Crude Oil Settles Marginally Higher

Trading 04 sept 2018 Commentaire »

Crude oil pared some gains towards the end of the session on Tuesday, after having risen sharply earlier, but still settled modestly higher, amid expectations of a drop in supply.

The retreat from higher levels was due largely to reports that disruptions to energy production in the Gulf of Mexico region due to hurricane Gordon may not be severe as feared earlier. A report from Genscape that showed a rise in supplies at a delivery hub at Cushing, Oklahoma, also contributed to oil's fall from higher levels.

Oil prices rose past $70 a barrel earlier in the day as tropical storm Gordon headed north towards the Louisiana coast, forcing the closure of several drilling installations in the Gulf of Mexico.

Possible supply disruptions in Libya, the impact of U.S. sanctions on Iran too aided oil's move past $71 a barrel mark.

Crude oil futures for October delivery ended up 0.1%, at $69.87 a barrel, after rising to a high of $71.40 intraday.

On Friday, crude oil futures ended down $0.45, or 0.6%, at $69.80 a barrel. Crude oil futures gained about 1.6% last week and gained about 3.2% in August.

Meanwhile, traders looked ahead to crude oil inventory data from the American Petroleum Institute due later in the day, and the official report from Energy Information Administration, due Wednesday morning.


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Dollar Little Changed After Long Weekend

Trading 04 sept 2018 Commentaire »

The dollar is turning in a mixed performance against its major rivals Tuesday afternoon, but remains little changed overall. Traders are in a cautious mood due to concerns over global trade after returning from the long holiday weekend.

President Donald Trump said in a post on Twitter on Saturday that there is "no political necessity to keep Canada in the new NAFTA deal."

"If we don't make a fair deal for the U.S. after decades of abuse, Canada will be out," Trump tweeted. "Congress should not interfere w/ these negotiations or I will simply terminate NAFTA entirely & we will be far better off."

Recent reports have suggested Trump also plans to move ahead with tariffs on $200 billion worth of Chinese imports as early as this week.

Activity in the U.S. manufacturing sector unexpectedly grew at a faster rate in the month of August, according to a report released by the Institute for Supply Management on Tuesday.

The ISM said its purchasing managers index climbed to 61.3 in August from 58.1 in July, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to dip to 57.7.

A report released by the Commerce Department on Tuesday showed a modest uptick in construction spending in the U.S. in the month of July. The Commerce Department said construction spending inched up by 0.1 percent to an annual rate of $1.315 trillion in July after falling by 0.8 percent to a revised rate of $1.314 trillion in June.

Economists had expected construction to rise by 0.5 percent compared to the 1.1 percent slump originally reported for the previous month.

The dollar climbed to over a 1-week high of $1.1530 against the Euro Tuesday, but has since eased back to around $1.1575.

Eurozone producer price inflation accelerated on energy prices in July, figures from Eurostat showed Tuesday. Producer prices advanced 4 percent year-on-year in July, following a 3.6 percent rise in June. Prices were expected to gain 3.9 percent in July.

The buck rose to an early high of $1.2810 against the pound sterling Tuesday, but has since retreated to around $1.2850.

UK construction activity expanded at the weakest pace in three months in August largely mirroring lack of new work on infrastructure projects, survey data from IHS Markit showed Tuesday.

The IHS Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index fell notably to 52.9 in August from July's 14-month peak of 55.8. The score was also below the expected 54.9.

UK like-for-like sales increased slightly in August, figures from the British Retail Consortium and KPMG showed Tuesday. Like-for-like sales rose slightly by 0.2 percent year-on-year in August. At the same time, total sales advanced 1.3 percent annually.

The greenback has climbed to around Y111.450 against the Japanese Yen this afternoon, from an early low of Y110.900.


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Gold Futures Drift Lower, Settle Below $1,200

Trading 04 sept 2018 Commentaire »

Gold prices drifted lower on Tuesday, as the U.S. dollar gained in strength against most major currencies amid mounting worries about the impact of the ongoing trade disputes on the global economy.

The greenback advanced amid the economic turmoil in Argentina and Turkey and the sharp slide of their currencies Peso and Lira. Also, with a rate hike announcement from the Fed almost certain, traders are lapping up the dollar.

Gold futures for December ended down $7.60, or 0.6%, at $1,199.10 an ounce. On Friday, gold futures for December ended up $1.70, or 0.1%, at $1,206.70 an ounce.

Silver futures for December settled at $14.180 an ounce, down $0.377 from previous close.

Copper futures ended down $0.0690, at $2.6020 per pound.

According to a report released by the Institute for Supply Management, activity in the U.S. manufacturing sector unexpectedly grew at a faster rate in the month of August. The ISM said its purchasing managers index climbed to 61.3 in August from 58.1 in July. Economists had expected the index to dip to 57.7.

The unexpected increase by the headline index came as the new orders jumped to 65.1 in August from 60.2 in July and the production index surged up to 63.3 from 58.5.

