Crude Futures End At Near 7-month Low

Trading 01 nov 2018 Commentaire »

Crude oil prices drifted lower on Thursday, extending losses to a fourth successive session, weighed by recent data that showed oil inventories in the U.S. rose for the sixth successive week, and on concerns the U.S.-China trade war would dent fuel demand in the near term.

Crude oil futures for December ended down $1.62, or 2.5%, at 63.69 a barrel, the lowest settlement in nearly seven months.

On Wednesday, crude oil futures ended down $0.87, or 1.3%, at $65.31 a barrel.

U.K. Brent crude declined by $2.70, or 3.6%, to $72.77 a barrel.

A report from Reuters said OPEC boosted oil production in October to the highest since 2016, as higher output led by the United Arab Emirates and Libya more than offset a cut in Iranian shipments due to U.S. sanctions.

The survey said OPEC pumped 33.31 million barrels per day in October. That was up 390,000 barrels per day, compared to September.

On Wednesday, the Energy Information Administration released a report that said U.S. crude oil inventories rose by 3.22 million barrels in the week to October 26, after a build of 6.35 million barrels in the previous week. With last week's increase, crude inventories in the U.S. rose for six successive weeks.

U.S. President Donald Trump said in a presidential memorandum on Wednesday that there was sufficient supply of petroleum and petroleum products for countries to "significantly" reduce their purchase of crude oil from Iran ahead of impending sanctions.


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Treasuries Show Modest Rebound Ahead Of Monthly Jobs Data

Trading 01 nov 2018 Commentaire »

After moving notably lower over the past few sessions, treasuries showed a modest move back to the upside during trading on Thursday.

Bond prices moved higher in morning trading and remained positive throughout the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.5 basis points to 3.144 percent.

The rebound by treasuries came as traders expressed some uncertainty ahead of the release of the Labor Department's closely watched monthly employment report on Friday.

Employment is expected to climb by 190,000 jobs in October after rising by 134,000 jobs in September, while the unemployment rate is expected to hold at 3.7 percent.

Treasuries may also have benefited from the release of a report from the Institute for Supply Management showing a bigger than expected slowdown in the pace of growth in manufacturing activity in the month of October.

The ISM said its purchasing managers index dropped to 57.7 in October from 59.8 in September, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to edge down to 59.0.

With the much bigger than expected decrease, the manufacturing index fell to its lowest level since hitting 57.3 in April.

A day ahead of the release of the more closely watched monthly jobs report, the Labor Department also released a report showing a slight drop in first-time claims for U.S. unemployment benefits in the week ended October 27th.

The report said initial jobless claims edged down to 214,000, a decrease of 2,000 from the previous week's revised level of 216,000.

Economists had expected jobless claims to come in unchanged compared to the 215,000 originally reported for the previous week.

A separate report from the Labor Department showed a slowdown in the pace of labor productivity growth in the third quarter.

The Labor Department said labor productivity climbed by 2.2 percent in the third quarter after jumping by 3.0 percent in the second quarter. Economists had expected productivity to increase by about 2.0 percent.

Meanwhile, the report said unit labor costs surged up by 1.2 percent in the third quarter after slumping by 1.0 percent in the second quarter. The rebound in labor costs matched economist estimates.

The Labor Department's closely watched monthly employment report is likely to be in the spotlight on Friday, overshadowing separate reports on the U.S. trade deficit and factory orders.


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Dollar Drops On Reports Of Brexit Agreement

Trading 01 nov 2018 Commentaire »

The dollar is losing ground against its major rivals Thursday afternoon. The currency was hard hit following reports that U.K. and the European Union have reached a tentative deal that would grant U.K. companies continued approach to European markets after Brexit.

The U.K. and EU negotiators entered into a tentative deal on all aspects of a future partnership on services, as well as the exchange of data, the Times of London reported.

A day ahead of the release of the more closely watched monthly jobs report, the Labor Department released a report on Thursday showing a slight drop in first-time claims for U.S. unemployment benefits in the week ended October 27th.

The report said initial jobless claims edged down to 214,000, a decrease of 2,000 from the previous week's revised level of 216,000. Economists had expected jobless claims to come in unchanged compared to the 215,000 originally reported for the previous week.

