Oil Futures Plummet To 17-month Low

Trading 20 déc 2018 Commentaire »

Crude oil prices plunged sharply on Thursday, weighed down by concerns about excess supply in the market and on worries about possible drop in energy demand.

Data released by the Energy Information Administration on Wednesday showed a much less than expected drop in U.S. crude stockpiles in the week ended December 14.

Additionally, traders fear that the Federal Reserve's commitment to tighten monetary policy could significantly slow down growth. The Fed, while announcing its monetary policy on Wednesday, indicated two rate increases in the first half of next year.

Crude oil futures for February ended down $2.29, or 4.8%, at $45.88 a barrel, the lowest settlement in seventeen months.

On Wednesday, crude oil futures ended at $48.17 a barrel, gaining $1.57, or 3.4%, after having tumbled more than 7% a session earlier.

According to data released by the Energy Information Administration on Wednesday, crude stockpiles in the U.S. dropped by 497,000 barrels in the week ended December 14, much lower than an expected declined of 2.44 million barrels.

That was the third successive week of declines in stockpiles. Before that crude stockpiles in the U.S. had increased for ten straight weeks, and in most of the weeks, the increase was much more than what the market had predicted.

Recently, the OPEC and some non-OPEC oil producers agreed to reduce output by 1.2 million barrels a day, starting January 2019. However, traders are skeptical about the group implementing the production cut decision.


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Treasuries Close Modestly Lower After Seeing Initial Strength

Trading 20 déc 2018 Commentaire »

Treasuries moved modestly lower over the course of the trading session on Thursday after failing to sustain an initial move to the upside.

Bond prices pulled back off their early highs and showed a lack of direction for most of the day before closing lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.1 basis points to 2.789 percent.

Profit taking may have contributed to the pullback by treasuries, as the uptick by the ten-year yield came after it hit an eight-month intraday low of 2.749 percent in early trading.

Traders also continued to digest Wednesday's rate hike by the Federal Reserve as well as the less dovish than hoped accompanying statement.

Raising concerns among some investors, the Fed indicated it plans to continue to raising interest rates despite signs of slowing economic growth.

Disappointing economic data has added to concerns about the Fed's plans, with a Labor Department report showing initial jobless claims rebounded in the week ended December 15th.

The report said initial jobless claims rose to 214,000, an increase of 8,000 from the previous week's unrevised level of 206,000. Economists had expected jobless claims to climb to 216,000.

A separate report from the Philadelphia Federal Reserve said manufacturing activity in the Philadelphia region continued to grow but remained subdued in the month of December.

The report said the diffusion index for current general activity dropped to 9.4 in December after tumbling to 12.9 in November.

While a positive reading still indicates growth in regional manufacturing activity, economists had expected the index to rise to 15.0.

Meanwhile, the Conference Board released a report shortly after the start of trading showing an unexpected increase in leading U.S. economic indicators in the month of November.

The Conference Board said its leading economic index rose by 0.2 percent in November after falling by a revised 0.3 percent in October.

Economists had expected the index to come in unchanged compared to the 0.1 percent uptick originally reported for the previous month.

"The LEI increased slightly in November, but its overall pace of improvement has slowed in the last two months," said Ataman Ozyildirim, Director of Economic Research at the Conference Board.

He added, "Solid GDP growth at about 2.8 percent should continue in early 2019, but the LEI suggests the economy is likely to moderate further in the second half of 2019."

Trading on Friday may be impacted by key economic data, including a final reading on third quarter GDP as well as reports on durable goods orders, personal income and spending, and consumer sentiment.


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Gold Futures Settle At Near 6-month High

Trading 20 déc 2018 Commentaire »

Gold futures settled at near 6-month high on Thursday, as the dollar declined to a one-month low and equities continued to exhibit weakness amid concerns about slowing global economy.

With recent data from Asia and Europe raising concerns about global growth outlook, the yellow metal has been gradually gaining in strength despite seeing mild bouts of weakness at times.

The dollar index dropped to a low of 95.65, losing about 0.85%, before recovering some lost ground.

Gold futures for February ended up $11.50, or 0.9%, at $1,267.90, the highest settlement since June 25, 2018.

On Wednesday, gold futures ended with a gain of $2.80, or 0.2%, at $1,256.40 an ounce.

