Treasuries Move Significantly Lower On Upbeat Jobs Data

Trading 07 sept 2018 Commentaire »

Treasuries showed a significant move to the downside during trading on Friday as traders reacted to upbeat employment data.

Bond prices came under pressure early in the session and remained firmly negative throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 6.3 basis points to 2.942 percent.

With the increase on the day, the ten-year yield more than offset the drop seen in the previous session, reaching its highest closing level in a month.

The pullback by treasuries came following the release of a closely watched Labor Department report showing stronger than expected job growth in the month of August.

The Labor Department said non-farm payroll employment surged up by 201,000 jobs in August after climbing by a downwardly revised 147,000 jobs in July.

Economists had expected employment to increase by about 191,000 jobs compared to the addition of 157,000 jobs originally reported for the previous month.

The report also said the annual rate of average hourly employee earnings growth accelerated to 2.9 percent in August from 2.7 percent in July.

The data paints a positive picture of the economy and reinforced expectations the Federal Reserve will raise interest rates later this month.

"This report is strong throughout and with the economy likely to grow more than 3% again in 3Q18 it will keep the Fed hiking interest rates with another move in September with a further increase in December," said James Knightley, Chief International Economist at ING.

Treasuries saw continued weakness in afternoon trading after President Donald Trump suggested he may impose tariffs on another $267 billion worth of Chinese goods.

Trump's remarks to reporters aboard Air Force One come as the administration is already considering imposing tariffs on $200 billion worth of Chinese goods following the expiration of a public comment period at midnight on Thursday.

"The $200 billion we are talking about could take place very soon depending on what happens," Trump said. "To a certain extent it's going to be up to China."

"And I hate to say this, but behind that is another $267 billion ready to go on short notice if I want," he added. "That changes the equation."

China's Commerce Ministry has warned it will be forced to roll out necessary retaliatory measures if the U.S. imposes any new tariffs.

Trade news may attract attention next week, although traders are also likely to keep an eye on reports on producer and consumer price inflation, retail sales and industrial production as well as the Fed's Beige Book.

Bond trading could also be impacted by reaction to the Treasury Department's auctions of three-year and ten-year notes and thirty-year bonds.

The Treasury plans to sell $35 billion worth of three-year notes next Tuesday, $23 billion worth of ten-year notes next Wednesday and $15 billion worth of thirty-year bonds next Thursday.


The material has been provided by InstaForex Company - www.instaforex.com

Crude Oil Settles Marginlly Down On Trade Tensions

Trading 07 sept 2018 Commentaire »

Crude oil prices declined marginally on Friday, as concerns about possible drop in demand due to trade war tensions slightly outweighed recent data showing a fall in crude stockpiles.

Data released by the Energy Information Administration on Thursday showed crude stockpiles in the U.S. to have declined by 4.3 million barrels in the week ended August 31. That was a much larger than expected drop.

Crude oil futures for October delivery settled at $67.75 a barrel, down 2 cents, from previous close. For the week, crude oil future shed about 2.9%.

U.S.-China trade tensions have escalated today after U.S. President Donald Trump reportedly announced that his administration intends to go ahead with tariffs on US$200 billion worth of Chinese imports.

He reportedly added, "And I hate to say that, but behind that, there's another US$267 billion ready to go on short notice if I want. That totally changes the equation."

China had already warned that it will be forced to retaliate if the United States implements any new tariff measures.

The Chinese economy has slowed down due to trade war and further setbacks could result in a significant drop in China's oil imports.

Meanwhile, Trump also remarked that he was "still bothered by the terms of U.S. trade with Japan." This suggests more is coming up on the trade war front. A full-blown trade war could significantly hurt the outlook for global economic growth and result in a drop in demand for crude oil.

However, with U.S. sanctions against Iranian oil set to take effect in November and reports about supply disruptions now and then in Libya and Venezuela likely, traders are hoping that crude oil prices may edge higher going forward.

