Oil Futures Extend Winning Streak To 8th Session

Trading 09 jan 2019 Commentaire »

Crude oil prices rose sharply on Wednesday, extending gains to an eighth successive session, amid easing concerns about energy demand and on data showing a drop in U.S. crude inventories.

Worries about energy demand have eased a bit following the high level trade discussions between U.S. and Chinese officials. It is now being speculated that the two nations will strike a trade deal ahead of a March 1 deadline established by U.S. President Donald Trump and Chinese President Xi Jinping last month at the G20 summit in Argentina.

Data released by the Energy Information Administration today showed crude oil inventories dropped by 1.68 million barrels in the week to January 4, after falling by about 1.4 million barrels a week earlier. However, the drop was notably less than forecasts.

Gasoline inventories were up by 8.07 million barrels last week, while distillate stockpiles increased by 10.61 million barrels.

Crude oil futures for February ended up $2.58, or 5.2%, at $52.36 a barrel.

On Tuesday, crude oil futures ended up $1.26, or 2.6%, at $49.78 a barrel.

Saudi Arabia's energy minister is reported to have expressed confidence that action to rein in output by OPEC and its allies would bring the oil market into balance, unless there was an unexpected development.

Khalid al-Falih also said he would not rule out calling for further action by the Organization of the Petroleum Exporting Countries and its allies in future, adding that market conditions looked better than a few weeks ago.

UAE Energy Minister Suhail Al Mazroui has also stated that a global oil pact to cut production by 1.2 million barrels per day is enough to balance the oil market.

Investors shrugged off a World Bank report suggesting that global growth will drop to 2.9% this year from 3% in 2018 on the back of several downside risks.

"The outlook for the global economy has darkened. Global financing conditions have tightened, industrial production has moderated, trade tensions have intensified, and some large emerging market and developing economies have experienced significant financial market stress," the bank said.


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Treasuries Finish Choppy Trading Session Modestly Lower

Trading 09 jan 2019 Commentaire »

After recovering from an initial move to the downside, treasuries showed a lack of direction over the course of the trading session on Wednesday.

Bond prices spent much of the day bouncing back and forth across the unchanged line before closing modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.2 basis points to 2.728 percent.

With the slight uptick on the day, the ten-year yield continued to rebound from the more than eleven-month closing low set last Thursday.

Treasuries initially came under pressure amid optimism about trade talks between the U.S. and China after a meeting between U.S. and Chinese officials was extended to a third day.

Officials have not made public comments about the outcome of the talks, although traders remain hopeful the U.S. and China will reach a long-term trade agreement before a March 1st deadline.

Selling pressure waned shortly after the open, however, as traders looked ahead to the release of the minutes of the latest Federal Reserve meeting.

The minutes released this afternoon confirmed Federal Reserve Chairman Jerome Powell's recent remarks suggesting the central bank will take a patient approach to further interest rate increases.

Participants saw the appropriate extent and timing of future rate hikes as less clear than earlier, the minutes of the Fed's December meeting said.

The Fed decided to raise rates by a quarter point at the meeting, but the minutes suggest volatility in financial markets and increased concerns about global economic growth have clouded the outlook for rates.

"Against this backdrop, many participants expressed the view that, especially in an environment of muted inflation pressures, the Committee could afford to be patient about further policy firming," the minutes said.

A number of participants noted it was important for the FOMC to assess the impact of increasingly pronounced risks and the effects of past rate hikes before making further changes to the stance of monetary policy.

The patient approach espoused by the minutes is similar to remarks Powell made during a joint discussion with former Fed Chairs Janet Yellen and Ben Bernanke last Friday.

Remarks by Powell at the Economic Club of Washington are likely to attract attention on Thursday along with a report on weekly jobless claims.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auction of $16 billion worth of thirty-year bonds.


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Dollar Losing Ground After Fed Minutes Released

Trading 09 jan 2019 Commentaire »

The dollar is down against all of its major rivals Wednesday afternoon. On a light day for U.S. economic news, traders were focused on the Fed minutes.

Minutes from the Federal Open Market Committee's latest meeting confirmed Federal Reserve Chairman Jerome Powell's recent remarks suggesting the central bank will take a patient approach to further interest rate increases.

The minutes of the FOMC's December meeting showed participants saw the appropriate extent and timing of future rate hikes as less clear than earlier.

The Fed decided to raise rates by a quarter point at the meeting, but the minutes suggest volatility in financial markets and increased concerns about global economic growth have clouded the outlook for rates.

