Market Moving Fundamental News

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Oil prices burst a $31 level, while ShComp shows moderate gains

 

Oil prices keep their ordinary bearish routine breaking the last barricade of $31/bbl. before reaching an important $30 level. WTI plunged as low as $30.41 currently hovering in a range of $30.50 – $30.60. In only 10 days, the commodity lost about 20% and rock bottom seems not somewhere near current levels, analysts say.

 

Brent futures also crashed to a $30.62 level, which it the lowest since April 2004.

 

According to the latest CFTC report, the disparity between bearish and bullish bets on the commodity increased to 5-year high with bearish bets prevailing. Major world banks like Barclays, Macquarie, Bank of America Merrill Lynch, Standard Chartered and Society Generale reduced forecast on Oil price in 2016.

 

In 2016, Barclays expects an average WTI price at the level of 37$/bbl. comparing to the last forecast of $56$/bbl. Standard Chartered released the most pessimistic outlook: according to its analysts, the prices may drop to $10/bbl.

 

The US indices are still depressed with no signs for upturn as the performance of Chinese economy is insufficient and low Oil prices pull the US Oil and pipeline companies down: DJIA -0.17%, S&P 500 -0.16%, FTSE 100 +0.36%.

 

Chinese index Shanghai Composite is in a moderate gain today (+0.2%) as Chinese government managed to maintain Yuan exchange rate ramping up interventions.

 

Source : Tickmill Market Commentary

[David B. Runyan 10]

Oil Hits Low Of $29.93, Saudi Riyal Hits Record Low In Forwards Market

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EUR/USD and a few words about inflation

 

Last year, the Fed rose interest rates. The hike was very insignificant at best. Now, the market has another question: will the rates be increased in 2016 and how fast?

 

Despite having some success on the labor market, there is nothing good to say about inflation. Below you can find a line graph with two lines: blue is inflation level in the US, yellow is CRB commodity index. The latter shows the overall trend within the commodity block:

 

 

It is clear from the graph that the inflation is closely correlated with the commodity index. Also, you can see that the CRB index is way ahead of inflation. In layman’s terms, it means that as commodity markets suffer a decline, inflation is sure to follow shortly after and vice versa.

 

Now however, we see a steady decline of the commodity market, which may result in further decrease of inflation in the US or so called ‘standstill’. In this situation, it is pointless to wait for desired inflation rate of 2%.

 

On the other hand, interest rates are usually increased as inflation grows and vice versa. Now the Fed is faced with a simple question: will the rates continue increasing with such low inflation? Maybe the rate increase in 2015 was just a gesture of good will? A signal to the markets that the Fed does not sleep? Moreover, was there a desire to tighten the monetary policy in the first place?

 

As of today, we can draw just one conclusion for certain – as long as commodity markets do not grow, we will not see inflation at desired levels. We will not see a steady rate increase either. The Fed observes the market and waits. Thus, we shall wait as well!

 

Now, let’s review the situation with currency pairs.

 

USD/RUB

 

The Russian ruble has broken the key resistance level of 71.50, so now we wait for the pair to grow up to 79.50. The rapid growth of oil market can ruin our plans there, although there are no prerequisites for the restoration of ‘black gold’ yet:

 

 

GOLD

 

We will sell gold near the breached ascending channel at the newly formed reverse candlestick signals:

 

 

EUR/USD

 

We can see a potential bullish flag forming with the Euro – the long white candle (flagpole) and a nice flag. If the flag gets broken, we shall buy the Euro on rollback with our take profit at 1.1450 (height of the flagpole):

 

By the way, according to the latest data from COT CFTC, the operators are up to their ears in buying the Euro, while other market participants have short positions open with EUR/USD. The current disposition indicates that the Euro continues its movement:

 

If we look at the weekly chart, the last candle had closed with a hammer, which pressed against the level of 1.0820 and potentially points to growth of the Euro:

 

 

Source : Tickmill Market Commentary

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Iran’s comeback makes Brent cheaper than WTI

 

Oil prices went into yet another plunge to 12-years lows as market expects a supply boost from Iran which is sanction-free now.

 

By 05:55 GMT Brent Futures declined by $0.12 to $30.19/bbl. while WTI futures rose slightly by $0.31 to $30.79. Earlier on Thursday the ICE benchmark plunged to the lowest point of $29.73 since February 2004.

 

American benchmark is now more expensive than Brent. This indicates that there are serious concerns about Iran’s comeback to the Oil market with boosted supply. When this happens, the price margin between the two benchmarks might become even wider.

 

Gloomy sentiments also deepen with EIA data released yesterday, showing that US gained gasoline reserves by 8.4M barrels and distillate reserves by 6.1M barrels.

 

It is now obvious that the $30 level doesn’t seem so stable. The movement around the $30-31 level for the last several days without any signs of upturn indicates that bears are consolidating their forces to make a breakout of a psychologically important level and then heading towards the $25 and then even the $20 levels.

 

US Stocks extend losses from last week on risk-averse sentiments spurred among investors: DJIA -2.21%, S&P500 -2.50%. European index FTSE100 suffered around 1% loss today.

 

Source : Tickmill Market Commentary

 

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$30 level seems to be broken: WTI heads towards $25

Oil prices fell below $30 on Friday after a 2% surge on Thursday as investors expect that supply of Iranian Oil to the world market will further worsen the surplus.

 

WTI refreshed its local lows plunging as low as the $29.66 level, making this the third consecutive week of a steady decline. The price has already dropped by almost 20% from the start of 2016.

 

Iran Oil Minister Bijan Zangeneh said earlier that Oil supplies from Iran will be resumed under any market conditions. With current acute political tensions between Iran and Saudi Arabia, Oil market is likely to become another arena for confrontation.