A report from Baker Hughes, released at 1 PM ET, showed that the number of active U.S. rigs drilling for oil was down by 2 to 860 this week. Last week, the rig count had edged up by 2. With this week's drop, the total active U.S. rig count, including oil and natural-gas rigs, remains unchanged at 1,048, the report from Baker Hughes reveals.


The material has been provided by InstaForex Company - www.instaforex.com

Dollar Recovers From Early Weakness After Jobs Report

Trading 07 sept 2018 Commentaire »

The dollar got off to a weak start Friday, but has since staged a recovery and is up modestly higher against its major rivals. Traders continue to keep a close eye on trade negotiations, but were encouraged by the stronger than expected employment growth in August.

After reporting weaker than expected job growth in the previous month, the Labor Department released a report on Friday showing employment in the U.S. jumped by more than expected in the month of August. The Labor Department said non-farm payroll employment surged up by 201,000 jobs in August after climbing by a downwardly revised 147,000 jobs in July.

Economists had expected employment to increase by about 191,000 jobs compared to the addition of 157,000 jobs originally reported for the previous month.

Despite the stronger than expected job growth during the month, the unemployment rate held at 3.9 percent in August compared to expectations for a drop to 3.8 percent.

The dollar slipped to an early low of $1.1649 against the Euro Friday, but has since bounced back to around $1.1560.

The euro area economy expanded as initially estimated in the second quarter, data from Eurostat showed Friday. Gross domestic product climbed 0.4 percent sequentially, the same rate as seen in the first quarter and in line with preliminary estimate.

Germany's industrial production declined unexpectedly in July, data from Destatis revealed Friday. Industrial production fell 1.1 percent month-on-month in July, in contrast to a 0.2 percent rise economists had forecast. Production decreased 0.7 percent in June.

Germany's exports declined for the first time in three months in July, while imports grew at a faster pace, Destatis reported Friday.

Exports fell unexpectedly 0.9 percent on month in July, reversing June's 0.1 percent rise. This was the first fall in three months. Shipments were expected to climb 0.3 percent.

Meanwhile, monthly growth in imports accelerated to 2.8 percent from 1.3 percent in June. Economists had forecast a 0.1 percent rise in imports.

As a result, the trade surplus fell to a seasonally adjusted EUR 15.8 billion from EUR 19.3 billion in the previous month.

France's industrial production logged a steady growth in July, the statistical office Insee showed Friday. Industrial output grew 0.7 percent month-on-month in July, the same pace of expansion as seen in June. Output was forecast to gain at a much weaker rate of 0.2 percent.

France's visible trade deficit for July narrowed from a year ago, figures from the Customs Service showed Friday. The trade gap shrunk to EUR 3.49 billion from EUR 6.00 billion in the same month last year. Economists had forecast a shortfall of EUR 5.73 billion.

The buck dropped to a low of $1.3028 against the pound sterling Friday morning, but has since rebounded to around $1.2915.

UK house prices rose at a marginal pace in August, data from the Lloyds bank subsidiary Halifax and IHS Markit showed Friday. House prices gained 0.1 percent month-on-month in August, slower than July's 1.2 percent increase.

The greenback has risen to around Y111.075 against the Japanese Yen Friday afternoon, from an early low of Y110.381.

The average of household spending in Japan was up 0.1 percent on year in July, the Ministry of Internal Affairs and Communications said on Friday, coming in at 283,387 yen. That beat expectations for a decline of 0.9 percent following the 1.2 percent drop in June.


The material has been provided by InstaForex Company - www.instaforex.com

Gold Futures Settle Lower As Dollar Rebounds After Jobs Data

Trading 07 sept 2018 Commentaire »

Gold pared early gains and drifted down to end lower on Friday, as the U.S. dollar rebounded after early weakness.

The dollar bounced back following data from the U.S. Labor Department that showed a stronger than expected employment growth in August and an increase in average hourly employee earnings raising prospects of hike in interest rates this month. The dollar index, rose to 95.35, from a low of around 94.85 earlier in the day.

