Oil Futures Extend Gains, Rise 1.6%

Trading 28 sept 2018 Commentaire »

Crude oil prices rose sharply on Friday, amid speculation about shortage in supply post implementation of sanctions on Iranian oil from early November.

The U.S. Energy Secretary Rick Perry's remarks on Wednesday that the U.S. will not open up its strategic petroleum reserves or put a cap on prices, aided oil's surge.

With the OPEC members and leading non-OPEC oil producers saying they are in no hurry to increase output to make up for the loss of supply from Iran, concerns about supply have increased.

The meeting of the Organization of the Petroleum Exporting Countries and non-OPEC members including Russia, last weekend, ended with no formal recommendation for any additional supply boost.

Crude oil futures for November delivery ended up $1.13, or 1.6%, at $73.25 a barrel, the highest settlement price in two months.

On Thursday, crude oil futures ended up $0.55, or 0.8%, at $72.12 a barrel. For the week, crude oil futures gained 3.5%

The Energy Information Administration's report on Wednesday showed an unexpected jump in U.S. crude stockpiles last week. The data showed crude stockpiles to have risen by nearly 1.9 million barrels in the week, as against an expected drop of over 2 million barrels. The report also said U.S. crude production hit a record 11.1 million bpd in the week.

According to reports, crude oil shipments from Iran may have dropped to about 1.5 million barrels a day this month. It is expected that oil exports from Iran will drop further when U.S. sanctions take effect on November 4. Iran exported about 2.3 million barrel a day in June.


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Treasuries Close Roughly Flat For Second Straight Day

Trading 28 sept 2018 Commentaire »

After ending the previous session roughly flat, treasuries turned in another lackluster performance during trading on Friday.

Bond prices saw modest strength at points during the day before closing near the unchanged line. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, ended the day unchanged at 3.056 percent.

Uncertainty about trade kept some traders on the sidelines as the U.S. and Canada approach a September 30th deadline to reach an agreement for Canada to join a trade deal struck between the U.S. and Mexico.

U.S. Trade Representative Robert Lighthizer recently said the U.S. is prepared to move ahead with the deal replacing the North American Free Trade Agreement without Canada.

Traders also kept an eye on developments overseas after the new Italian government offered a budget with a deficit target three times larger than the previous administration's goal.

In U.S. economic news, the Commerce Department released a report showing personal income rose by slightly less than expected in the month of August, while personal spending increased in line with economist estimates.

The report said personal income climbed by 0.3 percent in August, matching the increase seen in July. Economists had expected income to rise by 0.4 percent.

Meanwhile, the Commerce Department said personal spending rose by 0.3 percent in August after climbing by 0.4 percent in the previous month. Spending had been expected to increase by 0.3 percent.

A separate report from the University of Michigan showed consumer sentiment improved by slightly less than initially estimated in the month of September.

The report said the consumer sentiment index for September was downwardly revised to 100.1 from the preliminary reading of 100.8. Economists had expected the index to be unrevised.

Despite the downward revision, the final reading for September still reflects a notable increase from the final August reading of 96.2.

Next week's trading may be impacted by reaction to the monthly jobs report due next Friday along with reports on manufacturing and service activity and remarks by several Federal Reserve officials.


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Gold Futures Rebound, End 0.7% Up

Trading 28 sept 2018 Commentaire »

Gold prices moved higher on Friday, bouncing back strongly after falling to a six-week low in the previous session after the U.S. Federal Reserve hiked interest rate by 25 basis points and hinted at more tightening going ahead.

The dollar, which rose to a two-week high against major currencies earlier in the day, retreated and pared some gains subsequently. The dollar index, which rose to 94.98, dropped to around 94.60 before edging up to 94.72.

Gold futures for December ended up $8.80, or 0.70%, at $1,196.20 an ounce.

On Thursday, gold futures ended down $11.70, or 1%, at $1,187.40 an ounce, the lowest close since August 17.

Gold futures lost 0.4% for the week and shed about 0.9% in the month.

Silver futures for December settled at $14.712 an ounce, gaining $0.422 for the session.

Copper futures for December ended up $0.220, at $2.8050 per pound.

On Wednesday, the Federal Reserve's monetary policy statement hinted at another interest rate hike in December and three more rate increases in 2019.

In economic news on Friday, the U.S. Commerce Department released a report that said personal income climbed by 0.3% in August, matching the increase seen in July. Economists had expected income to rise by 0.4%.

Meanwhile, personal spending rose by 0.3% in August after climbing by 0.4% in the previous month. Spending had been expected to increase by 0.3%.

A separate report from the University of Michigan showed consumer sentiment improved by slightly less than initially estimated in the month of September. The report said the consumer sentiment index for September was downwardly revised to 100.1 from the preliminary reading of 100.8. Economists had expected the index to be unrevised.

Despite the downward revision, the final reading for September still reflects a notable increase from the final August reading of 96.2.


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Dollar Little Changed Heading Into The Weekend

Trading 28 sept 2018 Commentaire »

The dollar is paring early gains against its major European rivals Friday afternoon and is recovering from early weakness against the Japanese Yen. The reversal has left the greenback little changed overall as the weekend draws near.

