Crude Oil Settles Higher, Gains 1.8% In The Week

Trading 14 sept 2018 Commentaire »

A day after plunging sharply following a report from the International Energy Agency that showed a record crude output in August, crude oil prices edged higher on Friday, amid concerns about possible supply disruptions due to the impact of hurricane Florence and on upcoming U.S. sanctions on Iranian oil.

However, crude oil's gains were just modest as traders were weighing the likely impact of U.S.-China trade dispute on oil demand. According to reports, U.S. President Donald Trump has instructed his aides to impose tariffs on $200 billion worth of Chinese products, adding to the already $50 billion in place. This follows his threat last week to impose another $267 billion on China's exports to the US.

Crude oil futures for October delivery settled at $68.99 a barrel, up $0.40, or 0.6%, for the session.

On Thursday, oil futures ended down $1.78, or 2.5%, at $68.59 a barrel.

For the week, oil futures gained 1.8%.

In its monthly report released on Thursday, the IEA also said that production may drop going forward due to falling output from Iran and Venezuela. It also said that oil prices could break out above $80 a barrel unless other producers act to offset deepening supply losses from these two countries.

It's uncertain whether Saudi Arabia and other producers will fill any shortfall, or how far they're able to do so, the agency said.

The monitoring committee set up by OPEC and non-OPEC producers is scheduled to meet in Algiers on September 23 to discuss a new production strategy.


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Treasuries Close Lower Following Slew Of Economic Data

Trading 14 sept 2018 Commentaire »

After ending the previous session roughly flat, treasuries moved to the downside during trading on Friday but closed off their lows of the session.

Bond prices initially came under pressure but regained some ground as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.1 basis points to 2.994 percent.

The ten-year yield pulled back after reaching a high above 3 percent but still ended the session at its highest closing level in over a month.

The early weakness among treasuries came following the release of a slew of U.S. economic data, including a report showing retail sales increased by much less than expected in August.

The Commerce Department said retail sales inched up by 0.1 percent in August after climbing by an upwardly revised 0.7 percent in July.

Economists had expected retail sales to rise by 0.4 percent compared to the 0.5 percent increase originally reported for the previous month.

Excluding the decrease in auto sales, retail sales rose by 0.3 percent in August after jumping by an upwardly revised 0.9 percent in July.

Ex-auto sales had been expected to climb by 0.5 percent compared to the 0.6 percent growth originally reported for the previous month.

Meanwhile, a separate report from the University of Michigan showed a much bigger than expected improvement in consumer sentiment in September.

The report said the consumer sentiment index jumped to 100.8 in September from 96.2 in August. Economists had expected the index to inch up to 96.6.

The Federal Reserve also released a report showing industrial production rose by slightly more than expected in the month of August.

The Fed said industrial production climbed by 0.4 percent in August, matching the upwardly revised increase in July.

Economists had expected production to rise by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.

Treasuries climbed off their worst levels after a report from Bloomberg said President Donald Trump has instructed aides to proceed with plans to impose tariffs on an additional $200 billion worth of Chinese goods.

Citing people familiar with the matter, Bloomberg said Trump held a meeting on Thursday to discuss the tariffs with top trade advisers, including Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer.

The latest news came on the heels of reports earlier this week indicting the U.S. has proposed holding a new round of trade talks with China in the near future.

Developments regarding trade may impact the markets next week along with reports on homebuilder confidence, housing starts and existing home sales.


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Dollar Recovering From Early Weakness

Trading 14 sept 2018 Commentaire »

The dollar got off to a weak start Friday, but has since recovered lost ground and turned positive. Traders are reacting to the rather large batch of U.S. economic data that was released this morning.

Partly reflecting a drop in sales by motor vehicle and parts dealers, the Commerce Department released a report on Friday showing retail sales in the U.S. increased by much less than expected in the month of August.

The Commerce Department said retail sales inched up by 0.1 percent in August after climbing by an upwardly revised 0.7 percent in July. Economists had expected retail sales to rise by 0.4 percent compared to the 0.5 percent increase originally reported for the previous month.

Import prices in the U.S. fell by much more than expected in the month of August, according to a report released by the Labor Department on Friday.

The Labor Department said import prices dropped by 0.6 percent in August after edging down by a revised 0.1 percent in July.

Economists had expected import prices to dip by 0.2 percent compared to the unchanged reading originally reported for the previous month.

The report also said export prices slipped by 0.1 percent in August after falling by 0.5 percent in July. Export prices had been expected to come in unchanged.