Silver futures for March settled at $14.869 an ounce, up $0.051 from previous close of $14.818 an ounce.

Stocks plunged once again on Wall Street amid rising concerns about growth. The Dow declined by nearly 2.5%, the S&P 500 shed about 2% and the Nasdaq Composite declined by 2.3%.

Disappointing economic data from China and Europe continue to weigh on stocks.

In U.S. economic news, a report from the Labor Department showed initial a jobless claims rebounded in the week ended December 15th.

According to the report, initial jobless claims rose to 214,000, an increase of 8,000 from the previous week's unrevised level of 206,000. Economists had expected jobless claims to climb 216,000.

Meanwhile, traders continued to stay skeptical about the U.S. and China agreeing on a long term trade deal before the expiry of the 90-day truce.

Worries about bitter relationship between the two countries have increased following the U.S. Justice Department charging two Chinese nationals in a global hacking scheme to steal business secrets, allegedly acting in association with the Chinese Ministry of State Security's Tianjin State Security forces.

"The indictment alleges that the defendants were part of a group that hacked computers in at least a dozen countries and gave China's intelligence service access to sensitive business information," said Deputy Attorney General Rod Rosenstein.


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Dollar Weakens As Government Shutdown Seems Likely

Trading 20 déc 2018 Commentaire »

The dollar is losing ground against all of its major rivals Thursday afternoon. While investors are still reeling from yesterday's hawkish statement from the Federal Reserve, the potential for a government shutdown seems likely.

President Trump is reportedly considering a veto of the short-term funding bill that recently passed in the Senate. Trump is said to be upset over the lack of funding for a wall on the U.S.-Mexico border.

"When I begrudgingly signed the Omnibus Bill, I was promised the Wall and Border Security by leadership," Trump tweeted Thursday. "Would be done by end of year (NOW). It didn't happen! We foolishly fight for Border Security for other countries - but not for our beloved U.S.A. Not good!"

Meanwhile, after reporting a notable decrease in first-time claims for U.S. unemployment benefits in the previous week, the Labor Department released a report on Thursday showing initial jobless claims rebounded in the week ended December 15th.

The report said initial jobless claims rose to 214,000, an increase of 8,000 from the previous week's unrevised level of 206,000. Economists had expected jobless claims to climb to 216,000.

Manufacturing activity in the Philadelphia region continued to grow but remained subdued in the month of December, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday. The report said the diffusion index for current general activity dropped to 9.4 in December after tumbling to 12.9 in November.

While a positive reading still indicates growth in regional manufacturing activity, economists had expected the index to rise to 15.0.

A report released by the Conference Board on Thursday showed a modest increase by leading U.S. economic indicators in the month of November. The Conference Board said its leading economic index rose by 0.2 percent in November after falling by a revised 0.3 percent in October.

Economists had expected the index to come in unchanged compared to the 0.1 percent uptick originally reported for the previous month.

The dollar has dropped to around $1.1475 against the Euro Thursday afternoon, from an early high of $1.1377.

Eurozone's current account surplus increased in October after declining in the previous month, but was lower than the same month last year. The current account surplus rose to EUR 23 billion from EUR 18 billion in September, figures from the European Central Bank showed on Thursday. In October 2017, the surplus was EUR 35 billion.

Bank of England policymakers unanimously left the key interest rate and asset purchase targets unchanged on Thursday, as expected. The nine-member Monetary Policy Committee held its key interest rate unchanged at 0.75 percent in line with economists' expectations.

Brexit uncertainties have intensified considerably since the previous policy session and they are weighing on UK financial markets and on the near-term growth outlook, the bank said.

The bank expects inflation to fall below 2 percent in coming months due to lower oil prices.

The buck has fallen to around $1.2675 against the pound sterling this afternoon, from a high of $1.2613 this morning.

UK retail sales rose for the first time in three months in November to surpass economists' expectations, thanks to Black Friday promotions and record online spending, while the long term trend was that of a slowdown, amid the persistent Brexit uncertainties.

Data from the Office for National Statistics showed on Thursday that the volume of retail sales including automotive fuel rose 1.4 percent from October, which was much faster than the 0.3 percent growth economists had predicted.

