Oil Ends Higher Despite Jump In Weekly Crude Stockpiles

Trading 03 oct 2018 Commentaire »

Crude oil prices climbed higher and stayed at near four-year highs on Wednesday, amid reports about a drop in oil exports from Iran ahead of the upcoming U.S. sanctions and on expectations of short supply in the market next month.

Oil prices moved up despite U.S. Energy Information Administration's data that showed domestic crude supplies to have surged by about 8 million barrels in the week ended September 28. That was the largest weekly climb so far in the year.

In the week ended September 21, crude stockpiles had increased by 1.9 million barrels, after five consecutive weeks of declines.

According to EIA, gasoline stockpiles fell by 500,000 barrels last week, while distillate stockpiles declined by 1.8 million barrels. The agency also said that supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, increased by 1.699 barrels last week.

On Tuesday evening, the American Petroleum Institute released a report that showed U.S. crude oil stocks rose by 907,000 barrels last week.

Crude oil futures for November ended up $1.18, or 1.6%, at $76.41 a barrel on the New York Mercantile Exchange. On Tuesday, crude oil futures ended down $0.07, or 0.09%, at $75.23 a barrel.

With OPEC and some top major non-OPEC producers including Russia not having much spare capacity to increase output any significantly to offset the supply shortage due to the ban on Iranian oil, many analysts feel crude oil prices will move further up north by the end of this year.

Meanwhile, U.S. Secretary Mike Pompeo announced today that the United States is terminating the 1955 Treaty of Amity, its economic agreement with Iran.


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Treasuries Move Sharply Lower Following Upbeat Economic Data

Trading 03 oct 2018 Commentaire »

Treasuries showed a substantial move to the downside during trading on Wednesday following the release of some upbeat economic data.

Bond prices moved steadily lower throughout much of the session before climbing off their worst levels going into the close. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 10.5 basis points to 3.161 percent.

With the sharp increase on the day, the ten-year yield more than offset the drop seen in the previous session to reach its highest closing level in over seven years.

The sell-off by treasuries came following the release of a report from payroll processor ADP showing stronger than expected private sector job growth in the month of September.

ADP said private sector employment jumped by 230,000 jobs in September after climbing by an upwardly revised 168,000 jobs in August. Economists had expected employment to increase by about 185,000 jobs.

"The labor market continues to impress," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. "Both the goods and services sectors soared."

"The professional and business services industry and construction served as key engines of growth," she added. "They added almost half of all new jobs this month."

On Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs.

The report is expected to show employment climbed by about 188,000 jobs in September after jumping by 201,000 jobs in August.

A separate report from the Institute for Supply Management showed an unexpected acceleration in the pace of growth in U.S. service sector activity in September.

The ISM said its non-manufacturing index climbed to 61.6 in September from 58.5 in August, with a reading above 50 indicating growth in the service sector. Economists had expected the index to dip to 58.0.

With the unexpected increase, the ISM said the non-manufacturing index reached its highest level since the inception of the composite index in 2008.

"The non-manufacturing sector has had two consecutive months of strong growth since the 'cooling off' in July," said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.

"Overall, respondents remain positive about business conditions and the current and future economy," he added. "Concerns remain about capacity, logistics and the uncertainty with global trade."

Easing concerns about the new Italian government's spending plans may also have contributed to the weakness among treasuries.

A report from the Italian newspaper Corriere della Sera said the government expects to reduce the budget deficit from an estimated 2.4 percent of GDP in 2019 to 2.2 percent in 2020 and 2.0 percent in 2021.

Reports on weekly jobless claims and factory orders may attract attention on Thursday, although trading activity is likely to be somewhat subdued ahead of the release of the monthly jobs report on Friday.


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Gold Settles Lower As Dollar Rises On Upbeat Economic Data

Trading 03 oct 2018 Commentaire »

Gold prices edged lower on Wednesday, as the dollar edged up after data showed a bigger than expected increase in U.S. private sector employment in September.

Slightly easing worries about Italy's budget woes also contributed to the yellow metal's retreat from near two-week highs.

According to reports, the Italian government said it would cut its debt and not go on an excessive spending it had previously indicated. It is said the Italian government would bow to EU pressure to reduce its budget deficit to 2% of GDP by 2021.

The dollar index rose to 95.30, gaining about 0.2%.

Gold futures for December ended down $4.10, or 0.3%, at $1,202.90 an ounce.