Personal income in the U.S. rose by slightly less than expected in the month of August, according to a report released by the Commerce Department on Friday, while personal spending increased in line with economist estimates.

The report said personal income climbed by 0.3 percent in August, matching the increase seen in July. Economists had expected income to rise by 0.4 percent.

Meanwhile, the Commerce Department said personal spending rose by 0.3 percent in August after climbing by 0.4 percent in the previous month. Spending had been expected to increase by 0.3 percent.

Reflecting moderations in both output and new orders growth as well as weaker hiring sentiment, MNI Indicators released a report on Friday showing a bigger than expected slowdown in the pace of growth in Chicago-area business activity in the month of September.

MNI Indicators said its Chicago business barometer fell to 60.4 in September from 63.6 in August, although a reading above 50 still indicates growth. Economists had expected the barometer to edge down to 62.5.

A report released by the University of Michigan on Friday showed consumer sentiment in the U.S. improved by slightly less than initially estimated in the month of September. The report said the consumer sentiment index for September was downwardly revised to 100.1 from the preliminary reading of 100.8. Economists had expected the index to be unrevised.

The dollar climbed to a 2-week high of $1.1569 against the Euro Monday morning, but has since retreated to around $1.1615.

Eurozone inflation accelerated in September on food and energy prices, flash data from Eurostat showed Friday. Inflation rose marginally to 2.1 percent, in line with expectations, from 2 percent a month ago.

German unemployment decreased notably in September, figures from the Federal Labor Agency revealed Friday. The number of unemployed declined 23,000 from the previous month to 2.3 million in September. Economists had forecast a moderate fall of 9,000. Unemployment had declined by 10,000 in August.

Germany's jobless rate remained unchanged in August, figures from Destatis revealed Friday. The unemployment rate came in at adjusted 3.4 percent, the same rate as seen in July.

France consumer price inflation slowed marginally in September, the provisional estimate from the statistical office Insee showed Friday. Inflation eased to 2.2 percent in September from 2.3 percent in August. The rate was expected to remain at 2.3 percent. Final data is due on October 11.

The buck rose to a 2-week high of $1.30 against the pound sterling Friday morning, but has since eased back to around $1.3040.

The UK economy expanded as initially estimated in the second quarter and the current account gap widened on visible trade deficit and primary income shortfall, data from the Office for National Statistics revealed Friday.

Gross domestic product grew 0.4 percent in the second quarter, unrevised from the previous estimate. The growth rate for the first quarter was revised down to 0.1 percent from 0.2 percent.

Due to higher visible trade deficit and primary income shortfall, the current account deficit widened by GBP 4.6 billion to GBP 20.3 billion in the second quarter. This was equivalent to 3.9 percent of GDP.

UK consumer confidence weakened in September amid heightened uncertainty surrounding Brexit, survey data from GfK showed Friday. The consumer sentiment index dropped to -9 in September from -7 in August. The expected score was -8.

The greenback slid to an early low of Y113.311 against the Japanese Yen Friday, but has since bounced back to a 9-month high of Y113.590.

The jobless rate in Japan came in at a seasonally adjusted 2.4 percent in August, the Ministry of Internal Affairs and Communications said on Friday, beneath expectations for 2.5 percent, which would have been unchanged from the previous month.

The value of retail sales in Japan was up a seasonally adjusted 0.9 percent on month in August, the Ministry of Economy, Trade and Industry said on Friday. That beat forecasts for an increase of 0.5 percent and was up from 0.1 percent in July.

Industrial production in Japan climbed a seasonally adjusted 0.7 percent on month in August, the Ministry of Internal Affairs and Communications said in Friday's preliminary reading. That was shy of forecasts for an increase of 1.4 percent following the 0.1 percent decline in July.

Japan's housing starts increased for the first time in three months in August, data from the Ministry of Land, Infrastructure, Transport and Tourism revealed Friday. Housing starts advanced 1.6 percent in August from last year, reversing a 0.7 percent drop in July. Orders were forecast to climb 0.4 percent.


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Global macro overview for 28/09/2018

Trading 28 sept 2018 Commentaire »

The American Fed dealt very gently with the markets, but the Euro did not take advantage of this opportunity. Yesterday, the emerging markets currencies were affected by recurring concerns about the condition of public finances in Italy. The budget adopted by the government assumes a considerable increase in the deficit, and this heralds problems.

Concerns about the economic and political situation in Italy could be felt already in the spring, when the election won the Five Stars Movement and after a long political fair established a toxic coalition with the League, which was still with the same Silvio Berlusconi. These fears eased somewhat, the markets hoped that the rulers, after moving from the campaign stage to the stage of exercising power, would come down somewhat to the ground and respect the efforts made so far towards stabilizing the fiscal situation. Especially that the technocrat Giovanni Tria was appointed Minister of Economy, who spoke about the need to limit debt in relation to GDP.