The Bank of Japan left its ultra-loose monetary policy unchanged on Thursday, asserting its pledge to keep interest rate extremely low for an extended period of time amid indications of global economic slowdown.

The policy board of the BoJ voted 7-2 to purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.

The greenback has tumbled to over a 3-month low of Y111.050 against the Japanese Yen Thursday afternoon, from an early high of Y112.604.


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Treasury Announces Details Of Next Week's Long-Term Securities Auctions

Trading 20 déc 2018 Commentaire »

On Thursday, the Treasury Department announced the details of next week's auctions of two-year, five-year, and seven-year notes.

The Treasury said it plans to sell $40 billion worth of two-year notes next Monday, $41 billion worth of five-year notes next Wednesday and $32 billion worth of seven-year notes next Thursday.


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U.S. Leading Economic Index Unexpectedly Rises 0.2% In November

Trading 20 déc 2018 Commentaire »

A report released by the Conference Board on Thursday showed a modest increase by leading U.S. economic indicators in the month of November.

The Conference Board said its leading economic index rose by 0.2 percent in November after falling by a revised 0.3 percent in October.

Economists had expected the index to come in unchanged compared to the 0.1 percent uptick originally reported for the previous month.

"The LEI increased slightly in November, but its overall pace of improvement has slowed in the last two months," said Ataman Ozyildirim, Director of Economic Research at the Conference Board.

He added, "Solid GDP growth at about 2.8 percent should continue in early 2019, but the LEI suggests the economy is likely to moderate further in the second half of 2019."

The modest increase by the leading economic index reflected positive contributions from seven of the ten indicators that make up the index, including building permits, the ISM New Orders Index, and the interest rate spread.

Negative contributions from average weekly initial jobless claims, stock prices, and average weekly manufacturing hours limited the upside for the index.

The report said the coincident economic index also edged up by 0.2 percent in November after inching up by 0.1 percent in October, reflecting positive contributions from all four indicators that make up the index.

Additionally, the Conference Board said the lagging economic index climbed by 0.4 percent in November following a 0.5 percent increase in October.

The continued advanced by the lagging index reflects positive contributions from four of its seven components, including the average duration of unemployment and commercial and industrial loans outstanding.


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*U.S. Leading Economic Index Rises 0.2% In November

Trading 20 déc 2018 Commentaire »

U.S. Leading Economic Index Rises 0.2% In November


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Estonia Producer Price Inflation Eases

Trading 20 déc 2018 Commentaire »

Estonia's producer price inflation slowed in November, data from Statistics Estonia showed on Thursday.

Producer prices increased 1.6 percent year-on-year in November, after a rise of 2.8 percent in October.

Data showed that prices in manufacturing declined 0.8 percent in November and mining industry logged a price fall of 2.4 percent.

Month-on-month, producer prices declined 0.9 percent in November.

Prices of electricity, gas, steam and air conditioning supply grew at rose 9.3 percent from the previous month.

In November, the import price dropped by 0.3 percent from October, but rose 3.2 percent from last year. The export price index decreased 1.9 percent, but increased 0.4 percent.


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EUR/AUD Testing Resistance, Prepare For Reversal

Trading 20 déc 2018 Commentaire »

EUR/AUD is testing its resistance at 1.5998 (61.8% Fibonacci extension, 61.8 % Fibonacci retracement, horizontal overlap resistance) where a reversal to its support at 1.5825 (61.8% Fibonacci retracement, horizontal overlap support) is expected.

Stochastic (55, 5, 3) has reversed off its resistance at 98% where a corresponding drop is expected.

EUR/AUD is testing its resistance where we expect to see a reversal.

Sell below 1.5998. Stop loss at 1.6136. Take profit at 1.5825.

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Italy Producer Price Inflation Slows In November

Trading 20 déc 2018 Commentaire »

Italy's producer price inflation slowed in November, data from the statistical office Istat showed Thursday.

Producer prices rose 4.5 percent year-on-year in November after a 5.8 percent increase in October, which was the lowest in three months.

In the domestic market, producer prices rose 5.7 percent annually in November and by 1.8 percent on foreign market.

Producer prices fell 0.7 percent monthly in November after a 1.3 percent rise in the previous month. The decline was the first in seven months.

Domestic market prices dropped 0.8 percent, while foreign market prices edged up 0.1 percent.


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