On Tuesday, gold futures ended up $15.30, or 1.3%, at $1,207.00 an ounce, the highest settlement in nearly two weeks.

Silver futures for December ended lower by $0.023, at $14.670 an ounce.

Copper futures for December ended up $0.0275, at $2.8340 per pound.

A report from payroll processor ADP showed a much bigger than expected increase in U.S. private sector employment in the month of September. The report showed private sector employment jumped by 230,000 jobs in September after climbing by an upwardly revised 168,000 jobs in August. Economists had expected employment to increase by about 185,000 jobs compared to the addition of 163,000 jobs originally reported for the previous month.

According to a report released by the Institute for Supply Management, growth in U.S. service sector activity unexpectedly accelerated in the month of September, with the ISM non-manufacturing index climbing to 61.6 in the month, from 58.5 in August. Economists had expected the index to dip to 58.0.


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Dollar Trading Mixed Despite Solid Employment Data

Trading 03 oct 2018 Commentaire »

The dollar is up against the Euro and the Japanese Yen Wednesday afternoon, but is down slightly against the British pound. Concerns over the Italian budget have eased after the Italian newspaper Corriere della Sera reported that the government estimates a budget deficit of 2.4 percent of GDP for 2019, and then slash it to 2.2 percent for 2020.

Meanwhile, U.S. private sector employment came in better than expected this morning, ahead of Friday's all important U.S. jobs report.

Reflecting strong job growth in both the goods-producing and service-providing sectors, payroll processor ADP released a report on Wednesday showing a much bigger than expected increase in U.S. private sector employment in the month of September.

ADP said private sector employment jumped by 230,000 jobs in September after climbing by an upwardly revised 168,000 jobs in August.

Economists had expected employment to increase by about 185,000 jobs compared to the addition of 163,000 jobs originally reported for the previous month.

Growth in U.S. service sector activity unexpectedly accelerated in the month of September, according to a report released by the Institute for Supply Management on Wednesday.

The ISM said its non-manufacturing index climbed to 61.6 in September from 58.5 in August, with a reading above 50 indicating growth in the service sector. Economists had expected the index to dip to 58.0.

The dollar slid to an early low of $1.1593 against the Euro Wednesday, but has since rebounded to around $1.1520.

The euro area private sector expanded at the slowest pace in four months in September on weak manufacturing activity, survey data from IHS Markit showed Wednesday. The final composite output index dropped to 54.1 in September from 54.5 in August and slightly below the flash estimate of 54.2.

Eurozone retail sales dropped unexpectedly in August reflecting the weakness in food turnover, figures from Eurostat revealed Wednesday. Retail sales decreased 0.2 percent month-on-month, following a 0.6 percent drop in July. Economists had forecast a 0.2 percent increase for August. This was the second consecutive fall in sales.

The buck fell to a low of $1.3022 against the pound sterling Wednesday morning, but has since bounced back to around $1.2985.

British service sector growth remained strong in September, but the pace of expansion eased moderately since August, survey data from IHS Markit showed Wednesday. The IHS Markit/Chartered Institute of Procurement & Supply services Purchasing Managers' Index dropped to 53.9 in September from 54.3 in August. The score was also below the forecast of 54.0.

UK shop prices increased for the second consecutive month in September after five years of deflation, data from British Retail Consortium showed Wednesday. The shop price index climbed 0.2 percent year-on-year in September, following a 0.1 percent rise in August.

The greenback has jumped to an 11-month high of Y114.400 against the Japanese Yen this afternoon, from an early low of Y113.521.

The services sector in Japan continued to expand in September, but at a sharply slower pace, the latest survey from Nikkei revealed on Friday with a two-year low services PMI score of 50.2. That's down from 51.5 in August, although it remains barely above the boom-or-bust line of 50 that separates expansion from contraction.


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BITCOIN Analysis for October 3, 2018

Trading 03 oct 2018 Commentaire »

Bitcoin sank below $6,500 area today which triggered certain volatility in the market leading to indecision and corrections along the way. The price pushed below $6,500 area with strong impulsive bearish momentum which was immediately engulfed by the bullish pressure but it failed to push higher above $6,500 area with a daily close. The dynamic levels such as 20 EMA, Tenkan and Kijun line have been serving as resistance earlier which is expected to push the price much lower as the price remains below $6,500 area with a daily close. Though currently the price is pushing lower again just below $6,500 area, the bearish pressure is expected to strengthen again to push lower towards $6,000 area in the coming days.

