Crude Oil Futures End Flat, But Gain 1.5% For The Week

Trading 05 oct 2018 Commentaire »

Crude oil prices retreated after edging higher early on in the session on Friday, as traders weighed the prospects of possible drop in supply post implementation of sanctions on Iran from early November, and the decision of Russia and Saudi Arabia to increase output till December.

Although Russia and Saudi Arabia reportedly made a secret pact in September to increase output till December to partially make up for the loss of Iranian oil, it is feared that with little spare capacity at their disposal, OPEC and major non-OPEC producers may not be able to offset the likely drop in supply from early November.

Crude oil futures for November ended at $74.34 a barrel, gaining a penny.

On Thursday, crude oil ended down $2.08, or 2.7%, at $74.33 a barrel, recording its worst single-session loss in about three weeks.

Crude oil futures added 1.5% in the week, moving up for a fourth straight week.

The latest data from the Energy Information Administration showed crude supplies in U.S. to have surged by about 8 million barrels to about 404 million barrels in the week ended September 28. That was the largest weekly climb since March 2017. A week earlier, 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.

Traders now await the weekly oil rig count report from Baker Hughes.


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Treasuries See Further Downside Following Mixed Employment Data

Trading 05 oct 2018 Commentaire »

Treasuries moved lower following the release of the monthly jobs report on Friday, extending the notable downward move seen over the two previous sessions.

Bond prices climbed off their worst levels going into the close but remained firmly in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.8 basis points to 3.225 percent.

With the increase on the day, the ten-year yield closed higher for the third consecutive session, reaching its highest closing level in well over seven years.

The continued weakness among treasuries came as traders reacted to the mixed monthly employment data by the Labor Department.

While the Labor Department report showed weaker than expected job growth in September, the jump in employment in August was upwardly revised and the unemployment rate fell to its lowest level since 1969.

The Labor Department said non-farm payroll employment climbed by 134,000 jobs in September, while economists had expected an increase of about 185,000 jobs.

However, the report also showed a significant upward revision to the pace of job growth in August, with employment spiking by 270,000 jobs compared to the originally reported jump of 201,000 jobs.

The Labor Department also said the unemployment rate fell to 3.7 percent in September from 3.9 percent in August. The unemployment rate had been expected to edge down to 3.8 percent.

With the bigger than expected decrease, the unemployment rate fell to its lowest level since hitting 3.5 percent in December of 1969.

Average hourly employee earnings rose by $0.08 or 0.3 percent to $27.24 in September, reflecting a year-over-year increase of 2.8 percent.

"Overall, a strong report that will keep the Fed firmly on track to continue raising rates once a quarter, with the next hike likely to come in December," said Michael Pearce, Senior U.S. Economist at Capital Economics.

A separate report from the Commerce Department showed the U.S. trade deficit widened in August, reflecting an increase in imports and a decrease in exports.

The Commerce Department said the trade deficit widened to $53.2 billion in August from a revised $50.0 billion in July. Economists had expected the trade deficit to widen to $53.5 billion.

Pearce said the data suggests "net trade is on track to be a substantial drag on GDP growth in the third quarter, which we expect will come in at 3.0% annualized."

The economic calendar for next week starts off relatively quiet due to the Columbus Day holiday, although reports on producer and consumer prices are likely to attract attention along with remarks by several Federal Reserve officials.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auctions of three-year and ten-year notes and thirty-year bonds.

The Treasury plans to sell $36 billion worth of three-year notes and $23 billion worth of ten-year notes next Wednesday and $15 billion worth of thirty-year bonds next Thursday.


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U.S. Consumer Credit Jumps More Than Expected In August

Trading 05 oct 2018 Commentaire »

Consumer credit in the U.S. jumped by much more than expected in the month of August, according to a report released by the Federal Reserve on Friday.

The Fed said consumer credit surged up by $20.1 billion in August after climbing by $16.6 billion in July. Economists had expected consumer credit to increase by $15.0 billion.