Meanwhile, disputes between the U.S. and its trade partners continue to hurt investor sentiment. Today, U.S. President Donald Trump reportedly told a columnist for The Wall Street Journal that he was "still bothered by the terms of U.S. trade with Japan."

Trump reportedly announced today that his administration intends to go ahead with tariffs on US$200 billion worth of Chinese imports. He reportedly added, "And I hate to say that, but behind that, there's another US$267 billion ready to go on short notice if I want. That totally changes the equation."

Gold futures for December ended down $3.90, or 0.3%, at $1,200.40 an ounce. On Thursday, gold futures ended up $3.00, or 0.25%, at $1,204.30 an ounce. For the week, gold futures shed about 0.5%.

Silver futures for December ended down $0.011, at $14.170 an ounce, while Copper futures declined by $0.0140, to $2.6225 per pound.

The Labor Department's report showed that non-farm payroll employment in the U.S. surged up by 201,000 jobs in August after climbing by a downwardly revised 147,000 jobs in July. Economists had expected employment to increase by about 191,000 jobs compared to the addition of 157,000 jobs originally reported for the previous month.

Despite the stronger than expected job growth during the month, the unemployment rate held at 3.9% in August compared to expectations for a drop to 3.8%.

The unemployment rate came in flat as the household survey measure of employment showed a slump of 423,000 persons and the labor force shrank by 469,000 persons.

The report also said average hourly employee earnings rose by $0.10 or 0.4% to $27.16, reflecting the biggest monthly increase seen last December. The annual rate of average hourly employee earnings growth subsequently accelerated to 2.9% in August from 2.7% in July.

"This report is strong throughout and with the economy likely to grow more than 3% again in the third quarter of this financial year, it will keep the Fed hiking interest rates with another move in September with a further increase in December," said James Knightley, Chief International Economist at ING.


The material has been provided by InstaForex Company - www.instaforex.com

Upbeat U.S. Jobs Data Buoys Dollar

Trading 07 sept 2018 Commentaire »

The U.S. dollar strengthened against its key counterparts in the European session on Friday, following the release of a data showing better than expected job growth in August, which bolsters hopes for a quarter point rate hike as early as next month.

Data from the Labor Department showed that the non-farm payroll employment surged up by 201,000 jobs in August after climbing by a downwardly revised 147,000 jobs in July.

Economists had expected employment to increase by about 191,000 jobs compared to the addition of 157,000 jobs originally reported for the previous month.

Despite the stronger than expected job growth during the month, the unemployment rate held at 3.9 percent in August compared to expectations for a drop to 3.8 percent.

As a public comment period on new U.S. tariffs on $200 billion worth of Chinese goods has expired, traders focus on news regarding the implementation of the proposed tariffs by President Donald Trump and his administration.

Adding to the worries about, Trump reportedly told a columnist for the Wall Street Journal he is "still bothered by the terms of U.S. trade with Japan."

The currency traded mixed against its major counterparts in the Asian session. While the currency fell against the yen and the euro, it held steady against the pound and the franc.

The greenback appreciated to a 2-day high of 0.6550 against the kiwi, after falling to 0.6594 at 5:45 pm ET. Next key resistance for the greenback is seen around the 0.64 region.

Following near a 5-month low of 0.9642 hit at 2:45 am ET, the greenback reversed direction and bounced off to 0.9685 against the franc. Further uptrend may take the greenback to a resistance around the 0.99 level.

The greenback added 0.7 percent to hit a 2-day high of 1.1562 against the euro, from a low of 1.1649 hit at 3:00 am ET. The greenback is seen finding resistance around the 1.13 mark.

Data from Destatis showed that Germany's exports declined for the first time in three months in July, while imports grew at a faster pace.