 

With prices dropping below the $30 level, tearing important psychological barrier, it is likely that any substantial resistance will be offered only at the $25 and $20 levels.

 

Source : Tickmill Market Commentary

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Oil plunges on fears of the U.S. stockpiles increase

 

 

The pressure on Oil increases ahead of EIA data set to be released today. The consensus suggests that U.S. Crude Stockpiles grew last week by 2.7M bbl., increasing the surplus. WTI futures fell by 3.2% to 27.55, breaking the $28 level at ease, while Brent prices dropped by 2% to $28.16.

 

Market remains clueless regarding the pace at which Iran is planning to return to its pre-sanctions supply levels. This uncertainty creates a possibility for Oil to fall further.

 

Asian indices are dragged down with bearish sentiments on the Oil market. Chinese index ShComp is down by 1.07%, Nikkei 225 decisively entered the red zone with a 3.71% loss today.

 

Meanwhile the U.S. Treasury department has reported on Tuesday that the buy-out of U.S. treasuries had been resumed in November after a sell-off in October, which is the first time in nine months.

 

Risk apprehensions have increased on the impact of series of rate hikes to be done this year so the size of buy-out concluded $31.4B in November comparing to $17.7B of sold bonds in October. Raw data suggested that the amount of bonds sold in October averaged $16.6B.

 

The majority of Treasury Bills (around $36.3B) went in private hands, comparing to the sale of $36.7B in October. Foreign governments, international and local organizations purchased only $2.02B of the U.S. government bonds after a panic sell-off of $18.4B in October.

 

According to the recent data, China holds the biggest part of the U.S. debt: around $1.264T, which is the highest from August 2015.

 

The second largest lender is Japan with $1.145T of U.S. Treasuries on hands. Foreign central banks have controlled about $6.126T of the U.S. debt in November, comparing to $6.048T in October.

 

Source : Tickmill Market Commentary

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WTI hits $32.74, Asian stocks rally on ECB’s March QE promise

 

Oil futures have rebound from the 12-year low during the Monday session. The cold snap in the U.S. and a substantial cut in bearish positions have both worked as an upward propeller for the prices. Texas benchmark jumped by 1.40% to $32.64, running out of steam at this point and changing direction to downward. Brent futures hiked sharply to $32.67, narrowing the margin with its U.S. peer.

 

Consumption of fuel in the U.S. may increase significantly this week as low temperatures across the states will force the country to retreat from its price war for some time and focus on heating issues.

 

Last CFTC report showed that bears camp has shrunk by 8.4% from 200,975 to 184,193 positions. Long positions were reduced by only 4,580 to 266,150. This shift may reflect the apprehensions of non-commercials that dovish rhetorics on stimulus bets will boost the markets. It can mean a U-turn for Oil, as according to analysts the $26.55 level that WTI touched this year can be considered as a fair bottom.

 

Asian markets were encouraged by stimulus cues from Draghi’s speech and keep up the rally that started last week. Nikkei 225 climbed to 17,110.91 (+0.90%), Topix gained 1.34% to 1,392.63, Hang Seng advanced by 1.40%. Chinese indices CSI300 and ShComp gained 0.5% and 0.75% respectively with QE attempts by Chinese authorities bringing back Yuan’s depreciation against

 

Source : Tickmill market commentary

[Edward J. Webb 10]

$BAC my monitor must be broken. This is not possible. Bac is green!

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FOMC left the rate unchanged, WTI responds with a hike

A decision on federal funds rate was supposed to be taken at yesterday’s FOMC meeting, which was held on a cautious note. The liftoff was postponed as expected. Committee officials are pointing out a need for a more gradual monetary schedule as the tightening access to liquidity may further arrest the recovery of the world’s economy.

 

The decision has sent the U.S. stocks in the red zone with Dow Jones dropping by 1.38% (222.77 points) at the session’s closing. S&P declined by 20.68 points (1.09%) to 1882.95. Nasdaq Composite suffered the most tumbling by (2.18%) to 4468.17 points with gloomy corporate data from the Silicon Valley. Apple reported that after a 12% drop in revenue in Q4 2015 the growth in sales averaged at 4% in Q1 2016. YoY growth averages only at 2% which raises concerns over further demand for Apple products. Company stocks slid by 6.57% to 93.42 on these news.

 

Mixed data released yesterday made WTI grow by 3%. However, this was the first time from December when crude’s rally had no positive impact on stock markets. Russian Ministry of Energy reported that they consider an option to cooperate regarding output levels with OPEC members. Meanwhile Saudi Oil Minister Al-Naimi said that the global supply may exceed the demand by 2M barrels daily and market will probably need time to ease the glut and return prices to reasonable levels.

 

EIA report posted yesterday showed that despite the cold season and the U.S. companies’ dumping price wars, crude inventories rose by 8.4M barrels almost by two times exceeding the estimate of only 3.3M barrels increase. Today’s session started with Crude dropping by 1.19%, currently hovering near the $32 level.

 

Source : Tickmill Market Commentary

[Edward J. Webb 10]

The E. coli outbreak that affected dozens of Chipotle customers in nine states last year is expected to be declared over as soon as Monday, WSJ reports. Although it's been more than two months since any new illnesses have been reported, investigators still haven't been able to pinpoint the ingredient responsible for the contamination. Chipotle is also planning to start an advertising and social-media campaign soon to woo back its most loyal customers.

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USD, EUR, JPY, CHF, CAD, AUD, NZD: Weekly Outlook - Morgan Stanley

 

USD: Buy vs. the Funders. Bullish.

