Crude Oil Ends Lower On Demand Growth Concerns

Trading 30 nov 2018 Commentaire »

Crude oil prices slipped on Friday as demand growth worries resurfaced after China reported its weakest factory growth in more than two years.

According to the latest survey from the National Bureau of Statistics, China's manufacturing sector was stagnant in November. The manufacturing PMI came in with a score of 50.0 for the month, falling short of expectations for a score of 50.2.

The bureau also said the non-manufacturing PMI came in with a score of 53.4 - also shy of expectations for 53.8 and down from 53.9 in the previous month. The composite index posted a score of 52.8, down from 53.1 a month earlier.

The U.S. President Donald Trump and Chinese President Jinping are expected to meet on Saturday, on the sidelines of the G20 summit. The U.S.-China trade war has resulted in a setback to global economic growth and a further escalation of disputes between the two countries could hurt global growth very badly.

According to reports, Trump said he was close to doing something on trade with Beijing but is not sure if he wanted to do it.

If the leaders of the two countries fail to reach a deal, then tariffs imposed by the U.S. on Chinese imports will rise to 25%, from the existing levy of 15%.

Crude oil futures for January settled at $50.93 a barrel, down $0.52, or 1%. Oil prices slipped to a low of $49.65 intraday. For the week, crude oil futures gained about 1%.

Rising crude output from the U.S. that saw crude stockpiles in the world's largest economy rising for ten straight weeks continues to weigh on the commodity.

According to recent reports, Russia, the second largest producer of crude oil, is likely to agree on a production cut in the upcoming OPEC and non-OPEC producers meet in Vienna next week.


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Treasuries Move Higher Amid Uncertainty About Trump-Xi Meeting

Trading 30 nov 2018 Commentaire »

After ending the previous session slightly higher, treasuries saw some further upside during the trading day on Friday.

Bond prices moved to the upside early in the day and remained positive throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.2 basis points to 3.013 percent.

With the continued decrease on the day, the ten-year yield ended the session at its lowest closing level in well over two months.

The strength among treasuries came as traders looked to the safe haven of bonds amid uncertainty about the outcome of the highly anticipated meeting between President Donald Trump and Chinese President Xi Jinping.

Trump and Xi are due to hold a dinner meeting on Saturday on the sidelines of the G20 summit in Buenos Aires, Argentina.

Ahead of the meeting, Trump has offered mixed remarks about the likelihood the U.S. and China will reach an agreement to end the escalating trade dispute between the world's two largest economies.

"I think we're very close to doing something with China, but I don't know that I want to do it because what we have right now is billions and billions of dollars coming into the United States in the form of tariffs or taxes. So I really don't know," Trump said Thursday before departing for the summit.

"But I will tell you that I think China wants to make a deal. I'm open to making a deal," he added. "But, frankly, I like the deal we have right now."

In U.S. economic news, MNI Indicators released a report unexpectedly showing a substantial acceleration in the pace of growth in Chicago-area business activity in the month of November.

MNI Indicators said its Chicago business barometer spiked to 66.4 in November after falling to 58.4 in October, with a reading above 50 indicating growth in business activity. Economists had expected the index to edge down to 58.0.

The unexpected jump reflected increases across all five of the barometer's subcomponents, with resurgent orders, solid output and higher unfinished orders the month's key drivers.

Reaction to news regarding the Trump-Xi meeting is likely to drive trading early next week, while the monthly jobs report is likely to be in focus toward the end of the week.

Traders are also likely to keep an eye on Congressional testimony by Federal Reserve Chairman Jerome Powell as well as reports on manufacturing and service sector activity, construction spending and factory orders.


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Dollar Rising Ahead Of G20 Summit

Trading 30 nov 2018 Commentaire »

The dollar is gaining ground against its major rivals Friday afternoon. Traders are looking ahead to the G20 summit this weekend and the highly anticipated meeting between President Trump and Chinese President Xi Jinping.

The two leaders will hold a meeting at the summit to discuss the trade dispute between the two nations. Trump and Xi are due to hold a dinner meeting on Saturday on the sidelines of the G20 summit in Buenos Aires, Argentina.

Meanwhile, after reporting a slowdown in the pace of growth in Chicago-area business activity over the three previous months, MNI Indicators released a report on Friday showing business activity unexpectedly recorded its most impressive performance so far this year in November.

MNI Indicators said its Chicago business barometer spiked to 66.4 in November after falling to 58.4 in October, with a reading above 50 indicating growth in business activity. Economists had expected the index to edge down to 58.0.

The dollar has climbed to around $1.1310 against the Euro Friday afternoon, from an early low of $1.14.

Eurozone's consumer price growth slowed to its lowest level in three months in November and the core inflation unexpectedly eased, preliminary figures from the Eurostat showed on Friday. The consumer price index rose 2 percent year-on-year following a 2.2 percent increase in October. The slowing was in line with economists' expectations.