Exports fell unexpectedly 0.9 percent on month in July, reversing June's 0.1 percent rise. This was the first fall in three months. Shipments were expected to climb 0.3 percent.

Having dropped to more than a 2-week low of 110.38 against the yen at 8:00 pm ET, the greenback changed its course and was trading higher at 110.99. The greenback may possibly challenge resistance around the 113.00 level.

Data from the Ministry of Internal Affairs and Communications showed that Japan household spending rose 0.1 percent on year in July, coming in at 283,387 yen.

That beat expectations for a decline of 0.9 percent following the 1.2 percent drop in June.

The greenback was 1.0 percent higher at 0.7125 against the aussie, a 2-1/2-year high. The pair was valued at 0.7195 when it closed deals on Thursday. The greenback is likely to test resistance around the 0.70 level, if it continues its rally.

Bouncing off from a 3-day low of 1.3110 seen at 8:15 am ET, the greenback climbed to 1.3182 against the loonie. The greenback finished yesterday's trading at 1.3141 against the loonie. The next possible resistance for the greenback is seen around the 1.33 level.

The greenback regained some of its lost ground against the pound with the pair trading at 1.2956. This follows a weekly low of 1.3028 touched at 6:45 am ET. On the upside, 1.27 is possibly seen as the next resistance for the greenback.

Data from the Lloyds bank subsidiary Halifax and IHS Markit showed that UK house prices rose at a marginal pace in August.

House prices gained 0.1 percent month-on-month in August, slower than July's 1.2 percent increase.


The material has been provided by InstaForex Company - www.instaforex.com

The daily review of EUR / USD as of September 7, 2018. Ichimoku Indicator

Trading 07 sept 2018 Commentaire »

EUR / USD

analytics5b924290eb7bf.jpg

The euro, thanks to the support of 1.1545-72 (the lower boundary of the weekly cloud + the weekly Tenkan + day cross), this week keeps its location in the weekly cloud, thereby increasing the chances of continuing the weekly upward correction. The main resistance line in this way is concentrated now in the area of 1.1680 (daytime cloud) - 1.1708-50 (week and month Fibo Kijuny).

analytics5b9242a5b6436.jpg

Levels of support and resistance today retained their location. In addition, it retains its performance goal for the breakdown of the cloud H1. As a result, the main conclusions and expectations also remain the same. The goal and guidelines for the development of the upward movement are 1.1680 - 1.1708 - 1.1750. The center of attraction and preservation of bullish advantages is the area of 1.1620-30 (crosses and clouds of lower periods + day Tenkan). The bulk of the supports still unite in the zone 1.1518-72.

Indicator parameters:

All time intervals 9 - 26 - 52

The color of indicator lines:

Tenkan (short-term trend) - red,

Kijun (medium-term trend) - green,

Fibo Kijun is a green dotted line,

Chinkou is gray,

Clouds: Senkou Span B (SSB, long-term trend) - blue,

Senkou Span A (SSA) - pink.

The color of additional lines:

Support and resistance MN - blue, W1 - green, D1 - red, H4 - pink, H1 - gray,

Horizontal levels (not Ichimoku) - brown,

Trend lines - purple.

The material has been provided by InstaForex Company - www.instaforex.com

U.S. Employment Jumps More Than Expected, Wage Growth Accelerates

Trading 07 sept 2018 Commentaire »

After reporting weaker than expected job growth in the previous month, the Labor Department released a report on Friday showing employment in the U.S. jumped by more than expected in the month of August.

The Labor Department said non-farm payroll employment surged up by 201,000 jobs in August after climbing by a downwardly revised 147,000 jobs in July.

Economists had expected employment to increase by about 191,000 jobs compared to the addition of 157,000 jobs originally reported for the previous month.

The bigger than expected increase in employment reflected notable job growth in the professional and business services, healthcare, wholesale trade, transportation and warehousing, and mining sectors.

Despite the stronger than expected job growth during the month, the unemployment rate held at 3.9 percent in August compared to expectations for a drop to 3.8 percent.