In the end, however, political needs have prevailed. Because the parties have voters in different parts of the country, the budget ultimately puts in a minimum income, withdrawal from raising the retirement age, cutting taxes and a higher minimum wage. Meaning, at the same time, an increase in spending and a drop in income. The deficit, which was supposed to fall below 1% of GDP next year, is now planned at 2.4%. These numbers, however, do not reflect the essence of the problem. Italy is nominally the most indebted economy in Europe. In relation to GDP, debt is only higher in Greece. At the same time, although the increase is not spectacular, the economic situation is at the top of the decade. A possible slowdown, especially as a result of external shock (such as the 2008 crisis) would result in a deficit explosion and possibly an uncontrolled increase in public debt. From the point of view of long-term prospects, such a social budget is the last thing that the Italian economy, suffering from a chronic decline in competitiveness, needs. The Italian budget has yet to be adopted by the parliament, but for now, the issues are not going in the right direction, especially as the conflict with the European Commission seems inevitable.

Let's now take a look at the EUR/USD technical picture at the H1 time frame. As a result, despite the good sentiment in the global markets and the positive surprise of inflation in Germany, the EURUSD pair sharply dived and remains under pressure from sellers today. The next technical support at the level of 1.1565 has been almost hit (5 pips miss) and a little bounce is being developed now. The local technical resistacne at the level of 1.1627 should cap all the bullish attempt to rally higher. Please notice the momentum indicator is still below its fifty level, so all the bounces in price will be used by bears to sell for a better price.

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U.S. Consumer Sentiment Improves Slightly Less Than Initially Estimated

Trading 28 sept 2018 Commentaire »

A report released by the University of Michigan on Friday showed consumer sentiment in the U.S. improved by slightly less than initially estimated in the month of September.

The report said the consumer sentiment index for September was downwardly revised to 100.1 from the preliminary reading of 100.8. Economists had expected the index to be unrevised.

Despite the downward revision, the final reading for September still reflects a notable increase from the final August reading of 96.2.

"Consumer sentiment remained at very favorable levels in September, with the Index topping 100.0 for only the third time since January 2004," said Surveys of Consumers chief economist Richard Curtin.

He added, "Most of the September gain was among households with incomes in the bottom third, whose index value of 96.3 was the highest since November 2000."

The report said the current economic conditions index climbed to 115.2 in September from 110.3 in August, while the index of consumer expectations rose to 90.5 from 87.1.

Curtin noted the single issue that was cited as having a potential negative impact on the economy was tariffs, with concerns about the negative impact of tariffs cited by nearly one-third of all consumers in September.

"Those that voiced negative views of tariffs also held much less favorable prospects for the economy and held inflation expectations that were 0.6 of a percentage point higher than those who didn't mention tariffs," Curtin said.

On the inflation front, one-year inflation expectations fell to 2.7 percent in September from 3.0 percent in August, while five-year inflation expectations dipped to 2.5 percent from 2.6 percent.


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Chicago Business Barometer Drops More Than Expected In September

Trading 28 sept 2018 Commentaire »

Reflecting moderations in both output and new orders growth as well as weaker hiring sentiment, MNI Indicators released a report on Friday showing a bigger than expected slowdown in the pace of growth in Chicago-area business activity in the month of September.

MNI Indicators said its Chicago business barometer fell to 60.4 in September from 63.6 in August, although a reading above 50 still indicates growth. Economists had expected the barometer to edge down to 62.5.

The report said growth in production and new orders remained solid, although the production index dropped to a six-month low and the new orders index slid to a five-month low.

"Anecdotal evidence continued to report some firms outperforming their own forecasts, but others noted a slowdown in output and weaker demand," MNI Indicators said.

The report also said hiring activity eased again in September, with firms still appearing open to adding to their workforce but having difficulty identifying adequate workers.

On the inflation front, the prices paid index dipped in September, but MNI Indicators noted tariffs continue to push prices higher along with material shortages.

The order backlogs index rose in September, as healthy levels of demand have left firms unable to complete orders, exacerbated by component allocation issues and employment shortages.


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Dollar Little Changed After U.S. Consumer Sentiment Index

Trading 28 sept 2018 Commentaire »

At 10 am ET Friday, the University of Michigan has released its revised reading on consumer sentiment in the month of September.

Following the data, the greenback changed little against its major rivals.

The greenback was trading at 113.50 against the yen, 0.9769 against the franc, 1.1588 against the euro and 1.3013 against the pound around 10:02 am ET.


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*U.S. Consumer Sentiment Index Downwardly Revised To 100.1 In September

Trading 28 sept 2018 Commentaire »

U.S. Consumer Sentiment Index Downwardly Revised To 100.1 In September


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Dollar Mixed Ahead Of U.S. Consumer Sentiment Index

Trading 28 sept 2018 Commentaire »

At 10 am ET Friday, the University of Michigan is due to release its revised reading on consumer sentiment in the month of September. The consumer sentiment index is expected to be unrevised at 100.8.

Ahead of the data, the greenback traded mixed against its major rivals. While the greenback rose against the pound, it held steady against the rest of major rivals.

The greenback was worth 113.47 against the yen, 0.9768 against the franc, 1.1580 against the euro and 1.3009 against the pound as of 9:55 am ET.


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