Labor productivity growth in the U.S. slowed in the third quarter, according to a report released by the Labor Department on Thursday, with the report also showing a rebound in unit labor costs.

The Labor Department said labor productivity climbed by 2.2 percent in the third quarter after jumping by 3.0 percent in the second quarter. Economists had expected productivity to increase by about 2.0 percent.

Meanwhile, the report said unit labor costs surged up by 1.2 percent in the third quarter after slumping by 1.0 percent in the second quarter. The rebound in labor costs matched economist estimates.

A report released by the Institute for Supply Management on Thursday showed a bigger than expected slowdown in the pace of growth in U.S. manufacturing activity in the month of October.

The ISM said its purchasing managers index dropped to 57.7 in October from 59.8 in September, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to edge down to 59.0.

Construction spending in the U.S. came in virtually unchanged in the month of September, according to a report released by the Commerce Department on Thursday.

The Commerce Department said construction spending in September was estimated at an annual rate of $1.33 trillion, nearly the same as the revised August estimate. Economists had expected spending to inch up by 0.1 percent.

The dollar has fallen to around $1.14 against the Euro Thursday afternoon, after reaching a 2 1/2 month high of around $1.13 yesterday.

Bank of England policymakers unanimously decided to maintain the monetary policy stance at the meeting, but signaled faster rate hikes than the current market expectations over Brexit uncertainties.

Although the impact of Brexit cannot be determined in advance, the Monetary Policy Committee vowed to respond to any material change in the outlook.

The buck has dropped to over a 1-week low of $1.3015 against the pound sterling Thursday afternoon, from an early high of $1.2764.

The UK manufacturing sector grew at the slowest pace in more than two years in October, survey results from IHS Markit and Chartered Institute of Procurement & Supply showed Thursday. The manufacturing Purchasing Managers' Index fell to a 27-month low of 51.1 in October from revised 53.6 in September. The score was forecast to drop moderately to 53.0.

The greenback reached a high of Y113 against the Japanese Yen Thursday morning, but has since eased back to around Y112.695.

The manufacturing sector in Japan continued to expand in October, and at a faster rate, the latest survey from Nikkei revealed on Thursday with a four-month high manufacturing PMI score of 52.5. That's up from 52.5 in September, and it moves farther above the boom-or-bust line of 50 that separates expansion from contraction.


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Gold Ends Sharply Higher As Dollar Tumbles

Trading 01 nov 2018 Commentaire »

Gold prices climbed higher on Thursday, rebounding from 3-week lows, as the dollar softened against major currencies after having rallied to 16-month high earlier this week.

The dollar index dropped to 96.22, losing about 0.9% as the currency lost ground against the euro and pound on reports the UK and the European Union clinched a tentative deal that would grant British companies continued approach to European markets after Brexit.

According to Times report, the UK and European Union negotiations agreed on a deal on all aspects of a future partnership on services, as well as the exchange of data.

The greenback lost ground against the Canadian loonie, the Aussie and the Japanese Yen as well.

Gold futures for December ended up $21.30, or about 1.8%, at $1,236.30 an ounce, the highest settlement since July 16. On Wednesday, gold futures ended down $10.30, or 0.8%, at $1,215.00 an ounce.

Silver futures for December were rising $0.495, at $14.777 an ounce, a few minutes ahead of close.

Copper futures for December were up $0.0625, at $2.7215 per pound.

According to the data released by the Labor Department, initial jobless claims in U.S. edged down to 214,000, a decrease of 2,000 from the previous week's revised level of 216,000. Economists had expected jobless claims to come in unchanged compared to the 215,000 originally reported for the previous week.

A separate report from the Labor Department said labor productivity climbed by 2.2% in the third quarter after jumping by 3% in the second quarter. Economists had expected productivity to increase by about 2%.

Meanwhile, the report said unit labor costs surged up by 1.2% in the third quarter after slumping by 1% in the second quarter.

A report from the Institute for Supply Management showed a bigger than expected slowdown in the pace of growth in manufacturing activity in the month of October. The ISM said its purchasing managers index dropped to 57.7 in October from 59.8 in September.