The report said non-revolving credit such as student loans and car loans climbed by $15.3 billion in August after increasing by $15.2 billion in the previous month.

Revolving credit, which largely reflects credit card debt, also rose by $4.8 billion in August after inching up by $1.4 billion in July.

Compared to the same month a year ago, consumer credit in August was up by 6.2 percent, as revolving and non-revolving credit increased by 5.6 percent and 6.4 percent, respectively.


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*U.S. Consumer Credit Jumps By $20.1 Billion In August

Trading 05 oct 2018 Commentaire »

U.S. Consumer Credit Jumps By $20.1 Billion In August


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Gold Settles Higher As Dollar Eases After Jobs Data

Trading 05 oct 2018 Commentaire »

Gold prices edged higher on Friday, bouncing back after two successive days of losses, as the dollar weakened a bit after data showed the U.S. economy saw a much less than expected addition in employment in September.

Data released by the U.S. Labor Department revealed that non-farm payroll employment climbed by 134,000 jobs in September, while economists had expected an increase of about 185,000 jobs.

However, the report also showed a significant upward revision to the pace of job growth in August, with employment spiking by 270,000 jobs compared to the originally reported jump of 201,000 jobs.

The Labor Department also said the unemployment rate fell to 3.7% in September from 3.9% in August. Economists had expected unemployment rate to edge down to 3.8%.

The dollar index was down by about 0.12%, at 95.35, after having advanced to 95.62 earlier in the day.

Gold futures for December ended up $4.00, or 0.3%, at $1,205.60 an ounce.

On Thursday, gold futures ended down $1.50, or 0.1%, at $1,201.60 an ounce. Gold futures gained about 0.8% in the week.

Silver futures for December settled at $14.649 an ounce, gaining $0.059 for the session.

Copper futures for December ended down $0.0145, at $2.7630 per pound.

According to data released by the Commerce Department, U.S. trade deficit widened in August, reflecting an increase in imports and a decrease in exports. The data said the trade deficit widened to $53.2 billion in August from a revised $50.0 billion in July. Economists had expected the trade deficit to widen to $53.5 billion.


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Dollar Losing Ground After Employment Growth Disappoints

Trading 05 oct 2018 Commentaire »

The dollar is down against its major rivals Friday afternoon, following the release of the mixed September jobs report. Employment in the U.S. rose by much less than expected in the month of September, according to a report released by the Labor Department on Friday.

The Labor Department said non-farm payroll employment climbed by 134,000 jobs in September, while economists had expected an increase of about 185,000 jobs.

However, the report also showed a significant upward revision to the pace of job growth in August, with employment spiking by 270,000 jobs compared to the originally reported jump of 201,000 jobs.

Despite the weaker than expected job growth, the Labor Department said the unemployment rate fell to 3.7 percent in September from 3.9 percent in August. The unemployment rate had been expected to edge down to 3.8 percent.

Reflecting an increase in imports and a decrease in exports, the Commerce Department released a report on Friday showed the U.S. trade deficit widened in the month of August. The Commerce Department said the trade deficit widened to $53.2 billion in August from a revised $50.0 billion in July.

Economists had expected the trade deficit to widen to $53.5 billion from the $50.1 billion originally reported for the previous month.

The dollar fell to a low of $1.1548 against the Euro Friday, but has since rebounded to around $1.1525.

Germany's factory orders rebounded in August as the decline in domestic demand was fully offset by robust foreign demand. Factory orders grew a more-than-expected 2 percent month-on-month in August, reversing a 0.9 percent drop in July, figures published by Destatis revealed Friday. Orders were forecast to rise 0.8 percent.

Germany's producer prices increased at the fastest pace in 11 months in August, figures from Destatis showed Friday. Producer prices advanced 3.1 percent year-on-year in August, following a 2.9 percent increase logged in July.

The buck rose to an early high of $1.3003 against the pound sterling Friday, but has since retreated to around $1.31.

