Oil Settles Lower As Supplies Rise For 3rd Straight Week

Trading 11 oct 2018 Commentaire »

Crude oil prices tumbled on Thursday, extending previous session's losses, after official data showed U.S. crude stockpiles to have risen for a third straight week. Concerns about likely fall in crude demand due to the impact of trade war on the global economy, also weighed on oil.

Crude oil futures for November delivery ended down $2.20, or 3%, at $70.97 a barrel. On Wednesday, crude oil futures ended down 2.4%.

Data released by the U.S. Energy Information Administration this morning showed crude supplies in U.S. to have climbed by 6 million barrels for the week ended October 5. That was much larger than what analysts had expected.

However, the rise was smaller than what the American Petroleum Institute had reported in the data released on Wednesday.

Gasoline stockpiles were up by 1 million barrels last week, while distillate stockpiles declined by 2.7 million barrels, the EIA report revealed.

According to a report released by the American Petroleum Institute on Wednesday evening, U.S. crude inventories climbed by 9.7 million barrels to 410.7 million last week. Analysts had expected crude inventories to increase by 2.6 million barrels.

With the U.S.-China trade war tensions escalating by the day and the International Monetary Fund lowering global growth forecast, traders are betting global crude demand will see a drop in the near term.


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Treasuries Move Significantly Higher Following Consumer Prices Data

Trading 11 oct 2018 Commentaire »

After ending the previous session modestly lower, treasuries showed a significant move to the upside over the course of the trading day on Thursday.

Bond prices moved higher early in the session and climbed more firmly into positive territory as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 9.2 basis points to 3.133 percent.

Treasuries initially benefited from the release of a report from the Labor Department showing consumer prices rose by less than expected in the month of September.

The Labor Department said its consumer price index inched up by 0.1 percent in September after rising by 0.2 percent in August. Economists had expected prices to increase by another 0.2 percent.

Excluding food and energy prices, core consumer prices also crept up by 0.1 percent in September, matching the uptick seen in the previous month. Core prices had been expected to rise by 0.2 percent.

The report also said the annual rate of consumer price growth slowed to 2.3 percent in September from 2.7 percent in August, while the annual rate of core consumer price growth was unchanged at 2.2 percent.

"Overall, the September figures confirm that core inflation has lost a little momentum in recent months, and the stronger dollar will put downward pressure on goods prices over the coming year or so," said Michael Pearce, Senior U.S. Economist at Capital Economics.

He added, "But with activity growth still strong and underlying inflation in the services sector still trending higher, we suspect the Fed will continue to raise interest rates over the coming quarters."

A separate report released by the Labor Department unexpectedly showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended October 6th.

The report said initial jobless claims rose to 214,000, an increase of 7,000 from the previous week's unrevised level of 207,000. Economists had expected jobless claims to edge down to 206,000.

Treasuries saw some further upside in afternoon trading following the release of the results of the Treasury Department's auction of $15 billion worth of thirty-year bonds.

The thirty-year bond auction drew a high yield of 3.344 percent and a bid-to-cover ratio of 2.42, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.32.

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

The slightly above average demand for thirty-year bonds came after the three-year and ten-year note auctions on Wednesday both attracted below average demand.

Looking ahead to Friday, traders are likely to keep an eye on reports on import and export prices in September and consumer sentiment in October.


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Dollar Losing Ground After Slowdown In Consumer Inflation

Trading 11 oct 2018 Commentaire »

The dollar got off to a positive start Thursday, but turned lower against its major rivals following the release of today's inflation report for the month of September.

Consumer prices in the U.S. showed a slight uptick in the month of September, according to a report released by the Labor Department on Thursday. The Labor Department said its consumer price index inched up by 0.1 percent in September after rising by 0.2 percent in August. Economists had expected prices to increase by another 0.2 percent.

A report released by the Labor Department on Thursday unexpectedly showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended October 6th. The report said initial jobless claims rose to 214,000, an increase of 7,000 from the previous week's unrevised level of 207,000. Economists had expected jobless claims to edge down to 206,000.

The dollar reached an early high of $1.1531 against the Euro Thursday, but has since dropped to a 1-week low of $1.1595.

France's consumer price inflation eased in September, latest figures revealed on Thursday, confirming the initial estimates. The consumer price index rose 2.2 percent year-on-year following a 2.3 percent increase in August, the statistical office INSEE said.

The buck rose to an early high of $1.3182 against the pound sterling Thursday, but has since pulled back to a 2-week low of $1.3235.

The greenback climbed to a high of Y112.533 against the Japanese Yen Thursday, but has since eased back to a 3-week low of around Y111.925.

