Oil Futures End Sharply Lower On Demand Growth Concerns

Trading 14 déc 2018 Commentaire »

Crude oil prices fell sharply on Friday as worries about global economic growth increased after the latest batch of data from China showed a slower pace of growth in industrial production and retail sales.

Also, disappointing economic data from the eurozone and the European Central Bank President Mario Draghi's warning on Thursday that the "balance of risks is moving to the downside," and the lowering of GDP and inflation forecasts for the eurozone has raised concerns that energy demand is likely to drop notably in the near to medium term.

According to the data released on Friday, China's industrial production increased at the slowest pace in three years in November and retail sales in November great at the slowest pace since 2003.

Crude oil futures for January ended down $1.38, or 2.6%, $51.20 a barrel. On Thursday, crude oil futures ended up $1.43, or 2.8%, at $52.58 a barrel, on reports that Saudi Aramco has warned U.S. refiners to prepare for a sharp reduction in cargoes in the coming month.

Crude oil futures shed 2.7% in the week.

To prevent a supply glut and to halt the slide in prices of crude, the OPEC and non-OPEC members agreed on a proposal to cut output by 1.2 million barrels per day from January.

A report from International Energy Agency (IEA) on Thursday said that total global oil supply in November fell by 360,000 barrels a day on month, as a result of outages in the North Sea and Canada, as well as a decline in Russian output.

The Agency expects oil demand growth next year to remain unchanged at 1.4 million barrels a day, but expects supply deficit in the second quarter of the year. In November, the agency had predicted a surplus for the entire year.


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Oil Futures End Sharply Lower On Demand Growth Concerns

Trading 14 déc 2018 Commentaire »

Crude oil prices fell sharply on Friday as worries about global economic growth increased after the latest batch of data from China showed a slower pace of growth in industrial production and retail sales.

Also, disappointing economic data from the eurozone and the European Central Bank President Mario Draghi's warning on Thursday that the "balance of risks is moving to the downside," and the lowering of GDP and inflation forecasts for the eurozone has raised concerns that energy demand is likely to drop notably in the near to medium term.

According to the data released on Friday, China's industrial production increased at the slowest pace in three years in November and retail sales in November great at the slowest pace since 2003.

Crude oil futures for January ended down $1.38, or 2.6%, $51.20 a barrel. On Thursday, crude oil futures ended up $1.43, or 2.8%, at $52.58 a barrel, on reports that Saudi Aramco has warned U.S. refiners to prepare for a sharp reduction in cargoes in the coming month.

Crude oil futures shed 2.7% in the week.

To prevent a supply glut and to halt the slide in prices of crude, the OPEC and non-OPEC members agreed on a proposal to cut output by 1.2 million barrels per day from January.

A report from International Energy Agency (IEA) on Thursday said that total global oil supply in November fell by 360,000 barrels a day on month, as a result of outages in the North Sea and Canada, as well as a decline in Russian output.

The Agency expects oil demand growth next year to remain unchanged at 1.4 million barrels a day, but expects supply deficit in the second quarter of the year. In November, the agency had predicted a surplus for the entire year.


The material has been provided by InstaForex Company - www.instaforex.com

Treasuries Move To The Upside Amid Concerns About Global Economy

Trading 14 déc 2018 Commentaire »

After ending the previous session roughly flat, treasuries showed a modest move to the upside during the trading day on Friday.

Bond prices pulled back off their best levels in afternoon trading but managed to remain in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2 basis points to 2.891 percent.

The strength among treasuries came as traders looked to the safe haven of bonds amid renewed concerns about the outlook for global economic growth following the release of data showing disappointing industrial output and retail sales growth in China.

The latest batch of economic data showed Chinese industrial output grew at its slowest pace in nearly three years, increasing by 5.4 percent in November after growing by 5.9 percent a month earlier.

Meanwhile, retail sales in China grew 8.1 percent in November, the weakest growth since 2003. In October, retail sales were up 8.6 percent.

The slower pace of industrial output and retail sales growth was partly due to the impact of the ongoing trade dispute with the U.S.

President Donald Trump appeared to take credit for China's disappointing economic data in a post on Twitter on Friday.