The unemployment rate came in flat as the household survey measure of employment showed a slump of 423,000 persons and the labor force shrank by 469,000 persons.

The report also said average hourly employee earnings rose by $0.10 or 0.4 percent to $27.16, reflecting the biggest monthly increase seen last December.

The annual rate of average hourly employee earnings growth subsequently accelerated to 2.9 percent in August from 2.7 percent in July. Wage growth had been expected to remain unchanged.

"This report is strong throughout and with the economy likely to grow more than 3% again in 3Q18 it will keep the Fed hiking interest rates with another move in September with a further increase in December," said James Knightley, Chief International Economist at ING.


The material has been provided by InstaForex Company - www.instaforex.com

Taiwan August Trade Surplus Declines

Trading 07 sept 2018 Commentaire »

Taiwan's trade surplus for August declined from the same month last year as the growth in imports outpaced that of exports, data from the finance ministry showed Friday.

The trade surplus decreased 21 percent year-on-year to $4.53 billion.

Exports rose 1.9 percent and imports increased 7.9 percent from a year ago.


The material has been provided by InstaForex Company - www.instaforex.com

Spain Industrial Output Continues To Expand

Trading 07 sept 2018 Commentaire »

Spain's industrial production continued to expand in July, the statistical office INE reported Friday.

Industrial production grew by adjusted 0.5 percent annually in July versus a 0.4 percent rise in June.

On an unadjusted basis, industrial output rebounded 2.8 percent, following June's 2.1 percent decline.

Month-on-month, industrial production slid 0.3 percent after falling 0.6 percent in June.


The material has been provided by InstaForex Company - www.instaforex.com

German Industrial Output Falls Unexpectedly; Exports Drop Most In 5 Months

Trading 07 sept 2018 Commentaire »

Germany's industrial production declined unexpectedly and exports logged its biggest fall in five months in July, signaling a weak start to the third quarter.

Industrial production fell 1.1 percent month-on-month in July, bigger than the 0.7 percent fall in June, data from Destatis revealed Friday. Economists had forecast a 0.2 percent rise for July.

Production in industry excluding energy and construction was down by 1.9 percent in July.

On a yearly basis, industrial production grew 1.1 percent, but slower than the 2.7 percent increase seen in June. Economists had forecast a 2.6 percent rise for July.

The economy ministry said the current weakness in manufacturing is related to temporary bottlenecks in car sales. Nonetheless, the upturn in the industry is likely to continue.

Another data showed that exports fell unexpectedly by 0.9 percent on month in July, reversing June's 0.1 percent rise. This was the first fall in three months and the biggest since February. Shipments were forecast to climb 0.3 percent.

Meanwhile, monthly growth in imports accelerated to 2.8 percent from 1.3 percent in June. Economists had forecast a marginal 0.1 percent rise.

As a result, the trade surplus fell to a seasonally adjusted EUR 15.8 billion from EUR 19.3 billion in the previous month.

On a yearly basis, exports advanced 7.6 percent and imports climbed 12 percent in July. Consequently, the trade surplus decreased to unadjusted EUR 16.5 billion in July from EUR 18.8 billion in the same period of last year.

Data showed that the current account surplus fell to EUR 15.3 billion from EUR 18.7 billion last year.

Despite the weakness in industrial production and foreign trade data, Jack Allen, an economist at Capital Economics, said the German economy looks set to continue growing at a decent pace, helping to support the economic recovery elsewhere in the euro-zone.

The latest weak data won't be enough to cause the European Central Bank to extend its asset purchases into next year, but they support the Bank's view that interest rate hikes are a long way off, the economist added.

In another communiqu?, Destatis said labor cost increased at a slower pace of 0.2 percent sequentially in the second quarter after rising 0.9 percent in the first quarter. On year, labor cost growth eased to 2 percent from 2.4 percent.


The material has been provided by InstaForex Company - www.instaforex.com