Oil Settles Higher On Falling Supplies, Hurricane Fears

Trading 12 sept 2018 Commentaire »

Crude oil prices climbed higher on Wednesday, aided by data from the U.S. Energy Information Administration that showed a notable drop in crude inventories last week.

Concerns about the likely impact of hurricane Florence, that is moving towards the east coast of the United States, and U.S. sanctions on Iran also contributed to oil's rise.

Crude oil futures for October delivery ended up $1.12, or 1.6%, at $70.37 a barrel, the best settlement price in about eight weeks.

On Tuesday, crude oil futures ended up $1.70, or 2.5%, at $69.25 a barrel, snapping a four-day losing streak.

According to the weekly report released by the U.S. Energy Information Administration, crude oil inventories dropped by 5.296 million barrels in the week ended September 7, much more than what analysts had expected. Meanwhile, supplies at Cushing, Oklahoma, were down by 1.242 million barrels last week, the EIA report revealed.

The report said that the total U.S. crude oil inventories as of last week, at 396.2 million barrels, was about 3% below the five year average for this time of the year.

Gasoline inventories were up by 1.250 million barrels last week, as compared to expectations for a build of 1.321 million barrels. Distillate stockpiles were up by 6.163 million barrels, more than four times the anticipated rise.

On Tuesday, the American Petroleum Institute had reported that crude supplies decreased by 8.636 million barrels last week.

It is feared that hurricane Florence, which is headed towards South and North Carolina may cause flooding and power interruptions and result in the shutting down of Colonial Pipeline. With people looking to stock up gasoline ahead of the storm, demand for crude has shot up.

To make up for the shortfall in supply due to sanctions against Iranian oil, U.S. President Donald Trump has been encouraging Russia and Saudi Arabia to increase crude output.

According to reports, U.S. Energy Secretary Rick Perry met with Saudi Energy Minister Khalid al-Falih on Monday in Washington and discussed the state of world oil markets. Perry is scheduled to meet the Russian Energy Minister Alexander Novak, on Thursday in Moscow, to discuss proposals for sharing technologies and boost output, the report said.


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Treasuries Close Modestly Higher Following Producer Price Inflation Data

Trading 12 sept 2018 Commentaire »

After ending the previous session notably lower, treasuries regained some ground during the trading day on Wednesday.

Bond prices moved higher early in the session and remained positive throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 1.4 basis points to 2.963 percent.

The higher close by treasuries came following the release of a report from the Labor Department showing an unexpected drop in producer prices in the month of August.

The Labor Department said its producer price index for final demand edged down by 0.1 percent in August after coming in unchanged in July. Economists had expected prices to rise by 0.2 percent.

The unexpected drop in producer prices came as prices for final demand services dipped by 0.1 percent in August, matching the decrease seen in the previous month.

Over 80 percent of the decrease in prices for final demand services can be traced to margins for machinery and equipment wholesaling, which tumbled by 1.7 percent.

Excluding food and energy prices, core producer prices still edged down by 0.1 percent in August following a 0.1 percent uptick in July. Core prices had been expected to increase by 0.2 percent.

Treasuries remained positive following the release of the Federal Reserve's Beige Book, which said the U.S. economy expanded at a moderate pace through the end of August.

The Fed's Beige Book is a compilation of anecdotal evidence on economic conditions in the twelve Fed districts released shortly before the central bank makes its decision on monetary policy.

Meanwhile, traders largely shrugged off the results of the Treasury Department's auction of $23 billion worth of ten-year notes, which attracted average demand.

The ten-year not auction drew a high yield of 2.957 percent and a bid-to-cover ratio of 2.58, while the ten previous ten-year note auctions had an average bid-to-cover ratio of 2.62.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Looking ahead, the Treasury is due to finish off this week's series of long-term securities auctions with the sale of $15 billion worth of thirty-year bonds on Thursday.

Trading on Thursday may also be impacted by reaction to reports on weekly jobless claims and consumer price inflation.


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Dollar Losing Ground Ahead Of Data Deluge

Trading 12 sept 2018 Commentaire »

The dollar got off to a positive start Wednesday, but has turned lower over the course of the trading session. Traders are looking forward to a large number of economic reports over the next two days.

Weekly jobless claims and inflation data are due to be released Thursday morning, while retail sales, industrial production and consumer sentiment are among the numerous reports slated for Friday.

A report released by the Federal Reserve on Wednesday said the U.S. economy expanded at a moderate pace through the end of August.