"Against this backdrop, many participants expressed the view that, especially in an environment of muted inflation pressures, the Committee could afford to be patient about further policy firming," the minutes said.

A number of participants noted it was important for the FOMC to assess the impact of increasingly pronounced risks and the effects of past rate hikes before making further changes to the stance of monetary policy.

The dollar has dropped to over a 2-month low of $1.1550 against the Euro Wednesday afternoon, from an early high of $1.1438.

Eurozone unemployment rate unexpectedly eased in November to its lowest level in more than a decade, figures from Eurostat showed on Wednesday. The seasonally adjusted jobless rate eased to 7.9 percent from 8 percent in October. Economists had expected the rate to remain unchanged.

Germany's merchandise trade surplus grew in November to its biggest level in five months as imports fell unexpectedly, and exports decreased, giving further evidence of a slowdown in the biggest euro area economy.

The non-adjusted trade surplus grew to EUR 20.5 billion from EUR 18.9 billion in October, preliminary data from the Federal Statistical Office showed on Wednesday. Economists had expected a surplus of EUR 18.6 billion.

Exports fell a seasonally and calendar adjusted 0.4 percent month-on-month following a 0.9 percent rise in October. Economists had forecast a 0.5 percent decline. The latest fall was the biggest in four months.

Imports decreased a seasonally adjusted 1.6 percent from the previous month after a 0.8 percent increase in October. Economists had expected imports to remain unchanged.

France's consumer confidence fell sharply in December to its lowest level since late 2014, survey data from INSEE showed on Wednesday.

The consumer confidence dropped to 87 from 91 in November. The latest reading was the lowest since November 2014. Economists were looking for a score of 90.

The buck has fallen to over a 1-week low of $1.28 against the pound sterling this afternoon, from an early high of $1.2715.

UK permanent job appointment grew at the weakest pace since early 2017 amid a sharp decline in the supply of candidates, survey data from IHS Markit showed on Wednesday.

The greenback reached an early high of Y109.003 against the Japanese Yen Wednesday, but has since retreated to around Y108.200.


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Fed Minutes Indicate Patient Approach To Further Rate Hikes

Trading 09 jan 2019 Commentaire »

Minutes from the Federal Open Market Committee's latest meeting confirmed Federal Reserve Chairman Jerome Powell's recent remarks suggesting the central bank will take a patient approach to further interest rate increases.

The minutes of the FOMC's December meeting showed participants saw the appropriate extent and timing of future rate hikes as less clear than earlier.

The Fed decided to raise rates by a quarter point at the meeting, but the minutes suggest volatility in financial markets and increased concerns about global economic growth have clouded the outlook for rates.

"Against this backdrop, many participants expressed the view that, especially in an environment of muted inflation pressures, the Committee could afford to be patient about further policy firming," the minutes said.

A number of participants noted it was important for the FOMC to assess the impact of increasingly pronounced risks and the effects of past rate hikes before making further changes to the stance of monetary policy.

The patient approach espoused by the minutes is similar to remarks Powell made during a joint discussion with former Fed Chairs Janet Yellen and Ben Bernanke last Friday.

Powell stressed that monetary policy is not on a "preset path" after the Fed raised interest rates four times in 2018 and forecast two rate hikes in the new year.

"Particularly with muted inflation readings that we've seen coming in, we will be patient as we watch to see how the economy evolves," Powell said.

The Fed chief said the central bank is always prepared to significantly shift the stance of monetary policy if incoming economic data does not meet expectations.

The minutes also noted monetary policy is not on a "preset course," with participants emphasizing that the approach to setting the stance of policy should be importantly guided by the implications of incoming data for the economic outlook.

Notably, the Fed's projections provided after the meeting pointed to two interest rate hikes in 2019 compared to the previous forecast for three.

The Fed's median projection for the federal funds rate in 2019 was reduced to 2.9 percent from the 3.1 percent expected in September.

The minutes revealed participants generally revised down their individual assessments of the appropriate path for monetary policy after taking into account incoming economic data, information from business contacts, and the tightening of financial conditions.

Participants still determined that some further gradual increases in rates would most likely be consistent with achieving the Fed's dual mandate.

At the meeting, the Fed decided to raise interest rates by 25 basis points to a range of 2.25 percent to 2.50 percent, as participants generally judged that the economy was evolving about as anticipated.

"A few participants, however, favored no change in the target range at this meeting, judging that the absence of signs of upward inflation pressure afforded the Committee some latitude to wait and see how the data would develop," the minutes said.

CME Group's FedWatch tool currently indicates a 99.5 percent chance the Fed will leave interest rates unchanged at its next meeting later this month.