A report released by the Federal Reserve on Friday showed U.S. industrial production rose by slightly more than expected in the month of August. The Fed said industrial production climbed by 0.4 percent in August, matching the upwardly revised increase in July.

Economists had expected production to rise by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.

Business inventories in the U.S. increased in line with economist estimates in the month of July, the Commerce Department revealed in a report released on Friday. The Commerce Department said business inventories climbed by 0.6 percent in July after inching up by 0.1 percent in June.

Consumer sentiment in the U.S. has improved by much more than anticipated in the month of September, according to a report released by the University of Michigan on Friday. The report said the consumer sentiment index jumped to 100.8 in September from 96.2 in August. Economists had expected the index to inch up to 96.6.

The dollar slid to an early low of $1.1721 against the Euro Friday, but has since rebounded to around $1.1630.

The euro area trade surplus declined to the lowest level in four years in July, figures from Eurostat showed Friday. The trade surplus fell to a seasonally adjusted EUR 12.76 billion from EUR 16.47 billion in June. This was the lowest since June 2014, when the surplus totaled EUR 12.22 billion.

Eurozone's hourly labor cost increased at a slightly faster pace in the second quarter, data from Eurostat showed Friday. Hourly labor cost advanced 2.2 percent from previous year following a 2.1 percent rise in the first quarter.

The buck fell to a low of $1.3143 against the pound sterling Friday, but has since bounced back to around $1.3065.

The greenback has risen to around Y112.015 against the Japanese Yen this afternoon, from an early low of Y111.753.

Japan's industrial production declined more than estimated in July, final data from the Ministry of Economy, Trade and Industry showed Friday. Industrial output fell 0.2 percent on month in July instead of 0.1 percent drop estimated initially.


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Gold Falters After Early Gains, Settles Lower

Trading 14 sept 2018 Commentaire »

After edging higher early on in the session, as the dollar weakened on data that showed U.S. consumer price index rose an annual 2.7% in August, gold prices retreated to end on a negative note on Friday.

The 2.7% increase of consumer price inflation was below the 2.8% forecast and off the 2.8% rise in the previous period.

The dollar's retreat was also due to the Turkish central bank's decision on Thursday to hike its interest rates sharply to rein in inflation and prevent a currency crisis.

Although the inflation report and data showing a less than expected increase in retail sales growth in August raised expectations the Federal Reserve might not hike rates in December, encouraging industrial production and consumer sentiment reports subsequently pulled the dollar out from lower levels, which in turn resulted in the yellow metal drifting down into negative territory.

The dollar index, which had eased to 94.35, recovered and moved towards 95.00 subsequently.

Gold futures for December ended down $7.10, or 0.6%, at $1,201.10 an ounce. For the week, gold futures gained $0.70.

Silver futures for December settled at $14.142 an ounce, down $0.102 from previous close.

Copper futures for December ended down $0.370, at $2.460 per pound.

The U.S. Commerce Department said retail sales inched up by 0.1% in August after climbing by an upwardly revised 0.7% in July. Economists had expected retail sales to rise by 0.4% compared to the 0.5% increase originally reported for the previous month.

A report released by the Federal Reserve on Friday showed U.S. industrial production rose by slightly more than expected 0.4% in August, matching the upwardly revised increase in July. Economists had expected production to rise by 0.3% compared to the 0.1% uptick originally reported for the previous month.

The bigger than expected increase in production was partly due to a jump in utilities output, which surged up by 1.2% in August after inching up by 0.1% in July. Higher mining output also contributed to the increase in industrial production. Manufacturing output edged up by 0.2% in August after rising by 0.3% in July.

Meanwhile, consumer sentiment in the U.S. has improved by much more than anticipated in the month of September, according to a report released by the University of Michigan on Friday. The report said the consumer sentiment index jumped to 100.8 in September from 96.2 in August. Economists had expected the index to inch up to 96.6.

The bigger than expected increase by the headline index came as the current economic conditions index surged up to 116.1 in September from 110.3 in August.

The index of consumer expectations also rose to 91.1 in September from 87.1 in August, reaching its highest level since July of 2004.

Meanwhile, amid reports about a fresh round of trade talks between U.S. and China in the near future, there are reports that Donald Trump has instructed his aides to impose tariffs on $200 billion worth of Chinese products, adding to the already $50 billion in place. This follows his threat last week to impose another $267 billion on China's exports to the US.