Producer prices in Japan were up 0.3 percent on month in September, the Bank of Japan said on Thursday, following the flat reading in August. On a yearly basis, producer prices were up 3.0 percent - unchanged from the previous two months.

Overall bank lending in Japan was up 2.3 percent on year in September, the Bank of Japan said on Thursday, coming in at 528.660 trillion yen. That exceeded expectations for an increase of 2.2 percent, which would have been unchanged from the previous month.


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Gold Futures Settle At 10-week High

Trading 11 oct 2018 Commentaire »

Gold prices rose sharply on Thursday, as traders rushed to the safe haven investment after equity markets across the globe tumbled amid mounting worries about global economic growth.

Concerns over growth outlook and rising bond yields knocked the wind out of stocks on Wall Street on Wednesday and the resultant sell-off in Asian markets on Thursday set up a weak start for European stocks. Today, the U.S. market is seeing some wild swings with investors staying wary of building up positions due to growth concerns.

Gold futures for December ended up $34.20, or 2.9%, at $1,227.60 an ounce, the highest settlement since August 1. On Wednesday, gold futures ended up $1.90, or 0.2%, at $1,193.40 an ounce.

Silver futures for December ended up $0.280, at $14.606 an ounce.

Copper futures for December settled at $2.8030 per pound, gaining $0.0225 for the session.

The recent report from the International Monetary Fund that lowered its growth forecast for the global economy, higher U.S. interest rates and concerns about slowing Chinese economy amidst the ongoing U.S.-China trade war, have taken a heavy toll of stocks in the U.S. stock markets and almost all the markets across Asia and Europe.

In U.S. economic news, a report released by the Labor Department today showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended October 6th. The report said initial jobless claims rose to 214,000, an increase of 7,000 from the previous week's unrevised level of 207,000. Economists had expected jobless claims to edge down to 206,000.

Another report from the Labor Department showed consumer prices in the U.S. to have edged up slightly in the month of September. The data showed consumer price index inched up by 0.1% last month, after rising by 0.2% in August. Economists had expected prices to increase by another 0.2%.

The report said the annual rate of consumer price growth slowed to 2.3% in September from 2.7% in August, while the annual rate of core consumer price growth was unchanged at 2.2%.

U.S.-China trade tensions are escalating following U.S. President Donald Trump repeating a threat to impose tariffs on $267 billion worth of additional Chinese imports if Beijing retaliates for the recent levies and other measures.


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Thirty-Year Bond Auction Attracts Slightly Above Average Demand

Trading 11 oct 2018 Commentaire »

After yesterday's auctions of $36 billion worth of three-year notes and $23 billion worth of ten-year notes, the Treasury Department finished off this week's series of long-term securities auctions with the sale of $15 billion worth of thirty-year bonds on Thursday.

The thirty-year bond auction drew a high yield of 3.344 percent and a bid-to-cover ratio of 2.42.

Last month, the Treasury also sold $15 billion worth of thirty-year bonds, drawing a high yield of 3.088 percent and a bid-to-cover ratio of 2.34.

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

The ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.32.

While the thirty-year bond auction attract slightly above average demand, the three-year and ten-year note auctions on Wednesday attracted below average demand.


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*U.S. Crude Oil Inventories Climb By 6 Million Barrels In Week Ended 10/5

Trading 11 oct 2018 Commentaire »

U.S. Crude Oil Inventories Climb By 6 Million Barrels In Week Ended 10/5


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Malaysia's Industrial Output Growth Remains Firm In August

Trading 11 oct 2018 Commentaire »

Malaysia's industrial production growth remained robust in August, the Department of Statistics reported on Thursday.

Industrial output grew 2.2 year-on-year in August, compared to forecasts for a 2.3 percent growth.

This follows a 2.6 percent gain in July.

The growth in August was driven by an increase of 4.3 percent in manufacturing and 4.0 percent in electricity. Meanwhile, mining output recorded a decline of 4.6 percent.

On a monthly basis, industrial production fell 0.4 percent, reversing a 2.6 percent rise in the previous month.


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BITCOIN Analysis for October 11, 2018

Trading 11 oct 2018 Commentaire »

Bitcoin impulsively sank below $6,500 area which was quite a bit of a surprise for the bulls. As the price is residing above $6,000 area currently, the bullish bias is still valid in the market. However, after the impulsive crash below $6,500 area, the price is currently correcting itself with no sign of any Bullish Divergence. Meanwhile, the price is expected to move a bit lower, most probably towards $6,000 area before it starts to jump higher with a target towards $6,500 in the future. As the price remains above $6,000 area, the bullish bias is expected to continue.