 

We expect some further legs in the current risk rally, which should keep the USD supported against the funders – EUR, JPY and CHF. Economic data out of the United States have been solid over the last week, with indicators of the labor market, domestic demand, and manufacturing all showing signs of resilience. However, with the Fed likely to remain on the sidelines for now after the sharp tightening of financial conditions to start the year, USD should in the near term lose ground against high yield FX.

 

EUR: Selling EURUSD. Bearish.

 

We remain short EUR on both a tactical and structural horizon. Near term, the risk rally that we have been calling for is likely to pressure EUR lower, given that the common currency has evolved as the globe’s funding currency of choice. Medium term, the EUR should remain one of the weaker G10 currencies, given expectations for more aggressive policy easing from the ECB next month.

 

]JPY: Tactical Bearishness. Bearish.

 

The asset outlook is key to determining the direction of the JPY. Indeed, with domestic stocks falling sharply post BoJ easing, Japanese investors needed to quickly scale back risk exposure. The easiest and most liquid way to perform such an operation is through the FX markets, hedging foreign exposure. As such, with risk markets recovering, this should limit the scale of foreign hedging. We are tactically bearish the JPY, looking for 116 in USDJPY in the coming weeks.

 

CHF: Still Buying USDCHF. Bearish.

 

Upside momentum is here for USDCHF and we target 1.03. The risk on environment should continue to support CHF weakness as Swiss investors look for stronger returns abroad. The local investment outlook remains and yield differentials still support investment outside of Switzerland. Our outlook changes if the European banking sector worries start again as this may prompt repatriation back to CHF.

 

 

CAD: A Temporary Respite. Neutral.

 

We believe that CAD may see a temporary respite in an environment of a more cautious Fed and preliminary signs of strength in the non-resources sector. However, our medium-term narrative remains unchanged. The great rotation that the BoC has been hoping for is still questionable. Moreover, the Business Outlook Survey showed the weakest hiring and investment intentions since the crisis.

 

AUD: Picking Up Carry. Bullish.

 

The Chinese authorities have brought back a period of calm, keeping the USDCNY fix stable over the past week. Coupled with liquidity injections ahead of the Lunar New Year, this dampening of volatility is likely to temporarily support carry trades. This week’s private capital expenditures report will be one of the most important data points to watch. Specifically, the ABS will be reporting a first look into firms’ capex intentions for the 2016-17 fiscal year – this is the number to focus on.

 

NZD: Weak Inflation Expectations. Neutral.

 

The divergence between rising iron ore prices and falling milk prices supports a higher AUDNZD. Inflation expectations have fallen to a low since 1994, supporting further RBNZ easing. The risk rally may however support NZDUSD further this week making trades for short NZD on the crosses more attractive. Longer term we are bearish on NZDUSD as suppressed milk prices reduces the incomes of farmers.

 

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Chinese PMI shows economy slowdown, Oil rallies

 

Oil futures surge at the start of the London trading session on Tuesday, amid the steady flow of news: Oil output in the US is decreasing, OPEC talks on output freeze and pessimistic manufacturing data from China.

 

WTI futures for April rallied by 1.48% to $34.25 as of 07:25 GMT, Brent gained 1.09%, reaching $37.00 level. The upsurge is caused by reports from the US that Oil output declined in December for 3rd consecutive month by 43 000 barrels to its lowest pace of 9.26M barrels daily, according to the official data from the US Energy Department. In 2015, Oil output in the US had been rising to 9.43M per day, later taking downturn, as tumbling prices have made it highly unprofitable for the US firms to maintain high pumping levels.

 

The output in the OPEC cartel decline by 280,000, to 32.37M barrels daily, according to Reuters.

 

Discouraging manufacturing data from China pulls down the energy market, as it signals the Oil consumption will continue to fall. The February Manufacturing PMI (Purchasing Managers Index) released today, showed that industrial activity in China shrunk to 49.0 points, 0.3 points lower than 49.3 median estimate, down 0.4 points from January’s reading. Non-Manufacturing PMI declined from 53.5 to 52.7 points. However, analysts say that the freeze pact between OPEC, Russia and Iran won’t yield the desirable results, as glut on the Oil market will persist. Current global surplus averages 1M barrels daily.

 

The main obstacle for reaching an agreement on the output limits between Saudi Arabia and Russia is a clash of views on the Syrian conflict. In order to discuss the output limits, participation of Iran and Iraq is required, which can be difficult, with Iran’s aggressive export policy.

 

Asian indices rose, as risk concerns eased, Nikkei 225 added 0.37%, Topix index gained 0.23%, Hang Seng grew by 1.29%, CSI 300 added 1.85%. Yen fell against the Us Dollar by 0.22%.

 

European indices show moderate gains, thanks to an increase in Oil prices, FTSE 100 hovers near the yesterday’s closing price of 6,097.09, Euro Stoxx 50 gained 0.57%, CAC 40 added 0.90%, IBEX 35 index added 1.34%.

 

The US Dollar falls against the GBP and Australian Dollar, as Brexit risks wear off. The Australian currency rose because of the upturn the commodity market, GBP/USD gained 0.43%, AUD/USD added 0.62%.

 

USD/RUB drops below 74 level, first time since the start of January, as rallying Oil supports the Russian currency.

 

By : Arthur Idiatulin

Source : Tickmill Blog

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Now is the right time to buy AUS200

 

AUS200

 

AUS200 has formed a dodji and a mallet, which have pressed against the ascending channel and the broken symmetrical triangle. We will be buying this asset at current prices:

 

GBP/USD

 

The GBP has formed a shooting star at point 3 of the daily descending channel:

 

 

The price has also pressed against the 1.4435 level, so as the daily candle closes with a shooting star, we shall sell the pair at current prices. As an alternative, we can put a pending order from the middle of the shooting star:

 

 

Source : Blog.Tickmill : Now is the right time to buy AUS200

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Commodity rout deepends, Russia increases Oil production

 

 

Traders and investors are massively dashing their bids on crude as rumors and expectations can not anymore underpin the market. Saudi Arabia ruined the hopes for fundamental improvements after prince Mohammed Al-Saud hit the wires in Friday saying current disunity between Iran and other Oil producing nations makes it impossible to freeze output. The news left energy market without footing, sparking off volatility and sending prices down 4 percents in Friday. The drop deepened in Monday, WTI lost 2.88 percents, Brent tumbled 2.48 percents.