UK house prices dropped unexpectedly in September, data from the Lloyds bank subsidiary Halifax and IHS Markit showed Friday. House prices decreased 1.4 percent in September from August, confounding expectations for an increase of 0.2 percent. This was also much bigger than the 0.2 percent drop posted in August.

The greenback reached an early high of Y114.100 against the Japanese Yen Friday, but has since eased back to around Y113.775.

The average of household spending in Japan was up 2.8 percent on year in August, the Ministry of Internal Affairs and Communications said on Friday, coming in at 292,481 yen. That beat expectations for an increase of 0.1 percent, which would have been unchanged from July.

Japan's leading index strengthened more-than-expected in August, preliminary data from the Cabinet Office showed Friday. The leading index, which measures the future economic activity, rose to 104.4 in August from 103.9 in July. The reading was forecast to rise moderately to 104.2.


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Dollar Higher As U.S. Jobless Rate Hits 49-year Low

Trading 05 oct 2018 Commentaire »

The U.S. dollar climbed against its most major opponents in the European session on Friday, trimming its recent losses, as the U.S. jobs data showed that the jobless rate fell to a 49-year low in September.

Data from the Labor Department showed that the unemployment rate fell to 3.7 percent in September from 3.9 percent in August. The unemployment rate had been expected to edge down to 3.8 percent.

With the bigger than expected decrease, the unemployment rate fell to its lowest level since December, 1969.

The non-farm payroll employment climbed by 134,000 jobs in September, while economists had expected an increase of about 185,000 jobs.

However, the report also showed a significant upward revision to the pace of job growth in August, with employment spiking by 270,000 jobs compared to the originally reported jump of 201,000 jobs.

Data from the Commerce Department showed that the U.S. trade deficit widened in August, reflecting an increase in imports and a decrease in exports.

The Commerce Department said the trade deficit widened to $53.2 billion in August from a revised $50.0 billion in July.

Economists had expected the trade deficit to widen to $53.5 billion from the $50.1 billion originally reported for the previous month.

The U.S. treasury yields rose following the data, with the benchmark yield on 10-year note rising by 3.2 percent, while that of 2-year equivalent was higher by 2.90 percent.

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

The greenback appreciated to 1.1484 against the euro, after having fallen to 1.1531 in the immediate aftermath of the data. If the greenback extends rise, 1.13 is possibly seen as its next resistance level.

Figures from Destatis showed that Germany's factory orders rebounded on foreign demand in August.

Factory orders grew by more-than-expected 2 percent on month in August, reversing a 0.9 percent drop in July. Orders were forecast to rise 0.8 percent.

The greenback spiked up to 0.9955 against the franc, its strongest since August 20. This follows a low of 0.9914 hit at 7:45 pm ET. On the upside, 1.01 is possibly seen as the next resistance for the greenback.

The greenback rebounded to 114.08 against the yen, from a low of 113.76 touched immediately after the release of the data. The greenback is seen finding resistance around the 115.00 mark.

Preliminary data from the Cabinet Office showed that Japan's leading index strengthened more-than-expected in August.

The leading index, which measures the future economic activity, rose to 104.4 in August from 103.9 in July. The reading was forecast to rise moderately to 104.2.

The greenback climbed to a weekly high of 1.2955 against the loonie, 2-1/2-year highs of 0.7053 against the aussie and 0.6450 against the kiwi, from its early lows of 1.2887, 0.7086 and 0.6486, respectively. The next possible resistance for the greenback is seen around 1.31 against the loonie, 0.69 against the aussie and 0.63 against the kiwi.

On the flip side, the greenback dropped to a 4-day low of 1.3089 against the pound, reversing from a low of 1.3003 hit at 1:30 am ET. The greenback is poised to target support around the 1.32 level.

Data from the Lloyds bank subsidiary Halifax and IHS Markit showed that UK house prices dropped unexpectedly in September.