SUPPORT: 6,000

RESISTANCE: 6,500

BIAS: BEARISH

MOMENTUM: VOLATILE

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U.S. Dollar Slides On Slowing Consumer Inflation

Trading 11 oct 2018 Commentaire »

The U.S. dollar lost ground against its key counterparts in the European session on Thursday, following the release of data showing an unexpected rise in weekly jobless claims last week and a slowdown in consumer inflation for September, which eased concerns about more aggressive path for rate hikes by the Federal Reserve.

Data from the Labor Department showed that the consumer price index inched up by 0.1 percent in September after rising by 0.2 percent in August. Economists had expected prices to increase by another 0.2 percent.

Excluding food and energy prices, core consumer prices also crept up by 0.1 percent in September, matching the uptick seen in the previous month. Core prices had been expected to rise by 0.2 percent.

The report also said the annual rate of consumer price growth slowed to 2.3 percent in September from 2.7 percent in August, while the annual rate of core consumer price growth was unchanged at 2.2 percent.

A separate report released by the Labor Department unexpectedly showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended October 6th.

The report said initial jobless claims rose to 214,000, an increase of 7,000 from the previous week's unrevised level of 207,000. Economists had expected jobless claims to edge down to 206,000.

Treasury yields have moved notably lower following the release of the data, with the yield on the benchmark ten-year note sliding by 5.6 basis points to 3.169 percent.

The currency has been trading lower in the Asian session, following the criticism by U.S. President Donald Trump over the faster pace of rate hikes by the Fed.

The greenback lost 0.4 percent versus the pound, falling to near a 3-week low of 1.3246. The pair had ended Wednesday's trading at 1.3188. The greenback is seen finding support around the 1.35 area.

The greenback depreciated to 1.1599 against the euro, a level unseen since October 1, and represented a 0.7 percent slide from a low of 1.1518 touched at 5:00 pm ET. The greenback is poised to target support around the 1.17 area.

The greenback declined to an 8-day low of 0.6523 against the kiwi, falling 1.2 percent from a low of 0.6445 hit at 5:00 pm ET. The pair was valued at 0.6446 when it had closed deals on Wednesday. On the downside, 0.68 is possibly seen as the next support level for the greenback.

The greenback dropped to 0.7129 against the aussie and 1.3025 against the loonie, after rising to 0.7046 and 1.3066, respectively in early deals. If the greenback falls further, it may find support around 0.725 against the aussie and 1.28 against the loonie.

The greenback fell back to 0.9858 against the franc, a pip short of an 8-day low of 0.9857 seen at 10:00 pm ET. The next possible support for the greenback is seen around the 0.97 level.

On the flip side, the greenback bounced off to 112.42 against the yen, from more than a 3-week low of 111.97 hit at 9:45 pm ET. The greenback is likely to challenge resistance around the 114.00 level.

Data from the Bank of Japan showed that Japan overall bank lending rose 2.3 percent on year in September, coming in at 528.660 trillion yen.

That exceeded expectations for an increase of 2.2 percent, which would have been unchanged from the previous month.


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Fundamental Analysis of USD/CHF for October 11, 2018

Trading 11 oct 2018 Commentaire »

USD/CHF has been quite impressive with the recent bullish momentum which lead the price to reside above 0.9850 area with a daily close. The price dipped a bit lower this week due to worsethan-expected economic reports recently in the US which dented the overall gains of USD against CHF.

After the recent rate hike from 2.00% to 2.25%, USD gained impulsive momentum over CHF. However, USD lost steam after downbeat NFP readings. Today US CPI report was published with a decrease to 0.1% which was expected to be unchanged at 0.2% and Core CPI was unchanged at 0.1% which was expected to increase to 0.2%. Additionally, Unemployment Claims also increased to 214k which was expected to be unchanged at 207k.

On the CHF side, this week Unemployment Rate report was published with a decrease to 2.5% as expected from the previous value of 2.6%. The positive employment report pushed CHF lower as a retracement which may lead to certain short-term gains.

Meanwhile, ahead of Switzerland's PPI and Trade Balance reports to be published next week, any worse data from the US could empower CHF to sustain its momentum. Otherwise, any better than expected data from the US in the coming days may lead to continuation of the bullish trend.

Now let us look at the technical view. The price has pushed a bit lower after certain corrections and volatility above 0.9850 area. The price is residing above the dynamic level of 20 EMA and the event area of 0.9850 that indicates further bullish momentum for the future. However, a daily close below 0.9850 may lead the price to proceed lower towards 0.9700 area in the future. As the price resides above 0.9850 area, the bullish bias is expected to continue with a target towards 1.00 area.

SUPPORT: 0.9700, 0.9850

RESISTANCE: 0.9980-1.00

BIAS: BULLISH

MOMENTUM: VOLATILE

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