Now markets don’t expect anything positive from Doha talks which will be held on 17 April. Iran Oil Minister Bijan Zanganeh said he’ll attend meeting in Doha if he “finds time” meaning country will stand its ground on production freeze matter. The country already has boosted output over 2M barrels with 250K growth in March comparing to February production pace. The efforts of Russia and Saudi Arabia to stabilize market by freezing output on January levels he called a “positive step” which should help to balance prices.

Some analysts was repeatedly warning that rally is not fundamentally supported and markets will inevitably fall into retracement after it. Current decline could be a correction to fundamentally grounded levels which are, considering a drop in US production, should be somewhere $35.

Meanwhile Russia continue to add efforts in a fight for market share, producing 10,912M barrels in March which is 0.3% more than in February. Its the biggest output level not seen from 1987 year (11,5M barrels).

Baker Hughes weekly report showed 10 Oil wells were stopped in US last week, with total 362 rigs operating. US continues to cut down production capacities increasing imports of cheap Oil EIA report showed last week.

Tomorrow crude market will be waiting for API data which will show the change in US Crude inventories. Further growth of crude reserves will worsen oversupply concerns and probably pave the downward way for Oil prices.

To the other news.

US Dollar decline resumes in Monday as traders shrug off after strong NFP release. EUR/USD gains 0.11%, GBP/USD +0.40%, USD/CHF +0.05%. AUD/USD drops 0.92% due to rout on commodity markets, USD/JPY -0.44% as Yen rallies on increasing risk concerns. USD/RUB rallies 1.37% though there are too many ruble bidders trying to wait through the Oil pullback. Withdrawal from ruble support may cause abrupt spike of the pair above 70 level.

 

 

Source : Brokerarena.com

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March industrial production in the US fell more than expected, battering the optimism about the health of the US economy, official data showed on Friday.

 

The Fed report showed that in the past month, the volume of industrial production decreased by 0.6% with a seasonal adjustments, more than the expected drop of 0.1%.

 

In February, industrial production fell by 0.6%, the figure was revised down from a preliminary estimate of 0.5%.

 

Processing industries production decreased 0.3% last month with taking into account seasonal adjustments, missing forecasts for growth of 0.1%, after declining by 0.1% in February, the figure was revised down from the initial estimate of growth at 0,1%.

 

The report also showed that the capacity utilization rate fell to 74.8% in March, compared with 75.3% a month earlier. The February figure was revised down from the original estimate of 76.7%.

 

Analysts had expected a smaller decline to 75.4%.

 

The EUR/USD was trading at 1.1282, up from 1.1273 in anticipation of the release of the data, the pair GBP/USD was trading at 1.4174, up from 1.4155, while the pair USD/JPY was trading at 108.90, bounced from 108.84 support earlier in the session.

 

USD index, which shows the value of the US dollar against a basket of major currencies, was held at 94.79, down from 94.86 the day before the report.

 

Futures on US stock indexes pointed to a lower Wall Street opening. Futures on the Dow fell 0.10%, futures on the S & P 500 fell by 0.16%, while the Nasdaq 100 futures fell 0.24%.

 

On the commodities market, gold futures were trading at $ 1230.70 an ounce, compared with $ 1233.00 before the release of the data, while crude oil futures were trading at $ 40.51 per barrel, up from $ 40.38.

 

The greenback weakened in Friday against its major peers due to falling oil prices ahead of a meeting of producer countries in Doha, as well as the weak data on consumer sentiment in the US which have reduced risk appetite, causing investors to buy safe currencies such as the Japanese yen .

 

The dollar index, which tracks the value of US currency against a basket of six major rivals, unwind gains after the growth over the past two days. The decrease of US currency against the yen on Friday was the largest one-day decline in more than a week.

 

“Perhaps there is some concern about the Doha negotiations”, – said a senior currency strategist at Scotiabank in Toronto Sean Osborne.

 

Producers of oil, led by Saudi Arabia and Russia are scheduled to meet in the Qatari capital on Sunday, April 17 to discuss the freeze of production close to current levels and solve the problem of oversupply on world markets.

 

 

Source : BrokerArena

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Kuwait boosts output back to 2.9M bbl, BoJ wants to extend QE

 

 

Kuwait has restored oil production to 2.9 million barrels a few days after the stoppage of oilmen was settled, reports Saudi business newspaper “Al-Iktisadiya”.

 

Production of crude fell in Kuwait from 3 million b / d before the strike began last Sunday to 1.6-1.8 (according to various sources) b / d on Wednesday, when it was suddenly halted.

The country is currently refining 830 thousand B / d compared to 930 thousand B / d In the period preceding the action of the workers.

 

The newspaper reports that the leaders of oil and petrochemical industry trade unions are back for negotiations with authorities of the country to discuss reservation of privileges and benefits for oil workers in the country’s overhauled payroll system.

 

Modernization of the payroll system, according to the country’s leadership, would make it possible to create more equitable working conditions and reduce public costs.

 

The newspaper writes that the Kuwaiti leadership stood pat in the negotiations with trade unions, saying that it won’t meet the strikers’ demands “under pressure”.Unions did not achieve its goals, the negotiations began in fact “from a scratch”, and observers do not rule out compromise solutions, provided no industrial actions are launched during the dialogue.