The market now awaits the crucial monthly jobs report from the Labor Department.


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U.S. Construction Spending Flat In September

Trading 01 nov 2018 Commentaire »

Construction spending in the U.S. came in virtually unchanged in the month of September, according to a report released by the Commerce Department on Thursday.

The Commerce Department said construction spending in September was estimated at an annual rate of $1.33 trillion, nearly the same as the revised August estimate. Economists had expected spending to inch up by 0.1 percent.

Reflecting an upward revision, the report showed construction spending climbed by 0.8 percent in August compared to the previously reported 0.1 percent uptick.

Construction spending was nearly unchanged in September, as an increase in spending on private construction was offset by a drop in spending on public construction.

The report said spending on private construction rose by 0.3 percent to a rate of $1.02 trillion, as spending on residential construction increased by 0.6 percent and spending on non-residential construction crept up by 0.1 percent.

On the other hand, spending on public construction spending fell by 0.9 percent to a rate of $309.1 billion, partly reflecting a 1.1 percent slump in spending on highway construction.

the Commerce Department said total construction spending in September was up by 7.2 percent compared to the same month a year ago.


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U.S. Manufacturing Index Drops More Than Expected In October

Trading 01 nov 2018 Commentaire »

A report released by the Institute for Supply Management on Thursday showed a bigger than expected slowdown in the pace of growth in U.S. manufacturing activity in the month of October.

The ISM said its purchasing managers index dropped to 57.7 in October from 59.8 in September, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to edge down to 59.0.

With the much bigger than expected decrease, the manufacturing index fell to its lowest level since hitting 57.3 in April.

"Consumption softened, with production and employment continuing to expand, but at lower levels compared to September," said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee.

He added, "Supplier labor issues and transportation difficulties continue to disrupt production, but at more manageable levels."

The bigger than expected decrease by the headline index came as the new orders slumped to 57.4 in October from 61.8 in September and the production index tumbled to 59.9 from 63.9

The employment index also slid to 56.8 in October from 58.8 in September, indicating a slowdown in the pace of job growth in the manufacturing sector.

Meanwhile, the report said the prices index jumped to 71.6 in October from 66.9 in September, pointing to a significant acceleration in the pace of price growth.

Next Monday, the ISM is scheduled to release a separate report on activity in the service sector in the month of October.


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Pound Extends Rally As BoE Maintains Rate; Asserts Gradual Rate Hikes

Trading 01 nov 2018 Commentaire »

The pound extended its early rally against its major opponents in the European session on Thursday, after the Bank of England kept its interest rates unchanged and reiterated that gradual rate increases would be needed in the coming years given uncertainty over Brexit.

The Monetary Policy Committee, led by Governor Mark Carney, voted 9-0 to keep the key rate unchanged at 0.75 percent.

The committee also unanimously decided to maintain the quantitative easing through asset purchases at GBP 435 billion.

Policymakers judged that the current stance of monetary policy remained appropriate.

The bank reiterated that any future increases in Bank Rate are likely to be at a gradual pace and to a limited extent.

On the economic front, survey results from IHS Markit and Chartered Institute of Procurement & Supply showed that the UK manufacturing sector grew at the slowest pace in more than two years in October.

The manufacturing Purchasing Managers' Index fell to a 27-month low of 51.1 in October from revised 53.6 in September. The score was forecast to drop moderately to 53.0.

The currency strengthened against its major counterparts in the Asian session, following a media report that the U.K. and the European Union have struck a tentative Brexit deal that would grant U.K. companies continued access to European markets.

The U.K. currency rose back to 1.2967 against the franc, just a few pips short of a 9-day high of 1.2971 touched at 4:15 am ET. The pair was valued at 1.2873 when it had closed deals on Wednesday. The pound is seen finding resistance around the 1.31 region.

Data from the Federal Statistical Office showed that Switzerland's consumer prices increased at a faster pace in October.

Inflation rose slightly to 1.1 percent from 1 percent in September. The rate came in line with expectations. Prices have been rising since January 2017.

