WTI resumed decrease in Asian session and is likely to ripple over next trading sessions. Economic growth in China shows no substantial signs of upturn and Hedge Funds exit from their bullish bets on Oil cutting them to 5-year low (-50,000 contracts) according to CTFC report. The prices depressed by 2.5% extending last week’s significant 10% loss finding daily low at 32.26 and then bouncing to 32.35 as of 07:42 GMT today.

 

Source : Tickmill Market Commentary

[David B. Runyan 10]

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