 

China’s stock market rose in Friday session due to the pick-up of consumer and technology sectors, offsetting declines in commodity companies, but major indices showed the biggest weekly drop in three months.

 

Reacting to initial losses, “blue chips” index CSI300, which tracks the value of securities of the largest companies traded in Shanghai and Shenzhen, rose 0.5 percent to 3.174,90 points by the end of the session. The index of the Shanghai Stock Exchange Shanghai Composite added 0.2 percent and closed trading at around 2.959,24 points.

 

Last week the CSI300 fell by 3 per cent, while the SSEC lost 3.9 percent, showing the worst result since the end of week of January. The index, which tracks the shares of the commodity sector, fell 2.7 percent on Friday after the shares of steel companies, gold and copper producers.

 

Hong Kong stock market closed Friday in the red, responding to yesterday’s decline in the US stock market for the first time in four sessions due to disappointing quarterly results of US “blue chips”. The index of the Hong Kong Stock Exchange Hang Seng fell 0.7 percent to 21.467,04 points. Index of Chinese companies traded in Hong Kong, lost 1.4 percent, closing at 9.120,91 points.Week Hang Seng rose 0.7 percent, and HSCI dropped 1 percent.

 

The Bank of Japan, which introduced a negative interest rate in January 2016 on deposits of financial companies in the Central Bank, is considering the possibility of supporting the banks by providing them with loans at a negative rate, reports Bloomberg, citing informed sources.

 

According to the sources, this step can be taken simultaneously with a significant reduction in central bank interest rates on deposits in the Central Bank, which now stands at minus 0.1% per annum.

 

It is most likely that the loans at a negative rate will be issued under the program known as Stimulating Bank Lending Facility, the sources noted. Currently, banks receive loans under the program under the zero rate.

 

Experts believe that the addition of such a tool in the arsenal of the Bank of Japan will reflect positively on the national economy. At the same time, banks have already suffered from the introduction of negative rates, may be faced with the requirements of the borrowers to reduce the markup to the agreed interest rates on loans, the sources noted.

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US indices closed the week with declines, Amazon surprises investors with earnings report.

 

 

The US stock market closed trading in Friday with declines amid negative dynamics in the health care sector, technology and finance.

Dow Jones fell by 0,32% at the close, S&P 500 index dropped 0,51%, NASDAQ Composite Index fell 0.62%.

 

The leaders of growth among the Dow Jones index components in Friday were the shares of Home Depot Inc., which rose 0.87%, closing at 133.89. Stocks of the Travelers Companies Inc rose 0.68%, ending trading at 109.90. Shares of Nike Inc rose 0.68%, closing at 58.94.

Worst performers were the shares of Wal-Mart Stores Inc., which price fell 2.96%, ending the session at around 66.87. In technology sector the shares of Intel Corporation rose 2.67% to 30.28, Cisco Systems gave way by 1. 68% and finished trading at around 27.49.

 

The S&P 500 top performers at the end of Friday trading were the shares of Monster Beverage 1990 Corp, which rose by 12.81% to 144,22, Freeport-McMoran Copper & Gold Inc, which scored 10.76%, to 14.00, and shares of Amazon.com Inc, which rose by 9.57%, ending the session at around 659.59 after a release better-than-expected corporate earning reports, with cloud services as a main driver for growth.

 

 

 

Leaders of falling were shares of Stericycle Inc., which fell in price by 21.50% to 95.56. Shares of Seagate Technology PLC lost 19.07% and closed the session at 21.77. Shares of Western Digital Corporation decreased by 11.28% to 40.87.

The leaders of growth among the NASDAQ Composite index components were the shares of Globus Maritime Ltd, which rose by 200.00% to the level of 1,2900, Paragon Shipping Inc, who scored 50.86 % to 2.6400, as well as shares of KBS Fashion Group Ltd, which rose by 30.42% and closed the session at around 0.4043.

Leaders of falling were the shares of Park-Ohio Holdings Corp, which fell in price by 36.42% to close at 25.45. Shares of the company Golar LNG Limited lost 23.24% and closed the session at 16.58. Quotes Stericycle Inc decreased in price by 21.50% to 95.56.

Volatility Index also know as CBOE Volatility Index, which is based on options trading indicators on the S&P 500 rose by 4.14% reaching 15.85 points.

Gold futures for June delivery added 2.39%, or 30.25, reaching $ 1.296,65 for troy ounce. As for other commodities, the price of oil WTI with delivery fell by 0.11% in June, or 0.05, to $ 45.98 a barrel. Brent crude oil futures for July delivery fell 0.82%, or 0.39, to $ 47.38 a barrel.

Meanwhile, in the Forex market EUR/USD pair rose by 0.86% to 1.1450, and the quotation USD / JPY fell 1.57%, reaching 106.41.

USD index dropped by 0.76% to 93.02.

 

Source : BrokerArena

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Oil prices recede on boost of production from OPEC, Draghi speech is in focus

 

 

Oil prices are falling on Monday, because the monthly increase in output in the Organization of Petroleum Exporting Countries offset the drop in US production and the recent weakening of the dollar, which were main propeller for recent growth of the prices.

 

WTI crude for delivery in June traded on the New York Mercantile Exchange fell 39 cents or 0.81% to $45.55/barrel

.

Brent crude, traded at ICE exchange in London fell 1.27%, to $46.79.

 

OPEC oil production in April rose to record highs in recent history a Reuters poll showed on Friday, as the increase in production in Iran and Iraq offset strike in Kuwait and other delays in deliveries.

 

According to the survey the April OPEC production rose to 32.64 million barrels/day from 32.47 million barrels/day the previous month, reinforcing concerns about oversupply in the global energy markets.