Eurozone's unemployment rate remained unchanged at its lowest level in nearly 10 years for a third straight month in October, preliminary figures from the Eurostat showed on Friday. The seasonally adjusted jobless rate was 3.1 percent in October, where it has been since July. Economists had expected the figure to ease slightly to 8 percent.

German retail sales rebounded strongly in October, growing at the fastest pace in nearly one-and-a-half years, as a strong labor market and earnings growth supports spending despite a weaker economy. Retail sales grew 5 year-on-year following a revised 2.8 percent slump in September, preliminary data from the Federal Statistical Office showed on Friday. Economists had expected a gain of 1.4 percent.

Germany's import price growth unexpectedly accelerated in October after slowing in the previous month, figures from the Federal Statistical Office showed on Friday.

The import price index rose 4.8 percent year-on-year following a 4.4 percent in September. Economists had expected the figure to ease further to 4.2 percent.

Export prices rose 2 percent year-on-year after a 1.9 percent increase in the previous month.

France's consumer price inflation slowed more-than-expected in November to its lowest level in seven months, preliminary data from the statistical office INSEE showed on Friday. The consumer price index rose 1.9 percent year-on-year following a 2.2 percent increase in October. Economists had expected 2 percent inflation.

The buck slid to an early low of $1.2809 against the pound sterling Friday, but has since rebounded to around $1.2745.

UK house price inflation accelerated more-than-expected in November, after slowing in the previous month to its lowest level in over five year, but the outlook remains subdued due to the Brexit-linked uncertainty and a squeeze on household budgets.

The house price index rose 1.9 percent year-on-year following a 1.6 percent increase in October, data from the Nationwide Building Society showed on Friday.

In August and September, price growth was 2 percent. Economists had expected house price growth of 1.7 percent for November.

The greenback has risen to around Y113.615 against the Japanese Yen this afternoon, from an early low of Y113.342.

The unemployment rate in Japan came in at a seasonally adjusted 2.4 percent in October, the Ministry of Internal Affairs and Communications said on Friday. That exceeded expectations for 2.3 percent, which would have been unchanged from the September reading.

Industrial production in Japan was up a seasonally adjusted 2.9 percent on month in October, the Ministry of Economy, Trade and Industry said in Friday's preliminary reading. That exceeded forecasts for an increase of 1.1 percent following the 0.4 percent decline in September.


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Gold Settles Lower After Dollar Edges Up As G20 Meet Gets Underway

Trading 30 nov 2018 Commentaire »

Gold prices edged lower amid cautious trades on Friday, as the U.S. dollar gained in strength against most major currencies.

The focus is now on the G20 summit and the much awaited meeting of the U.S. President Donald Trump and Chinese President Xi Jinping, on the sidelines of the summit.

Markets across the globe await the Trump-Xi meeting and hope the two leaders would arrive at a deal that will help ease trade war concerns and prevent a global economic slowdown.

According to reports, Trump said he was close to doing something on trade with Beijing but is not sure if he wanted to do it.

In the event of Trump and Xi Jinping failing to reach a deal of sort to de-escalate the trade war, it is very likely that tariffs imposed by the U.S. on Chinese imports will raise to 25% in January. Additionally, there is a possibility of more imports from China, worth several hundreds of billion dollars, falling under the tax net.

Meanwhile, traders are also speculating on future rate hikes from the Federal Reserve. The minutes of the Fed's November meeting suggest a rate hike in December, but indicate there may not be three increases in rates next year as projected earlier. According to the minutes, a few participants expressed uncertainty about the timing of future increases.

Also, a couple of participants are noted to have warned that further increases could unduly slow economic growth and put downward pressure on inflation and inflation expectations.

The dollar index gained about 0.4% at 97.15.

Gold futures for February ended down $4.40, or 0.36%, at $1,226.00 an ounce. On Thursday, gold futures for February ended up $0.60, or 0.05%, at $1,230.40 an ounce. For the week, gold futures shed about 0.3%, while for the month, they climbed up 0.9%.

Silver futures for March settled at $14.217 an ounce.

In U.S. economic news, a report from MNI Indicators showed Chicago-area business activity unexpectedly recorded its most impressive performance in November. MNI Indicators said its Chicago business barometer spiked to 66.4 in November after falling to 58.4 in October. Economists had expected the index to edge down to 58.0.

The unexpected jump reflected increases across all five of the barometer's sub-components, with resurgent orders, solid output and higher unfinished orders the month's key drivers.


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Chicago Business Growth Unexpectedly Accelerates Sharply In November

Trading 30 nov 2018 Commentaire »

After reporting a slowdown in the pace of growth in Chicago-area business activity over the three previous months, MNI Indicators released a report on Friday showing business activity unexpectedly recorded its most impressive performance so far this year in November.

MNI Indicators said its Chicago business barometer spiked to 66.4 in November after falling to 58.4 in October, with a reading above 50 indicating growth in business activity. Economists had expected the index to edge down to 58.0.

The unexpected jump reflected increases across all five of the barometer's subcomponents, with resurgent orders, solid output and higher unfinished orders the month's key drivers.