"China just announced that their economy is growing much slower than anticipated because of our Trade War with them," Trump tweeted. "U.S. is doing very well. China wants to make a big and very comprehensive deal. It could happen, and rather soon!"

Trump seemed to reference China's recently confirmed decision to temporarily lower tariffs on vehicles made in the U.S. to 15 percent from 40 percent.

On the U.S. economic front, the Commerce Department released a report showing slightly weaker than expected retail sales growth in November due to a steep drop in sales by gas stations, although underlying retail sales growth remained strong.

The Commerce Department said retail sales edged up by 0.2 percent in November after spiking by an upwardly revised 1.1 percent in October.

Economists had expected retail sales to rise by 0.3 percent compared to the 0.8 percent increase originally reported for the previous month.

Meanwhile, the report said closely watched core retail sales, which exclude autos, gasoline, building materials and food services, increased by 0.9 percent in November after climbing by an upwardly revised 0.7 percent in October.

"Along with the continued strength of the labor market, the boost to real incomes from the recent plunge in gasoline prices appears to be providing a big support to spending growth, which could continue for a few more months," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "Nonetheless, with the earlier boost from tax cuts now fading and rising interest rates likely to become an increasing drag, we still expect consumption growth to slow next year."

A separate report from the Federal Reserve showed a much bigger than expected increase in industrial production in November, but manufacturing output was unchanged.

News regarding U.S.-China trade talks may continue to impact trading next week, although traders are also likely to turn their attention to the Federal Reserve's monetary policy announcement next Wednesday.

With the Fed widely expected to raise interest rates by another quarter point, the central bank's accompanying statement and forecasts will be closely scrutinized for clues about future rate hikes.

The announcement by the Fed may overshadow several key economic reports on homebuilder confidence, housing starts, existing home sales, durable goods orders and personal income and spending.


The material has been provided by InstaForex Company - www.instaforex.com

Treasuries Move To The Upside Amid Concerns About Global Economy

Trading 14 déc 2018 Commentaire »

After ending the previous session roughly flat, treasuries showed a modest move to the upside during the trading day on Friday.

Bond prices pulled back off their best levels in afternoon trading but managed to remain in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2 basis points to 2.891 percent.

The strength among treasuries came as traders looked to the safe haven of bonds amid renewed concerns about the outlook for global economic growth following the release of data showing disappointing industrial output and retail sales growth in China.

The latest batch of economic data showed Chinese industrial output grew at its slowest pace in nearly three years, increasing by 5.4 percent in November after growing by 5.9 percent a month earlier.

Meanwhile, retail sales in China grew 8.1 percent in November, the weakest growth since 2003. In October, retail sales were up 8.6 percent.

The slower pace of industrial output and retail sales growth was partly due to the impact of the ongoing trade dispute with the U.S.

President Donald Trump appeared to take credit for China's disappointing economic data in a post on Twitter on Friday.

"China just announced that their economy is growing much slower than anticipated because of our Trade War with them," Trump tweeted. "U.S. is doing very well. China wants to make a big and very comprehensive deal. It could happen, and rather soon!"

Trump seemed to reference China's recently confirmed decision to temporarily lower tariffs on vehicles made in the U.S. to 15 percent from 40 percent.

On the U.S. economic front, the Commerce Department released a report showing slightly weaker than expected retail sales growth in November due to a steep drop in sales by gas stations, although underlying retail sales growth remained strong.

The Commerce Department said retail sales edged up by 0.2 percent in November after spiking by an upwardly revised 1.1 percent in October.

Economists had expected retail sales to rise by 0.3 percent compared to the 0.8 percent increase originally reported for the previous month.

Meanwhile, the report said closely watched core retail sales, which exclude autos, gasoline, building materials and food services, increased by 0.9 percent in November after climbing by an upwardly revised 0.7 percent in October.

"Along with the continued strength of the labor market, the boost to real incomes from the recent plunge in gasoline prices appears to be providing a big support to spending growth, which could continue for a few more months," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "Nonetheless, with the earlier boost from tax cuts now fading and rising interest rates likely to become an increasing drag, we still expect consumption growth to slow next year."

A separate report from the Federal Reserve showed a much bigger than expected increase in industrial production in November, but manufacturing output was unchanged.