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U.S. Consumer Sentiment Improves Much More Than Expected In September

Trading 14 sept 2018 Commentaire »

Consumer sentiment in the U.S. has improved by much more than anticipated in the month of September, according to a report released by the University of Michigan on Friday.

The report said the consumer sentiment index jumped to 100.8 in September from 96.2 in August. Economists had expected the index to inch up to 96.6.

The bigger than expected increase by the headline index came as the current economic conditions index surged up to 116.1 in September from 110.3 in August.

The index of consumer expectations also rose to 91.1 in September from 87.1 in August, reaching its highest level since July of 2004.

"While consumers were somewhat more likely to anticipate that the economic expansion would continue uninterrupted over the next five years, nearly as many expected another downturn sometime in the next five years," said Surveys of Consumers chief economist, Richard Curtin.

He added, "The largest problem cited on the economic horizon involved the anticipated negative impact from tariffs."

On the inflation front, one-year inflation expectations dipped to 2.8 percent in September from 3.0 percent in August, while five-year inflation expectations fell to 2.4 percent from 2.6 percent.


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U.S. Business Inventories Climb In Line With Estimates In July

Trading 14 sept 2018 Commentaire »

Business inventories in the U.S. increased in line with economist estimates in the month of July, the Commerce Department revealed in a report released on Friday.

The Commerce Department said business inventories climbed by 0.6 percent in July after inching up by 0.1 percent in June.

Manufacturing inventories showed a notable increase during the month, jumping by 0.8 percent in July after edging up by 0.2 percent in June.

The report said wholesale and retail inventories also rose by 0.6 percent and 0.5 percent, respectively, during the month.

The Commerce Department also said business sales crept up by 0.2 percent in July after rising by 0.3 percent in June.

Retail sales increased by 0.5 percent during the month, while manufacturing and wholesale sales came in unchanged.

With inventories rising by more than sales, the total business inventories/sales ratio ticked up to 1.34 in July from 1.33 in June.


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Intraday technical levels and trading recommendations for GBP/USD for September 14, 2018

Trading 14 sept 2018 Commentaire »

analytics5b9bd014518ce.png

The recent bearish momentum of the GBP/USD has shown signs of weakness since September 5 when an ascending bottom was established around 1.2800

The GBP/USD pair is currently testing the depicted downtrend line which comes to meet the pair around 1.3025-1.3090.

This price zone (1.3025-1.3090) corresponds to 50% and 61.8% Fibonacci levels where evident bearish rejection should be anticipated.

As long as successful bullish breakout above 1.3090 is maintained, further bullish advancement will probably occur towards 1.3200, 1.3250 and 1.3315.

On the other hand, any bearish decline below 1.3020 (50% Fibo level) will probably invalidate the bullish breakout scenario. Hence, the short-term outlook would remain bearish towards 1.2840 and 1.2780.

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Intraday technical levels and trading recommendations for EUR/USD for September 14, 2018

Trading 14 sept 2018 Commentaire »

analytics5b9bce66ccd43.png

On the weekly chart, the EUR/USD pair is demonstrating a Head and Shoulders pattern where the right shoulder is currently in progress.

Recently, the price level of 1.1500 offered temporary bullish recovery towards 1.1830. The EUR/USD bulls failed to pursue towards higher bullish targets. Instead, a descending high was established around 1.1800.

On the daily chart, for the bearish side of the market to be dominant, the pair needs quick bearish decline below 1.1500.

However, the price level of 1.1520 stood as a prominent demand level where the current bullish pullback was initiated.

The EUR/USD pair is currently trapped between the depicted technical levels (1.1750 - 1.1500).

Another bullish movement is expected towards the upper limit of the price range (1.1750) where bearish rejection should be anticipated.

On the other hand, any bullish breakout above 1.1750 will allow further bullish advance towards 1.1850.

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Dollar Little Changed After U.S. Consumer Sentiment Index

Trading 14 sept 2018 Commentaire »

The University of Michigan's consumer sentiment index for September has been released at 10.00 am ET Friday. The greenback changed little against its major rivals after the data.

The greenback was trading at 112.01 against the yen, 0.9663 against the franc, 1.3099 against the pound and 1.1671 against the euro around 10:02 am ET.


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*U.S. Consumer Sentiment Index Jumps To 100.8 In September

Trading 14 sept 2018 Commentaire »

U.S. Consumer Sentiment Index Jumps To 100.8 In September


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