The Fed's Beige Book is a compilation of anecdotal evidence on economic conditions in the twelve Fed districts released shortly before the central bank makes its decision on monetary policy.

The Beige Book said Dallas reported relatively brisk growth, while Philadelphia, St. Louis, and Kansas City indicated somewhat below average growth.

The report also said consumer spending continued to grow at a modest pace since the last report, and tourism activity expanded, to varying degrees, across the nation.

Producer prices in the U.S. unexpectedly saw a modest decrease in the month of August, according to a report released by the Labor Department on Wednesday. The Labor Department said its producer price index for final demand edged down by 0.1 percent in August after coming in unchanged in July. Economists had expected prices to rise by 0.2 percent.

The dollar rose to an early high of $1.1570 against the Euro Wednesday, but has since retreated to around $1.1635.

Eurozone industrial production decreased for the second straight month in July, Eurostat reported Wednesday. Industrial output slid 0.8 percent month-on-month in July, the same pace of decline as seen in June. Economists had forecast a moderate drop of 0.5 percent.

The buck climbed to an early high of $1.2979 against the pound sterling Wednesday, but has since eased back to around $1.3050.

The greenback has pulled back to around Y111.225 against the Japanese Yen this afternoon, from an early high of Y111.632.


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Beige Book Says U.S. Economy Expanded At Moderate Pace

Trading 12 sept 2018 Commentaire »

A report released by the Federal Reserve on Wednesday said the U.S. economy expanded at a moderate pace through the end of August.

The Fed's Beige Book is a compilation of anecdotal evidence on economic conditions in the twelve Fed districts released shortly before the central bank makes its decision on monetary policy.

The Beige Book said Dallas reported relatively brisk growth, while Philadelphia, St. Louis, and Kansas City indicated somewhat below average growth.

The report also said consumer spending continued to grow at a modest pace since the last report, and tourism activity expanded, to varying degrees, across the nation.

Looking ahead, the Fed said businesses generally remained optimistic about the near-term outlook, though most districts noted concern and uncertainty about trade tensions.

A number of districts noted that such concerns had prompted some businesses to scale back or postpone capital investment, the Fed added.

The release of the Beige Book comes as the Fed is widely expected to raise interest rates by a quarter point at its next monetary policy meeting later this month.


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*Fed's Beige Book: Economy Expanded At A Moderate Pace Through The End Of August

Trading 12 sept 2018 Commentaire »

Fed's Beige Book: Economy Expanded At A Moderate Pace Through The End Of August


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BITCOIN Analysis for September 12, 2018

Trading 12 sept 2018 Commentaire »

BITCOIN has been quite volatile and corrective which has been observed to have a bearish squeeze below $6,500 area which indicates a breakout with impulsive momentum from the triangle pattern area. The price has been pushing lower recently with lower highs while the higher lows in the triangle are not quite strong enough to create strong pullbacks. Meanwhile, the price is expected to push lower towards $6,000 area while also breaking below the triangle support as well. As the price remains above $6,000 area, there would be certain chance to have an impulsive bullish bounce off the area to resume the bullish momentum again in the market.

SUPPORT: 6000

RESISTANCE: 6500, 7500

BIAS: BEARISH

MOMENTUM: VOLATILE

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*U.S. Crude Oil Inventories Tumble By 5.3 Million Barrels In Week Ended 9/7

Trading 12 sept 2018 Commentaire »

U.S. Crude Oil Inventories Tumble By 5.3 Million Barrels In Week Ended 9/7


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Fundamental Analysis of AUD/USD for September 12, 2018

Trading 12 sept 2018 Commentaire »

AUD/USD has been quite volatile amid the bullish momentum after breaking below 0.7150 with an impulsive bearish daily close recently. USD has been the dominant currency in the pair. However, despite positive employment reports recently USD has been struggling to sustain the positive momentum amid the economic reports.

AUD has been quite mixed in light of the recent economic reports which triggered certain correction and indecision in the pair. Ahead of the high impact economic reports to be published tomorrow, AUD is expected to remain volatile and indecisive in the process. Tomorrow Australia's Employment Change report is going to be published which is expected to increase to 16.5k from the previous figure of -3.9k and Unemployment Rate is expected to be unchanged at 5.3%.