The report said the new orders index jumped to its highest level since May of 2014 in November after easing over the two previous months, while the production index rose for the second straight month to reach a three-month high.

"Some firms said that while they were seeing increased orders in November, there were also demands from customers for earlier delivery on existing orders," said MNI Indicators.

The orders backlogs index also helped propel the business barometer higher in November, reversing October's decline and hitting a four-month high.

The report also said the employment index strengthened further during the month, hitting a three-month high and moving further clear of the neutral-50 mark.

Meanwhile, supply-side issues continued to weigh on firms, with the supplier deliveries index rising to its highest level since April of 2004 as some firms cited delays in sourcing deliveries from offshore suppliers.

MNI Indicators also said the prices paid index moderated in November but remained locked in a historically high range, continuing to signal elevated input expenses across firms.

"The MNI Chicago Business Barometer clipped a run of three consecutive declines in emphatic style in November, boosted primarily by resurgent orders - stronger than typically seen at this time of year and enough to push the Barometer to its best level since December," said Jamie Satchi, Economist at MNI Indicators.

He added, "However, many firms reported seeing the effects of higher China tariffs on their invoices for the first time, and voiced concern that business could be stifled going forward."


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*Chicago Business Barometer Jumps To 66.4 In November

Trading 30 nov 2018 Commentaire »

Chicago Business Barometer Jumps To 66.4 In November


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India Economic Growth Slows More Than Expected

Trading 30 nov 2018 Commentaire »

India's economic growth sharply slowed in the July to September quarter and the expansion was slower-than-expected, due to weaker farm output and private consumption.

Gross domestic product grew 7.1 percent year-on-year after an 8.2 percent expansion in the three months to June, figures from the Central Statistics Office showed Friday. Economists had forecast 7.5 percent growth.

The latest pace of growth was the weakest in three quarters.

Farm growth, on a value added basis, slowed to 3.8 percent from 5.3 percent. Mining and quarrying contracted 2.4 percent after a modest 0.1 percent gain.

Manufacturing growth nearly halved to 7.4 percent from 13.5 percent. Construction growth slowed to 7.8 percent from 8.7 percent. Financial services sector growth slowed to 6.3 percent from 6.5 percent.

Growth improved in the utility sector and the trade, hotel, transport, communication and broadcasting group.


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Loonie Falls As Canadian Economy Contracts Unexpectedly

Trading 30 nov 2018 Commentaire »

The Canadian dollar drifted lower against its major counterparts in the European session on Friday, as a data showed that Canadian economy shrank unexpectedly in September driven primarily by lower output across all goods-producing industries.

Data from Statistics Canada showed that GDP dropped 0.1 percent on a seasonally adjusted monthly basis from last month, when it rose 0.1 percent. The rate was forecast to remain unchanged.

On a year-on-year basis, GDP grew 0.5 percent in the third quarter, following a 0.7 percent increase in the second quarter.

The annualized rate of GDP slowed to 2.0 percent from 2.9 percent seen in the second quarter. Economists were looking for a growth of 2.0 percent.

In a separate release, the Statistics Canada said that the industrial product price index rose 0.2 percent month-on-month in October, unchanged from the previous month. Economists had forecast a 0.5 percent fall.

The raw materials price index fell 2.4 percent on a monthly basis after falling 1.0 percent in the previous month. Economists were looking for a decline of 5.3 percent.

Oil prices resumed declines amid worries about falling demand after China reported its weakest factory growth in more than two years.

Crude for January delivery dropped $0.87 to 50.64 per barrel.

The currency traded mixed against its major counterparts in the Asian session. While it fell against the greenback and the euro, it held steady against the aussie and the yen.

The loonie slipped to a 2-day low of 1.3325 against the greenback, off an early high of 1.3273. The next possible support for the loonie is seen around the 1.35 level.

The loonie fell back to 1.5141 against the euro, not far from a 9-day low of 1.5149 seen at 6:15 am ET. On the downside, 1.53 is seen as the next likely support level for the loonie.

Preliminary figures from the Eurostat showed that Eurozone's consumer price growth slowed to its lowest level in three months in November and the core inflation unexpectedly eased.

The consumer price index rose 2 percent year-on-year following a 2.2 percent increase in September. The slowing was in line with economists' expectations.

The loonie pared gains to 85.20 against the yen and 0.9732 against the aussie, from its early highs of 85.46 and 0.9708, respectively. The loonie is seen finding support around 84.00 against the yen and 0.99 against the aussie.


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Loonie Drops After Canada GDP Data

Trading 30 nov 2018 Commentaire »

After the release of Canada GDP data for September at 8:30 am ET Friday, the loonie fell against its major rivals.

The loonie was trading at 85.32 against the yen, 1.5127 against the euro, 0.9724 against the aussie and 1.3307 against the greenback around 8:33 am ET.


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*Canadian Industrial Product Price Index Rose 0.2% In October

Trading 30 nov 2018 Commentaire »

Canadian Industrial Product Price Index Rose 0.2% In October


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