 

Trading volumes remained fragile due to the celebration of May Day in many countries.

Oil has risen more than 75% from 12-year lows in January amid signs that low prices are beginning to resist the growth of output due to high production costs, resulting in ease of the glut.

 

On Sunday, the head of the International Energy Agency, Fatih Birol said that oil prices may have bottomed out, provided that the global economy will keep the current momentum of development.

 

US Energy Secretary Ernest Moniz said Monday that it expects to restore the balance of supply and demand of oil in the world market for about a year.

This year, oil production in the US could drop by 600,000 barrels per day on an annual basis, as producers respond to lower prices, said Moniz.

 

European stock indexes show mixed performance as the markets are still under the influence of the Bank of Japan’s decision to leave its monetary policy unchanged, while today investors awaited speech European Central Bank President Mario Draghi.

 

During European morning trade, EURO STOXX 50 fell 0.25%, France’s CAC 40 rose 0.18%, while Germany’s DAX 30 added 0.44%.

 

Markets still fluctuate after last Thursday, the Bank of Japan decided to leave its monetary policy unchanged, contrary to market expectations, preparing for additional mitigation.

The decision was made the next day after the Federal Reserve on Wednesday left interest rates unchanged near zero and almost did not give hints on future hikes.

 

 

Source : Oil prices recede on boost of production from OPEC, Draghi speech is in focus

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Iran reaches pre-sanctions level of production, Canada outage in supply boost oil prices

 

Oil production in Iran will reach 3.8 million barrels per day over the next few days said to Bloomberg Roknoddin Javadi, deputy oil minister and managing director of state-owned National Iranian Oil Company. It is obvious that Iran’s intention to return to pre-sanctions levels of oil production at a rate of about 4 million barrels per day remain quite serious.

 

After regaining market share, which the country controlled before the introduction of international sanctions, Iran is ready to discuss joint actions in the oil market with other OPEC members added Rokneddin Javadi. As reported by Bloomberg, Iran may join OPEC quota in one or two months after increasing output to pre-sanctions level of oil production and exports.

 

In April Iran exported an average of 2.1 million barrels of oil per day the deputy minister noted.

Crude futures of Brent and WTI sorts are trading in positive territory on the background of disruption in oil supplies due to forest fires in Canada and the escalation of military clashes in Libya but is moved away from session highs.

The boost of production in Iran is a matter for worries for one of its major export competitors in the Middle East – Saudi Arabia. As it became known yesterday crude output in Saudi Arabia has already reached 10.15 million barrels per day.

 

The fire which led to the evacuation of all 88,000 dwellers of the oil center – Fort McMurray in Canada and destroyed 1,600 buildings, now threatens local airport and southern part of the city, officials said on Wednesday.

Some areas of the city in the southeast of Alberta, in the heart of Canada’s oil sands region, already lay in ruins.

As we move to the south of the fire, authorities announced a mandatory evacuation of the settlements, located 50 kilometers south of Fort McMurray.

 

According to officials, there is no victims of the calamity, but it is known of at least one car accident in the course of the evacuation.

A huge cloud of black smoke can be seen at a distance of more than 60 kilometers from the city, the fire can not stop the fire.

“We may lose a significant part of the city”, – said Scott Long, a spokesman for Emergency Management Agency Alberta.

The main oil facilities are located outside the fire spread, however, companies are trying to help and evacuate employees and protect conduits, which led to a cut in production.

 

Premier of Alberta Rachel Notley said that

 

Read More : Iran reaches pre-sanctions level of production, Canada outage in supply boost oil prices

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Yen drops on intervention rumors, Dollar surges as Fed Dudley is optimistic on Rate hikes

 

 

Japanese yen dropped to a two weeks low against the dollar on Monday after Japan’s Finance Minister warned that Tokyo is ready to intervene in the foreign exchange market if necessary.

 

USD/JPY hit 108.38, highest level from April 28, and swayed around near 108.20 during Monday session, up 1.03% for the day. Last week, the dollar fell to 105.05 level, 18-month low against the Japanese Yen .

 

The USD index, which tracks the US currency against the changes of trade-weighted basket of six major currencies, rose by 0.14 percent to 93.96, bouncing off from lows Friday of 93.00 floor.

 

The Finance Minister Taro Aso hit the wires on Monday saying that Tokyo was ready to intervene in the foreign exchange market, if excessive strengthening of Yen will affect trade statistics and economic indicators of the country.

 

Though, most traders still don’t expect monetary measures by Japanese authorities towards weakening of the yen.

 

At the end of last month the Treasury United States added Japan to the list of countries which are monitored for the policy of adjusting foreign exchange rates. It means that United States are worried about current monetary stance of BoJ and Japanese government, which lack of action or overly interventions may create problems on foreign exchange market.

 

In his report, the Minister of Finance noted that the current market of US Dollar – Japanese Yen is “well regulated ” and reiterated that all countries should abide by the commitments of the G20 and G7 on exchange rate policies. Markets saw in this statement a call for limiting currency intervention on the part of Japans government.

 

The yen strengthened after the outcome of the April meeting on determining monetary policy, where Bank of Japan refrained from implementing fresh quantitative easing, contrary to market expectations.

 

The strengthening of yen threatens the goals of BoJ to stimulate prices growth.

 

A demand for US dollar also rose after the head of Fed Reserve Bank in New York William Dudley said in Friday that it is reasonable to expect two more rate hikes this year, despite data showing that the growth in the number of new jobs in the United States in April was the lowest in the past seven months.

 

The yen also fell sharply against the euro, the EUR/JPY pair rose 1.05 percent to 123.43.