On the other hand, today US PPI report was published with a decrease to -0.1% from the previous value of 0.0% which was expected to increase to 0.2% and Core PPI also decreased to -0.1% from the previous value of 0.1% which was expected to increase to 0.2%. Moreover, today Crude Oil Inventories report is going to be published which is expected to increase to -1.3M from the previous figure of -4.3M. Besides, FOMC Member Brainard is going to speak about the upcoming monetary policy decisions.

Meanhwile, USD has been struggling for gains amid the recent economic reports, whereas any positive figures of the upcoming Australia's Employment reports are expected to inject impulsive bullish momentum in the pair, encouraging a further gain against USD in the process in the nearest days.

Now let us look at the technical view. The price has been quite bullish with the recent price action after breaking below 0.7150 with a daily close. The price has formed a Bullish Regular Divergence recently which does indicate about further bullish momentum in the pair before pushing lower again with the trend. A daily close above 0.7150 will lead to impulsive bullish momentum with a target towards 0.7250 before pushing lower.

SUPPORT: 0.7050

RESISTANCE: 0.7150, 0.7250, 0.7500

BIAS: BEARISH

MOMENTUM: VOLATILE

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Bank Of England To Maintain Status Quo On Rate

Trading 12 sept 2018 Commentaire »

Bank of England policymakers are set to sit tight on interest rate after a unanimous rate hike decision in August.

The nine-member Monetary Policy Committee, led by Governor Mark Carney, is widely expected to keep the key rate unchanged at 0.75 percent.

The announcement is due at 7 am ET on September 13.

The interest rate was raised by a quarter-point at the August meeting as members viewed it necessary to bring inflation back to the target.

At 2.5 percent in July, inflation continues to stay above the central bank's 2 percent target.

The MPC is also widely expected to maintain the quantitative easing through asset purchases at GBP 435 billion.

Chancellor Philip Hammond announced on Tuesday that Carney will stay at the helm of the central bank until the end of January 2020 to support a smooth Brexit and transition.

The BoE Governor has not ruled out a no-deal Brexit and had warned earlier that the economy would suffer a shock if that is the case.

Despite the ongoing uncertainty over Brexit negotiations, the economy expanded 0.6 percent in the three months to July, the fastest since August 2017.

Warm weather and the World Cup boosted retail sales and recovery in construction underpinned economic growth.

In an interview to BBC to mark the 10th anniversary of the global financial crisis on Wednesday, Carney said high level of debt in China is a major source of concern. In terms of international financial risk, China was "top of the list", he said.

In the UK, the level of household debt "is still relatively high" and "there are pockets where there is quite significant debt", causing concern for the central bank, the BoE Chief added.


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Fundamental Analysis of USD/CAD for September 12, 2018

Trading 12 sept 2018 Commentaire »

USD/CAD has been quite impressive amid impulsive bearish pressure which led the price towards the support area between 1.2950-1.3050. USD has been struggling for gains in light of recent worse-than-expected economic reports despite the positive change in employment.

Today US PPI report was published with a decrease to -0.1% from the previous value of 0.0% which was expected to increase to 0.2% and Core PPI also decreased to -0.1% from the previous value of 0.1% which was expected to increase to 0.2%. Moreover, today Crude Oil Inventories report is going to be published which is expected to increase to -1.3M from the previous figure of -4.3M. Besides, FOMC Member Brainard is going to speak about the upcoming monetary policy and timing for monetary tightening.

On the other hand, CAD has been quite feeble amid employment reports which did not quite encourage CAD gains over USD in the process. Despite downbeat economic data even today, CAD managed to sustain the gains which indicates the strength of CAD over USD for a while. Today Canada's Capacity Utilization Rate report was published with an increase to 85.5% from the previous value of 83.7% but it failed to meet the expectation of 86.9%. Ahead of the NHPI report to be published tomorrow which is expected to be unchanged at 0.1%, CAD is quite stable at the current market situation.

Meanwhile, ahead of the US CPI and Retail Sales reports to be published this week, USD has been quite weak against CAD whereas further negative outcome of the upcoming reports may add to CAD gains in the future.

Now let us look at the technical view. The price is currently residing below 1.3050 area which has been one of the strongest event area observed so far. The area between 1.2950-1.3050 has been quite corrective and volatile, so a daily close below or above this area is indeed required to determine trend momentum in the pair for the coming days. As the price remains below 1.3350 area, the bearish bias in this pair is expected to continue further.

SUPPORT: 1.2750, 1.2950, 1.3050

RESISTANCE: 1.3050, 1. 3300-50

BIAS: BEARISH

MOMENTUM: VOLATILE

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