The pound resumed its early gains against the greenback, advancing to an 8-day high of 1.2934. This marked a 1.4 percent gain from a low of 1.2761 seen at 5:00 pm ET. At Wednesday's close, the pair was worth 1.2766. Next key resistance for the pound is seen around the 1.31 level.

After a brief pause, the pound extended its early rally to an 8-day high of 145.97 versus the yen. The pound-yen pair had finished Wednesday's trading at 144.17. Further uptrend may take the pound to a resistance around the 148.00 area.

The latest survey from Nikkei showed that Japan manufacturing sector continued to expand in October, and at a faster rate, with a four-month high manufacturing PMI score of 52.5.

That's up from 52.5 in September, and it moves farther above the boom-or-bust line of 50 that separates expansion from contraction.

The pound was higher at 0.8826 against the euro, up from a low of 0.8864 set at 8:00 pm ET. The currency is thus heading to pierce a 9-day high of 0.8805 hit at 4:40 am ET. The euro-pound pair was quoted at 0.8862 at yesterday's close. Continuation of the pound's uptrend may see it finding resistance around the 0.86 level.

Looking ahead, U.S. ISM manufacturing index for October and construction spending for September are slated for release in the New York session.


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*U.S. Construction Spending Unchanged In September

Trading 01 nov 2018 Commentaire »

U.S. Construction Spending Unchanged In September


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BITCOIN Analysis for November 1, 2018

Trading 01 nov 2018 Commentaire »

Bitcoin has been quite impressive with recent bullish gains under overall extreme bearish pressure since it broke below $6,500. The price rebounded higher amid intense impulsive pressure which engulfed previous corrections and bearish momentum with ease. The price is currently residing above the dynamic levels like 20 EMA, Tenkan, and Kijun line while being inside the Kumo Cloud resistance. As the price remains above $6,000 with a daily close, the bullish bias is expected to continue further. If Kumo Cloud clears up bullish momentum, it will lead to more impulsive bullish pressure in the future.

SUPPORT: 6,000

RESISTANCE: 6,500, 7,500

BIAS: BULLISH

MOMENTUM: VOLATILE

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BoE Signals Faster Rate Hikes On Brexit Uncertainty

Trading 01 nov 2018 Commentaire »

Bank of England policymakers unanimously decided to maintain the monetary policy stance at the meeting, but signaled faster rate hikes than the current market expectations over Brexit uncertainties.

Although the impact of Brexit cannot be determined in advance, the Monetary Policy Committee vowed to respond to any material change in the outlook.

Inflation is forecast to stay above the 2 percent target over the coming two years and the bank kept growth projections broadly unchanged, while warning that much will depend on Brexit.

At November's MPC meeting, all policymakers including Governor Mark Carney, voted to keep the key rate unchanged at 0.75 percent. The committee also unanimously decided to maintain the quantitative easing through asset purchases at GBP 435 billion.

Policymakers judged that the current stance of monetary policy remained appropriate.

". were the economy to continue to develop broadly in line with the November Inflation Report projections, an ongoing tightening of monetary policy over the forecast period would be appropriate to return inflation sustainably to the 2 percent target at a conventional horizon," the bank said.

The implications for the appropriate path of monetary policy will depend on the balance of the effects on demand, supply and the exchange rate, the BOE added.

The MPC repeated that the monetary policy response to Brexit, whatever form it takes, will not be automatic and could be in either direction.

The bank also reiterated that any future increases in interest rate are likely to be at a gradual pace and to a limited extent.

The BoE assessed that the economic outlook will depend significantly on the nature of EU withdrawal, in particular the form of new trading arrangements, the smoothness of the transition to them and the responses of households, businesses and financial markets.

According to the latest quarterly Inflation Report, released Thursday, the outlook for growth over the forecast period was little changed. The economy is forecast to expand 1.3 percent this year and 1.7 percent in 2019.

CPI inflation was projected to be above the target for most of the forecast period, before reaching 2 percent by the end.

Further, policymakers viewed that business investment has been more subdued than previously anticipated, as the effect of Brexit uncertainty has intensified.

The BoE cautioned that an abrupt and disorderly withdrawal from EU could result in delays at borders, disruptions to supply chains, and more rapid and costly shifts in patterns of production, severely impairing the productive capacity of UK businesses.


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