News regarding U.S.-China trade talks may continue to impact trading next week, although traders are also likely to turn their attention to the Federal Reserve's monetary policy announcement next Wednesday.

With the Fed widely expected to raise interest rates by another quarter point, the central bank's accompanying statement and forecasts will be closely scrutinized for clues about future rate hikes.

The announcement by the Fed may overshadow several key economic reports on homebuilder confidence, housing starts, existing home sales, durable goods orders and personal income and spending.


The material has been provided by InstaForex Company - www.instaforex.com

Gold Futures Settle Lower As Dollar Stays Firm

Trading 14 déc 2018 Commentaire »

Gold prices edged lower on Friday as the U.S. dollar gained in strength against most major currencies, riding on fairly encouraging U.S. retails sales data.

Besides the retail sales data, a likely 25-basis points hike in U.S. interest rate next week supported dollar's uptick.

The Federal Reserve, which is scheduled to announced its monetary policy on December 19th, is widely expected to raise interest rate for the fourth time this year. However, contrary to earlier indications and expectations, the central bank is unlikely to keep hiking rates in the coming year.

The recent comments from the Fed Chair Jerome Powell that interest rates in the U.S. are currently "just below" neutral and remarks by a couple of Fed officials that there could be a pause in rate hike sometime next year took some shine off the greenback in some of the recent sessions and pushed gold prices up a bit.

Weak economic data from the eurozone too contributed to the greenback's rise. The dollar index rose to a high of 97.71 before giving up some gains. At 97.44, the index was up by about 0.4% about an hour ago.

Gold futures for February ended down $6.00, or 0.5%, at $1,241.40 an ounce.

On Thursday, gold futures ended lower by $2.60, or 0.2%, at $1,247.40 an ounce. For the week, gold futures shed about 0.9%.

Silver futures for March settled at $14.637 an ounce, down $0.218 from previous close of $14.855 an ounce.

Copper futures for March ended at $2.7625, down $0.0045 from Thursday's close of $2.7670 per pound.

According to the report from the Commerce Department, retail sales growth in November was slightly weaker than expected due to a steep drop in sales by gas stations, although underlying retail sales growth remained strong. The report said retail sales edged up by 0.2% in November after spiking by an upwardly revised 1.1% in October.

Economists had expected retail sales to rise by 0.3% compared to the 0.8% increase originally reported for the previous month.

Meanwhile, the report said closely watched core retail sales, which exclude autos, gasoline, building materials and food services, increased by 0.9 percent in November after climbing by an upwardly revised 0.7 percent in October.

A separate report from the Federal Reserve said industrial production climbed by 0.6% in November compared to economist estimates for 0.3% growth. However, the industrial production data for October was revised to show a 0.2% drop compared to the previously reported 0.1% uptick.


The material has been provided by InstaForex Company - www.instaforex.com

Dollar Trading Mixed As Weekend Approaches

Trading 14 déc 2018 Commentaire »

The dollar is up against its major European rivals Friday afternoon, but has turned lower against the Japanese Yen after paring early gains. Disappointing economic data from China and Europe has helped to drive the buck higher as the weekend approaches. Meanwhile, a trio of U.S. economic reports this morning proved mixed.

With a steep drop in sales by gas stations partly offsetting notable growth at other stores, the Commerce Department released a report on Friday showing a slightly smaller than expected increase in U.S. retail sales in the month of November.

The Commerce Department said retail sales edged up by 0.2 percent in November after spiking by an upwardly revised 1.1 percent in October. Economists had expected retail sales to rise by 0.3 percent compared to the 0.8 percent increase originally reported for the previous month.

Reflecting jumps in utilities and mining output, the Federal Reserve released a report on Friday showing a much bigger than expected increase in U.S. industrial production in the month of November. The Fed said industrial production climbed by 0.6 percent in November compared to economist estimates for 0.3 percent growth.

A report released by the Commerce Department on Friday showed business inventories in the U.S. increased in line with economist estimates in the month of October. The Commerce Department said business inventories climbed by 0.6 percent in October following an upwardly revised 0.5 percent advance in September.

Economists had expected to inventories to rise by 0.6 percent compared to the 0.3 percent increase originally reported for the previous month. The dollar has risen to around $1.13 against the Euro Friday afternoon, from an early low of $1.1365.