SUPPORT: 6,000, 5,500

RESISTANCE: 6,500, 7,500

BIAS: BEARISH

MOMENTUM: VOLATILE

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Romania CB Holds Rates Steady

Trading 03 oct 2018 Commentaire »

Romania's central bank left its key interest rate unchanged on Wednesday, as it expects inflation to fall within its target in the coming months.

The board of the National Bank of Romania left its monetary policy rate unchanged at 2.50 percent, in line with economists' expectations.

The bank kept its deposit facility rate at 1.50 percent and the lending facility rate at 3.50 percent.

The central bank also decided to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions.

"The latest assessments reconfirm the outlook for the annual inflation rate to decline further towards the upper bound of the variation band of the target at the end of this year, in line with the August 2018 medium-term forecast," the bank said in a statement. Headline inflation rose to 5.1 percent in August, which was well above the bank's 1.5-3.5 percent target range. Wages continue to rise at double-digit rate and the GDP growth is above potential. The current account deficit widened to a five-year high. Capital Economics economist Liam Carson expressed concern that the monetary policy would not be tightened aggressively enough. "This could result in a build-up of economic imbalances and cause inflation expectations to become unanchored," the economist said. "We think that further interest rate hikes are needed to cool the economy," Carson added.

Capital Economics expects the NBR to raise the policy rate to 4.25 percent by the end of next year, which means more hikes than what markets currently forecast.


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*U.S. Crude Oil Inventories Jump By 8.0 Million Barrels In Week Ended 9/28

Trading 03 oct 2018 Commentaire »

U.S. Crude Oil Inventories Jump By 8.0 Million Barrels In Week Ended 9/28


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U.S. Service Sector Growth Unexpectedly Accelerates In September

Trading 03 oct 2018 Commentaire »

Growth in U.S. service sector activity unexpectedly accelerated in the month of September, according to a report released by the Institute for Supply Management on Wednesday.

The ISM said its non-manufacturing index climbed to 61.6 in September from 58.5 in August, with a reading above 50 indicating growth in the service sector. Economists had expected the index to dip to 58.0.

With the unexpected increase, the ISM said the non-manufacturing index reached its highest level since the inception of the composite index in 2008.

"The non-manufacturing sector has had two consecutive months of strong growth since the 'cooling off' in July," said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.

"Overall, respondents remain positive about business conditions and the current and future economy," he added. "Concerns remain about capacity, logistics and the uncertainty with global trade."

The unexpected increase by the headline index was partly due to a jump by the business activity index, which surged up to 65.2 in September from 60.7 in August.

The employment index also spiked to 62.4 in September from 56.7 in August, indicating a significant acceleration in the pace of job growth in the service sector.

Payroll processor ADP released a report earlier in the day showing employment in the service-providing sector shot up by 184,000 jobs in September.

While the report also said the new orders increased to 61.6 in September from 60.4 in August, the supplier deliveries index rose to 57.0 from 56.0, suggesting deliveries are slowing at a faster rate.

On the inflation front, the prices index climbed to 64.2 in September from 62.8 in August, pointing to the 31st consecutive month of price growth.

The ISM released a separate report on Monday showing a slightly bigger than expected slowdown in the pace of growth in the manufacturing sector in September, partly reflecting supply chain issues.

The purchasing managers index fell to 59.8 in September from 61.3 in August, while economists had expected the index to edge down to 60.3.

The slightly bigger than expected decrease by the index came after it reached its highest level in over fourteen years in the previous month.


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Slovenia Unemployment Falls Again

Trading 03 oct 2018 Commentaire »

Slovenia's unemployment figure for September decreased from both the previous month and a year ago, preliminary data from the government's Employment Service showed Wednesday.

The number of unemployed was 73,781 persons in September, which was 2,139 persons or by 2.8 persons less than in August.

Compared to the same month last year, the figure was lower by 7,209 persons or 8.9 percent.

During the first nine months of the year, the number of unemployed was 78,890 persons, which lower by 12.6 percent from the same period last year.


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Dollar Slightly Up Following ISM Non-manufacturing Survey

Trading 03 oct 2018 Commentaire »

The U.S. ISM non-manufacturing composite index for September has been released at 10:00 am ET Wednesday.

After the data, the greenback rose slightly against its major rivals.

The greenback was trading at 113.94 against the yen, 0.9888 against the franc, 1.1534 against the euro and 1.3004 against the pound around 10:01 am ET.


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