 

The single currency hardly changed against the dollar, the EUR/USD traded near key 1.14 level. Risk sentiments among EU investors and analysts have improved slightly in May, data showed on Monday, but worries about the prospects of the world economy continue to mount pressure.

 

Investor confidence index grew 1.2% from 5.7 to 6.2 in April, beating expectations of the growth to 6.1.

 

A separate account showed that in March the volume of orders in German industry rose more than forecast, at 1.9%, showing the largest increase since June due to high international demand.

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Gold retreat from bounce, Oil prices surge on upbeat EIA and supply outage in Nigeria

 

Oil prices rose on Wednesday amid the return of worries about supply outages as Shell announced the closing of a key pipeline in Nigeria.

 

Brent futures strengthened 4 percents to $ 47.34 per barrel, WTI futures rose 3.45 percent to $ 46.20 per barrel.

 

Shell Petroleum Development Co., a unit of Royal Dutch Shell in Nigeria, announced force majeure associated with Bonny Light oil exports, after the closure of the pipeline Nembe Creek Trunk line (NCTL) for repairs.

 

In this regard, the country‘s oil production could fall to a minimum of more than twenty years.

 

News from Nigeria have changed the trend of oil price which declined earlier in the session, as the production in Canadian oil sands region started to recover from outages related to forest fires.

 

The energy information Administration (EIA) of the United States reported an unexpected fall in crude inventories last week, surprising analysts, which projected growth.

 

According to the EIA, crude oil reserves declined in the week ending on May 6, by 3.41 million barrels to 539.9 million barrels, while analysts were expecting a growth by 0.71 million barrels.

 

According to the American Petroleum Institute (API) published in Tuesday, stocks in the United States increased by 3.45 million barrels to 543.1 million for the week ending May 6, whereas analysts had assumed that they grow up to 714,000 barrels.

 

Gold price bounced from a two-week lows on Wednesday, as the dollar rally was interrupted, while European shares fell, stoking investors ‘ appetite for the precious metal.

 

The dollar fell to 0.3 percent against a basket of major currencies.

Analysts consider the level of $ 1,300 per ounce as a price ceiling in the short term because the metal has already increased by 20 percent since the beginning of the year due to the strengthening of the commodity market and cooling expectations of FED rate hike in the United States in June.

 

Gold is supported mainly by traders‘ expectations that the next increase in interest rates will only happen later this year, because the FED is mindful of the difficult global economic environment.

 

The current situation is favorable for gold, but its hard to call it too favorable as the economy of the United States proved to be generally in good shape.

 

Goldman Sachs also sees limited growth potential of gold prices, given that the FED is unlikely to surprise by decline in rates, the dollar is almost nowhere more to fall and its hard for China to strengthen its currency so as to substantially weaken the dollar.

However, Goldman increased its price forecasts for gold on 3, 6 and 12 months to $1,200, $ 1.180 and $ 1,150 per ounce, respectively from $ 1,100, $ 1,050 and $ 1,000 per ounce, referring to the strong position of investors – speculators.

 

Source : Gold retreat from bounce, Oil prices surge on upbeat EIA and supply outage in Nigeria

 

 

Highligt

1. Oil prices rose on Wednesday amid the return of worries about supply outages as Shell announced the closing of a key pipeline in Nigeria.

2.According to the EIA, crude oil reserves declined in the week ending on May 6, by 3.41 million barrels to 539.9 million barrels, while analysts were expecting a growth by 0.71 million barrels.

3.

The dollar fell to 0.3 percent against a basket of major currencies.

4.Gold is supported mainly by traders‘ expectations that the next increase in interest rates will only happen later this year, because the FED is mindful of the difficult global economic environment.

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FOMC minutes sends rate hike odds to 34%, Dollar index surges to 7-week high

 

The situation about increasing of Federal Funds Rate in June continue to heats up – this time from very hawkish statement from Fed official from Richmond.

 

Fed Richmond President Jeffrey Lacker blamed markets on being too downbeat about the pause which Fed will take before another rate hike.

 

Lacker, known for his hawkish views, who is not a voting member this year of the FED, also told Bloomberg that he supported raising the rate at the April meeting and that it would be prudent to pick it up in March.

Of the members with voting rights, only the Fed President of the Kansas City Esther George disagreed with the rest of FOMC board, saying that she would prefer to raise the target rate range to 0.50% -0.75%.

 

Lacker added that there is “usual diversity of opinions”, but supposed there are strong fundamental grounds for raising borrowing costs in June.

 

His views is support by strong pickup in US labor market. For example the number of Americans requesting first-time unemployment benefit was reduced last week to 278 thousand from 294 thousand, showed the report of US labor department. The pace of decline in the number of applications have become the highest since early February this year.

 

Experts interviewed by Bloomberg, on average, had predicted a decrease in the number of applications last week to 19 thousand. Consensus forecast of the experts interviewed by MarketWatch, had anticipated a drop by 24 thousand.

 

A week earlier, the number of applications peaked in this year, and a significant decline is a signal that US labor market remains strong, experts say.

 

The average number of applications for the past four weeks, less volatile indicator, rose to 275.75 thous. with 268.25 thous. a week earlier.Meanwhile, the number of Americans who get unemployment benefits for the week ending 7 may, declined by 13 thousand – to 2.152 million. The figure for the previous week were revised to 2.165 million from 2.161 million.

 

As the rally of US Dollar extends, commodities and safe heavens suffer. In Thursday gold futures fell to a three-week low during morning American trades, as investors are trying to second-guess the likelihood FED rate increase in the next month.

 

Gold tumbled 1.71% to $1.252 per troy ounce, the steepest decline for recent months. The move looks like a pure speculation as rate hike odds are still low and Janet Yellen was too wary on her last meeting about the possibility of changes in June.