Eurozone private sector grew at the slowest pace in more than four years during December, suggesting that the 19-nation economy is set to end this year with a whimper.

The flash Composite purchasing managers' index, or PMI, which combines manufacturing and services, fell to a 49-month low of 51.3 from 52.7 in November, survey data from IHS Markit showed. Economists had forecast a modest improvement in the index to 52.8.

Germany's private sector expanded at the slowest pace in four years during December amid slower growth in manufacturing and services, survey data from IHS Markit showed on Friday. The flash Composite Purchasing Managers' Index fell to a 48-month low of 52.2 from 52.3 in November. Economists had expected a score of 52.8.

Germany's wholesale price inflation slowed in November, entirely reversing the acceleration seen in the previous month, preliminary data from the Federal Statistical Office showed on Friday. The wholesale price index rose 3.5 percent year-on-year following a 4 percent increase in October. The measure climbed at 3.5 percent in September.

France's private sector contracted for the first time in two-and-a-half years in December with both manufacturing and services activities falling, , amid widespread reports of disruption to business due to the ongoing Yellow Vests or 'gilets jaunes' anti-government protests, survey data from IHS Markit showed on Friday.

The flash Composite Purchasing Managers' Index, or PMI, which combines manufacturing and services, fell to a 30-month low of 49.3 from 54.2 in November. Economists had forecast a moderate decline to 54.

The buck has climbed to around $1.2565 against the pound sterling this afternoon, from an early low of $1.2653.

The greenback reached a high of Y113.674 against the Japanese Yen Friday, but has since pulled back to around Y113.350.

An index of business and manufacturing sentiment in Japan was steady in the fourth quarter of 2018, the Bank of Japan said in its quarterly Tankan Survey. The large manufacturing index was unchanged with a score of +19, beating expectations for +18. The outlook came in at +15, shy of forecasts for +17 and down from +19 in the previous three months.


The material has been provided by InstaForex Company - www.instaforex.com

U.S. Business Inventories Climb In Line With Estimates In October

Trading 14 déc 2018 Commentaire »

A report released by the Commerce Department on Friday showed business inventories in the U.S. increased in line with economist estimates in the month of October.

The Commerce Department said business inventories climbed by 0.6 percent in October following an upwardly revised 0.5 percent advance in September.

Economists had expected to inventories to rise by 0.6 percent compared to the 0.3 percent increase originally reported for the previous month.

The report said retail and wholesale inventories both advanced by 0.8 percent in October, while manufacturing inventories inched up by 0.1 percent.

Meanwhile, the Commerce Department said business sales rose by 0.3 percent in October, matching a downwardly revised increase in September.

The sales growth came as a 1.2 percent jump in retail sales more than offset modest decreases in wholesale and manufacturing sales, which edged down by 0.2 percent and 0.1 percent, respectively.

With inventories rising by more than sales, the total business inventories/sales ratio ticked up to 1.35 in October from 1.34 in September.


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Dollar Climbs After Better-than-expected U.S. Retail Sales Data

Trading 14 déc 2018 Commentaire »

The U.S. dollar strengthened against its key counterparts in the European session on Friday, after a data showed that nation's retail sales grew more than forecast in November.

Data from the Commerce Department showed that the retail sales edged up by 0.2 percent in November after spiking by an upwardly revised 1.1 percent in October.

Economists had expected retail sales to rise by 0.1 percent compared to the 0.8 percent increase originally reported for the previous month.

Excluding a modest increase in sales by motor vehicles and parts dealers, retail sales still rose by 0.2 percent in November after jumping by an upwardly revised 1.0 percent in October. The uptick in ex-auto sales matched economist estimates.

Traders look ahead to next week's monetary policy meeting of the Federal Reserve for more direction.

The Fed is widely expected to raise interest rate by 25 basis points, but contrary to earlier indications and expectations, the central bank is unlikely to keep hiking rates in the coming year.

The greenback rose against its major rivals in the Asian session, with the exception of the yen.

The greenback appreciated to more than a 2-week high of 1.1270 against the euro, after falling to 1.1365 at 7:45 pm ET. The next possible resistance for the greenback is seen around the 1.11 level.