The report said the employment index also rose to 58.5 in August from 56.5 in July, indicating an acceleration in the pace of job growth in the manufacturing sector.

The pace of price growth slowed down in August, with the prices index dipping to 72.1 in the month, from 73.2 in July, the report said.


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BoE's Carney Willing To Extend Term To Aid Smooth Brexit Transition

Trading 04 sept 2018 Commentaire »

Mark Carney confirmed on Tuesday that he is willing to extend his term as the Bank of England governor to support a "smooth Brexit transition".

In recent weeks, speculation has been rife that the former Bank of Canada governor was willing to change his earlier stance of leaving the BoE in June 2019, which was two years short of the usual eight-year term.

The UK is set to exit the European Union in March 2019.

Media reports also said the government was also in favor of having Carney as the BoE Chief during the Brexit transition as it was likely to be hard to find a successor to handle what is likely to be a tumultuous period for the economy.

In 2013, Carney succeeded Mervyn King as the BoE Governor, becoming the first non-Briton to take the top job. Carney made clear his inclination in continuing in the top job at the Bank of England during a Treasury Committee hearing on Tuesday.

Confirming that he had talks with the Chancellor Philip Hammond regarding the matter, Carney said he was "willing to do whatever" to "promote both a smooth Brexit and an effective transition at the Bank of England."

The BoE Chief denied to reveal the details and outcome of his talks with the chancellor, but said he expected the government to make an announcement in due course.

Regarding the hunt for a successor, Carney said the process would be easier once the terms of the Brexit deal with the EU are clear.

Carney did not rule out a no-deal Brexit and said the economy would suffer a shock if that is the case.

Speaking at the same hearing, BoE Chief Economist Andrew Haldane said surveys showed that the chances of a no-deal Brexit was about 1 in 4.


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U.S. Construction Spending Inches Up Less Than Expected In July

Trading 04 sept 2018 Commentaire »

A report released by the Commerce Department on Tuesday showed a modest uptick in construction spending in the U.S. in the month of July.

The Commerce Department said construction spending inched up by 0.1 percent to an annual rate of $1.315 trillion in July after falling by 0.8 percent to a revised rate of $1.314 trillion in June.

Economists had expected construction to rise by 0.5 percent compared to the 1.1 percent slump originally reported for the previous month.

The modest increase in construction spending came as spending on public construction climbed by 0.7 percent to an annual rate of $304.5 billion.

Spending on educational construction surged up by 2.1 percent to a rate of $71.6 billion, while spending on highway construction rose by 0.4 percent to a rate of $94.2 billion.

Meanwhile, the report said spending on private construction edged down by 0.1 percent to a rate of $1.011 trillion.

Spending on residential construction climbed by 0.6 percent to a rate of $560.1 billion, but spending on non-residential construction tumbled by 1.0 percent to a rate of $450.9 billion.

Compared to the same month a year ago, total construction spending in July was up by 5.8 percent.


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U.S. Manufacturing Index Unexpectedly Indicates Faster Growth In August

Trading 04 sept 2018 Commentaire »

Activity in the U.S. manufacturing sector unexpectedly grew at a faster rate in the month of August, according to a report released by the Institute for Supply Management on Tuesday.

The ISM said its purchasing managers index climbed to 61.3 in August from 58.1 in July, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to dip to 57.7.

The unexpected increase by the headline index came as the new orders jumped to 65.1 in August from 60.2 in July and the production index surged up to 63.3 from 58.5.

The report said the employment index also rose to 58.5 in August from 56.5 in July, indicating an acceleration in the pace of job growth in the manufacturing sector.

Meanwhile, the ISM said the prices index dipped to 72.1 in August from 73.2 in July, pointing to a slowdown in the pace of price growth.

"Demand is still robust, but the nation's employment resources and supply chains continue to struggle," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee

"Respondents are again overwhelmingly concerned about tariff-related activity, including how reciprocal tariffs will impact company revenue and current manufacturing locations," he added. "Panelists are actively evaluating how to respond to these business changes, given the uncertainty,"

On Thursday, the ISM is scheduled to release a separate report on activity in the service sector in the month of August. The non-manufacturing index is expected to inch up to 56.0 in August from 55.7 in July.


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Intraday technical levels and trading recommendations for EUR/USD for September 4, 2018

Trading 04 sept 2018 Commentaire »

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*ISM U.S. Purchasing Managers Index Climbs To 61.3 In August

Trading 04 sept 2018 Commentaire »

ISM U.S. Purchasing Managers Index Climbs To 61.3 In August


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*U.S. Construction Spending Inches Up 0.1% In July

Trading 04 sept 2018 Commentaire »

U.S. Construction Spending Inches Up 0.1% In July


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*Pound Strengthens To 1.2518 Vs Franc Amid BoE Carney's Inflation Hearing

Trading 04 sept 2018 Commentaire »

Pound Strengthens To 1.2518 Vs Franc Amid BoE Carney's Inflation Hearing


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