 

But April 26-27 FOMC minutes released on Wednesday showed that the Central Bank will likely increase rates in June if US economic data from second quarter will show show rising inflation and employment levels.

 

As of Thursday morning, federal funds futures indicate 34% probability of raising rates in June, compared to 16% before the release of the protocol.

 

The growing likelihood of a rate increase in June prompted the dollar to 7-week highs.

 

The USD index, which tracks the US currency against the dynamics of trade-weighted basket of six major competitors increased by 0.21% to 95.40, peak March 29.

 

A strong United States dollar usually puts pressure on gold, since it reduces the appeal of the metal as an alternative asset and makes dollar-priced goods more expensive for holders of other currencies.

 

Source : FOMC minutes sends rate hike odds to 34%, Dollar index surges to 7-week high

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Oil rallies on upbeat API estimate

 

The weekly API report released on Tuesday gave a green light to Oil prices, showing commercial crude reserves in the US reduced by 5M barrels, dropping from historical records. The preliminary data shook up Oil traders, who expected to see a decrease of only 2.5M last week.

 

Both benchmarks climbed over the $49 level with a spread between WTI and Brent narrowing to 5 cents, WTI rose by 1.09% to 49.15, Brent gained 1.21% to 49.20. The prices are now stalling below the key $50 level, waiting for the official EIA verdict, which if confirmed will probably help prices to step over the $50 mark, first time since October 2015.

 

As crude production in Canada has idled due to wild fires in Alberta, the US is left without its main oil supplier, which is the main cause of such a surprising decline in commercial stockpiles last week. Canada, temporarily leaving the field, also helped to absorb the glut, bringing fundamental grounds in line with current price rally. Supplies from Nigeria fall due to armed actions in the country. The decline is estimated at 300K barrels/day, helping to ease oversupply concerns as well. The buoyancy will probably remain on the market till the June OPEC meeting in Vienna where the members will try to bring back the output freeze plan, which failed on the previous meeting due to disagreement between Saudi Arabia and Iran.

 

The USD index retreats slightly from two-month peak, declining by 0.07% to 95,52 level, though its unlikely to see further declines ahead of Yellen’s speech on Friday. The US figures on Advanced Goods Trade Balance, House Price Purchase Index and Fed’s Harker speech may trigger some volatility for the US currency.

 

USD/CAD trades nearly flat ahead of the BoC interest rate decision due today, declining by 0.08% at 1.3112. Gold extends its declines on low risk-aversion level and crude rally, equities are also on the rise, XAU/USD dropped by 0.40% at 1,224.30, DAX gained 1.33%, FTSE 100 advanced by 0.59%

 

 

Source : Oil rallies on upbeat API estimate

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Oil Retreats-Dollar consolidates month’s gains

Asian equities rose for a third day, supported by prospects for stimulus in China and Japan. A gauge of dollar strength held near a one-week low before a speech by the head of the Federal Reserve, while crude oil retreated with gold.

 

Stocks

 

Data on Friday showed industrial companies’ profit growth slowed to 4.2 percent in April from 11 percent the previous month. The finance ministry said the government’s debt is equivalent to 39 percent of GDP, relatively low by global standards, and there’s scope for more leverage.

 

Lenovo Group Ltd. fell to its lowest since 2011 in Hong Kong after the company announced revenue and earnings that fell short of analysts’ estimates. Toshiba Corp. jumped 10 percent to this year’s high after JPMorgan Chase & Co. upgraded its recommendation on the stock. Hyundai Merchant Marine Co. surged as much as 30 percent after Korea Development Bank said the company has made progress in negotiating discounts on leased vessels as part of a debt revamp plan.

 

Futures on the S&P 500 Index were little changed, after the gauge ended Thursday near to a one-month high. Evidence is mounting the economy is solid enough to merit Fed action, with a measure of data surprises surging to the highest since the start of last year.

 

Currencies

 

The Bloomberg Dollar Spot Index, was little changed after losing 0.2 percent in each of the last two trading sessions. The yen weakened 0.1 percent versus the dollar, trimming its weekly gain to 0.2 percent.

 

The currencies of oil-exporting nations were buoyed this week by an increase in crude prices. Canada’s dollar appreciated 0.9 percent, while the Russian rubble jumped 1.4 percent. The pound climbed 1.1 percent this week.

 

Commodities

 

West Texas Intermediate crude slipped 0.7 percent to $49.12 a barrel. It’s gained about 3 percent this week, buoyed by a drop in U.S. oil inventories and output, and exceeded $50 in the last session for the first time this year. OPEC is unlikely to set a production target when it meets June 2 as it sticks with Saudi Arabia’s strategy of squeezing out rivals, according to analysts surveyed by Bloomberg. Gold fell as much as 0.7 percent to a three-month low of $1,211.68 an ounce

 

Source : Vipromarkets News

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EURUSD Into Next Week's ECB & NFP : Range and Outlook - BTMU

by : Lee Hardman, Currency Analyst | Bank of Tokyo Mitsubishi UFG

 

EURUSD - Bearish Bias (1.1050-1.1400)

The main US economic data releases in the week ahead will be the upcoming labour market updates for May

personal spending and deflator reports for April .

Stronger spending is expected in April and employment growth is expected to remain solid enough to justify a hike in the coming months.Fed Chair Yellen is alos scheduled to speak altough may not provide policy guidance in the week ahead.

 

The main focus in the week ahead for the Euro will be upcoming ECB Policy Meeting. We do not expect the meeting to prove market moving for the EURO as the ECB is comfortable to maintain its current pace of policy easing. The ECB will hold another TLTRO in June providing cheaper financing. Higher take up could weigh modestly on the EURO.

 

The reduced risk of BREXIT is providing limited to no support for the EURO