House prices decreased 1.4 percent in September from August, confounding expectations for an increase of 0.2 percent. This was also much bigger than the 0.2 percent drop posted in August.

The U.S. consumer credit for August is slated for release at 3:00 pm ET.

At 12:40 pm ET, Federal Reserve Bank of Atlanta President Raphael Bostic speaks at the Financial Literacy and Economic Education Conference in Atlanta.


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U.S. Trade Deficit Widens As Imports Climb And Exports Fall

Trading 05 oct 2018 Commentaire »

Reflecting an increase in imports and a decrease in exports, the Commerce Department released a report on Friday showed the U.S. trade deficit widened in the month of August.

The Commerce Department said the trade deficit widened to $53.2 billion in August from a revised $50.0 billion in July.

Economists had expected the trade deficit to widen to $53.5 billion from the $50.1 billion originally reported for the previous month.

The wider trade deficit came as the value of imports climbed by 0.6 percent to $262.7 billion, while the value of exports slid by 0.8 percent to $209.4 billion.

The report showed notable increases in imports of automotive vehicles, parts, and engines and cell phones and other household goods.

Meanwhile, significant decreases in exports of soybeans, crude oil and other petroleum products were partly offset by increases in exports of drugs and artwork, antiques, stamps, and other collectibles.

The Commerce Department also said the goods deficit widened to $76.7 billion in August from $73.2 billion in July, while the services surplus rose to $23.5 billion from $23.1 billion.

Michael Pearce, Senior U.S. Economist at Capital Economics, said the trade data suggests "net trade is on track to be a substantial drag on GDP growth in the third quarter, which we expect will come in at 3.0% annualized."


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U.S. Job Growth Misses Estimates But Unemployment Rate Hits Lowest Since 1969

Trading 05 oct 2018 Commentaire »

Employment in the U.S. rose by much less than expected in the month of September, according to a report released by the Labor Department on Friday.

The Labor Department said non-farm payroll employment climbed by 134,000 jobs in September, while economists had expected an increase of about 185,000 jobs.

However, the report also showed a significant upward revision to the pace of job growth in August, with employment spiking by 270,000 jobs compared to the originally reported jump of 201,000 jobs.

The increase in employment in September partly reflected notable job gains in professional and business services, healthcare, and transportation and warehousing.

Employment in the goods-producing sector also climbed by 46,000 jobs, as the construction and manufacturing industries added 23,000 jobs and 18,000 jobs respectively.

On the other hand, the report showed decreases in employment in the retail and leisure and hospitality industries, partly reflecting evacuations related to Hurricane Florence.

Despite the weaker than expected job growth, the Labor Department said the unemployment rate fell to 3.7 percent in September from 3.9 percent in August. The unemployment rate had been expected to edge down to 3.8 percent.

With the bigger than expected decrease, the unemployment rate fell to its lowest level since hitting 3.5 percent in December of 1969.

The drop in the unemployment rate came as the household survey measure of employment showed a jump of 420,000 persons compared to the 150-person increase in the size of the labor force.

The report also said average hourly employee earnings rose by $0.08 or 0.3 percent to $27.24 in September. The year-over-year growth slowed to 2.8 percent from 2.9 percent.

"Wage growth is still on track to climb above 3% by the end of this year," said Michael Pearce, Senior U.S. Economist at Capital Economics.

He added, "Overall, a strong report that will keep the Fed firmly on track to continue raising rates once a quarter, with the next hike likely to come in December."


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U.S. Trade Deficit Widens Less Than Expected In August

Trading 05 oct 2018 Commentaire »

Reflecting an increase in imports and a decrease in exports, the Commerce Department released a report on Friday showed the U.S. trade deficit widened in the month of August.

The Commerce Department said the trade deficit widened to $53.2 billion in August from a revised $50.0 billion in July.

Economists had expected the trade deficit to widen to $53.5 billion from the $50.1 billion originally reported for the previous month.


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