Preliminary data from the Federal Statistical Office showed that Germany's wholesale price inflation slowed in November, entirely reversing the acceleration seen in the previous month.

The wholesale price index rose 3.5 percent year-on-year following a 4 percent increase in October. The measure climbed at 3.5 percent in September.

The greenback spiked up to 0.9980 against the Swiss franc, its strongest since December 6. If the greenback rises further, 1.01 is possibly seen as its next resistance level.

The greenback added 1.05 percent to hit a 2-day high of 1.2530 against the pound, following a decline to 1.2662 at 5:45 pm ET. On the upside, 1.24 is likely seen as the next resistance level for the greenback.

The greenback firmed to 0.7151 against the aussie, a level not seen so far this month. The greenback is poised to challenge resistance around the 0.70 region.

The U.S. currency reached as high as 113.68 against the yen, up from a low of 113.42 hit at 9:00 pm ET. The greenback is likely to challenge resistance around the 116.00 area.

Data from the Bank of Japan showed that an index of business and manufacturing sentiment in Japan held steady in the fourth quarter of 2018.

The large manufacturing index was unchanged with a score of +19, beating expectations for +18. The outlook came in at +15, shy of forecasts for +17 and down from +19 in the previous three months.

The greenback held steady against the kiwi, after rising to more than a 2-week high of 0.6778 at 3:55 am ET. The pair was valued at 0.6854 at yesterday's close.

The greenback advanced to a 3-day high of 1.3401 against the loonie and held steady thereafter. The pair was valued at 1.3351 when it ended deals on Thursday.

The U.S. business inventories for October and Markit's preliminary services PMI for December are scheduled for release shortly.


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*U.S. Business Inventories Climb 0.6% In October

Trading 14 déc 2018 Commentaire »

U.S. Business Inventories Climb 0.6% In October


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Eurozone Private Sector Growth Lowest In Over 4 Years

Trading 14 déc 2018 Commentaire »

Eurozone private sector grew at the slowest pace in more than four years during December, suggesting that the 19-nation economy is set to end this year with a whimper.

The flash Composite purchasing managers' index, or PMI, which combines manufacturing and services, fell to a 49-month low of 51.3 from 52.7 in November, survey data from IHS Markit showed. Economists had forecast a modest improvement in the index to 52.8.

A reading above 50 suggests growth in the private sector.

The flash manufacturing PMI for the euro area dropped to a 34-month low of 51.4 from 51.8 in November. Economists had expected the measure to remain unchanged.

The manufacturing output index, meanwhile, rose to a two-month high of 51 from 50.7 in November.

The flash services PMI eased to 51.4 from 53.4 in November. Economists had expected the reading to remain steady.

Stalled new business inflows, job creation at two-year low and weaker business optimism contributed to the downturn in December.

Inflationary pressures remained elevated, but eased. Input price inflation slowed to the weakest level since April and output price growth was the lowest since September.

The Yellow Vests or "gilets jaunes" anti-government protests in France and the weak demand for automobiles due to the implementation of the WLTP emissions test exacerbated the undercurrent of slowing economic growth, IHS Markit said.

"Companies are worried about the global economic and political climate, with trade wars and Brexit adding to increased political tensions within the euro area," IHS Markit economist Chris Williamson said.

"The surveys also point to further signs that the struggling autos sector continued to act as a drag on the region's economy."

"While GDP growth in the fourth quarter as a whole is indicated at almost 0.3 percent, the surveys point to quarterly GDP growth momentum slipping closer to 0.1 percent in December alone," Williamson added.

Further, he said forward-looking indicators such as new orders and future expectations remain subdued, suggesting that demand growth is stalling, adding to downside risks to the immediate outlook.

Separate reports from IHS Markit showed that Germany's private sector expanded at the slowest pace in four years during December amid slower growth in manufacturing and services.

France's private sector contracted for the first time in two-and-a-half years in December with both manufacturing and services activities falling, amid widespread reports of disruption to business due to the ongoing Yellow Vests anti-government protests.

Elsewhere, Eurostat reported that Eurozone hourly labor costs annual growth rose to 2.5 percent in the third quarter from 2.3 percent in the second quarter.


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