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Gold Settles Higher As Dollar Eases Ahead Of Fed Minutes

Trading 09 jan 2019 Commentaire »

Gold prices moved higher on Wednesday, as global stocks extended recent gains and the dollar shed ground against most major currencies ahead of release of the minutes of the Federal Reserve's policy meeting in December.

Easing worries about U.S.-China trade tensions amid speculation the two countries will strike a deal ahead of a March 1 deadline established by U.S. President Donald Trump and Chinese President Xi Jinping last month at the G-20 summit in Argentina aided gold's uptick.

The World Bank's forecast that the world economy will grow at 2.9% this year, as against a 3% growth forecast made earlier played a role as well in prompting investors to seek the safe haven of the yellow metal.

The World Bank said, "The outlook for the global economy has darkened. Global financing conditions have tightened, industrial production has moderated, trade tensions have intensified, and some large emerging market and developing economies have experienced significant financial market stress,"

Gold futures for February ended up $6.10, or 0.5%, at $1,292.00 an ounce. On Tuesday, gold futures ended down $4.00, or 0.3%, at $1,285.90 an ounce.

Silver futures for March settled at $15.735 an ounce, up $0.022 from Tuesday's close.

Copper futures for March ended at $2.657 per pound, little changed from previous close.

The dollar index shed about 0.7% amid speculation the Fed might pause monetary tightening sometime soon.

Chicago Fed President Charles Evans reportedly said today that the Fed is likely to eventually push rates up slightly into restrictive territory if the dark clouds over the outlook clear up. Meanwhile, St. Louis Fed President James Bullard is reported to have said that more rate increases could push the U.S. economy into a recession.


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*Federal Reserve Releases Minutes Of December Monetary Policy Meeting

Trading 09 jan 2019 Commentaire »

Federal Reserve Releases Minutes Of December Monetary Policy Meeting


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Ten-Year Note Auction Attracts Slightly Below Average Demand

Trading 09 jan 2019 Commentaire »

Following yesterday's auction of $38 billion worth of three-year notes, the Treasury Department sold $24 billion worth of ten-year notes on Wednesday, drawing slightly below average demand.

The ten-year note auction drew a high yield of 2.728 percent and a bid-to-cover ratio of 2.51.

Last month, the Treasury also sold $24 billion worth of ten-year notes, drawing a high yield of 2.915 percent and a bid-to-cover ratio of 2.35.

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 ten-year note auctions had an average bid-to-cover ratio of 2.55.

On Thursday, the Treasury is due to finish off this week's long-term securities auctions with the sale of $16 billion worth of thirty-year bonds.


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Portugal Trade Deficit Widens In November

Trading 09 jan 2019 Commentaire »

Portugal's foreign trade widens in November from a year ago, figures from Statistics Portugal showed on Wednesday.

The trade deficit rose to EUR 2.066 billion in November from EUR 909 million in the corresponding month last year. In October, the deficit was EUR 1.624 billion

Exports declined by 8.7 percent year-on-year following a 5.3 percent increase in October. Imports surged by 11.5 percent annually in November after a 5.4 percent rise in the previous month.

Excluding fuels and lubricants, exports decreased by 8.2 percent and imports grew by 11.7 percent. Both exports and imports rose 8.0 percent each in October.


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Goldman Sachs predicts a decline in iron ore prices to $ 60

Trading 09 jan 2019 Commentaire »

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Experts of the American financial company Goldman Sachs Group Inc (NYSE: GS) believe that iron ore prices may fall to $ 60 per ton in the next six months.

Earlier, in December, the cost of iron ore increased by 11%, showing a record increase over the last year. At the same time, growth did not stop even against the background of news about the problems in the economy of China, the largest consumer of raw materials.

The current price of $ 75 per tonne, according to analysts at Goldman Sachs, cannot last for long. Firstly, because the growth of quotations was partly caused by the storage of the metal on the eve of the new year according to the Chinese calendar. Secondly, due to the increase in supply in 2019.

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Ireland Manufacturing Output Falls Most In 17 Months

Trading 09 jan 2019 Commentaire »

Ireland's manufacturing output declined at the fastest pace in 17 months in November, preliminary figures from the Central Statistics Office showed on Wednesday.

Manufacturing output fell 11.5 percent annually in November after a rise of 5.0 percent in October. The decline was the worst since June 2017, when output decreased 17.3 percent.

On a monthly basis, the manufacturing output fell 7.8 percent in November after a fall of 0.8 percent in October.

Industrial production decreased 10.5 percent annually after a 5.5 percent increase in the previous month.


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