Oil Futures End Slightly Higher Ahead Of Inventory Data

Trading 12 mar 2019 Commentaire »

Crude oil futures ended slightly higher on Tuesday, with traders looking ahead to the weekly inventory data and reacting to recent report from the International Energy Agency.

The American Petroleum Institute is scheduled to release its weekly oil report later in the day, while the Energy Information Administration will release its report on U.S. crude inventories for the week ended March 8 on Wednesday morning.

West Texas Intermediate Crude oil futures for April ended up $0.08, or 0.1%, at $56.87 a barrel.

On Monday, crude oil futures for April ended up $0.72, or 1.3%, at $56.79 a barrel.

With Saudi Arabia saying it would extend deep supply cuts and Venezuela threatening to cut off oil exports, global supply is likely to remain a bit tight in the near term.

Venezuela's opposition-run congress on Monday declared a "state of alarm" to pave the way for the delivery of international aid after the crisis in the country took a rapid and catastrophic turn.

Meanwhile, the International Energy Agency said in a report on Monday that there is no peak in oil demand, thanks to strong growth of petrochemicals and jet fuel in the U.S. and Asia.

The U.S. will drive global oil supply growth over the next five years, adding another 4 million barrels per day (bpd) to the country's already booming output, the IEA said.


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Gold Futures Settle Modestly Higher

Trading 12 mar 2019 Commentaire »

Gold futures settled modestly higher on Tuesday, as the U.S. dollar drifted lower after data showed consumer prices to have seen a modest increase in the month of February.

Meanwhile, traders were looking ahead to the crucial vote on British Prime Minister Theresa May's Brexit plan. According to latest reports, May's Brexit plan has been soundly defeated by the British Parliament.

The dollar index dropped to 96.91 before edging up slightly to 96.93, still down by about 0.2% from previous close.

Gold futures for April ended up $7.00, or 0.5%, at $1,298.10 an ounce. A technical issue resulted in the delay of publishing some metals and energy settlements on Comex and the Nymex today.

On Monday, gold futures for April ended down $8.20, or 0.6%, at $1,291.10 an ounce.

Silver futures for May ended up $0.139, at $15.413 an ounce, while Copper futures for May settled at $2.9285 per pound, gaining $0.0275 for the session.

According to the report released by the Labor Department Tuesday morning, consumer prices showed a modest increase in the month of February, after reporting no change in consumer prices over the past few months.

The report said the consumer price index rose by 0.2% in February after coming in unchanged for three straight months. The uptick in consumer prices matched economist estimates.

Excluding food and energy prices, core consumer prices inched up by 0.1% in the month, after rising by 0.2% in January. Economists had expected another 0.2% increase in prices.

The slower pace of consumer price growth justifies the Federal Reserve supporting the real economy by being patient and leaving interest rates on hold for a potentially extended period, said Paul Ashworth, Chief U.S. Economist at Capital Economics.

On Monday, the Federal Reserve chairman Jerome Powell said that the U.S. central bank is in no rush to adjust borrowing costs, given muted inflation pressures and a slowing global economy.


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Treasuries Move Notably Higher Following Strong Ten-Year Note Auction

Trading 12 mar 2019 Commentaire »

After initially moving lower, treasuries showed a strong move to the upside over the course of the trading session on Tuesday.

Bond prices climbed more firmly into positive territory in afternoon trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.8 basis points to 2.605 percent.

With the drop on the day, the ten-year yield more than offset yesterday's uptick, falling to its lowest closing level in well over two months.

The early turnaround by treasuries came following the release of tame inflation data, which suggests the Federal Reserve will continue to refrain from raising interest rates in the near future.

After reporting no change in consumer prices over the past few months, the Labor Department released a report showing a modest increase in consumer prices in the month of February.

The Labor Department said its consumer price index rose by 0.2 percent in February after coming in unchanged for three straight months. The uptick in consumer prices matched economist estimates.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent in February after rising by 0.2 percent in January. Economists had expected another 0.2 percent increase in prices.

The report also said the annual rate of consume price growth slowed to 1.5 percent in February from 1.6 percent in November, while the annual rate of core consumer price growth edged down to 2.1 percent from 2.2 percent.

With consumer price growth slowing, Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "The Fed would appear to be justified in supporting the real economy by being patient and leaving interest rates on hold for a potentially extended period."

Treasuries saw further upside following the release of the results of the Treasury Department's auction of $24 billion worth of ten-year notes, which attracted above average demand.

The ten-year note auction drew a high yield of 2.615 percent and a bid-to-cover ratio of 2.59, while the ten previous ten-year note auctions had an average bid-to-cover ratio of 2.51.

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

A batch of U.S. economic data may also attract attention on Wednesday, with traders likely to keep an eye on reports on durable goods orders, producer prices, and construction spending.


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Ten-Year Note Auction Attracts Above Average Demand

Trading 12 mar 2019 Commentaire »

Following yesterday's sale of $38 billion worth of three-year notes, the Treasury Department sold $24 billion worth of ten-year notes on Tuesday, attracting above average demand.

The ten-year note auction drew a high yield of 2.615 percent and a bid-to-cover ratio of 2.59.

Last month, the Treasury sold $27 billion worth of ten-year notes, drawing a high yield of 2.689 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 2.51.

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 on Wednesday.


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Pound Drops As Cox Says Legal Risks Of U.K. Being Tied To EU Remains Unchanged

Trading 12 mar 2019 Commentaire »

The pound declined against its key counterparts in the European session on Tuesday, erasing its early gains, after Attorney General Geoffrey Cox admitted that the legal risk of the UK being locked to EU rules after Brexit "remains unchanged" despite recent changes struck in deal last night.

Speaking to the House of Commons, Cox said that the legal risk of the UK being trapped in the backstop remained unchanged and the new concessions secured from the EU would only 'reduce' this risk.

"The legal risk remains unchanged. The UK would have no internationally lawful means of exiting the Protocol's arrangements, save by agreement," Cox told MPs. "The question for the House is whether, in the light of these improvements, as a political judgement, the House should now enter into those arrangements," he advised.

Cox's advice undermines the possibility of the PM's "improved deal" being passed through Parliament.

Prime Minister Theresa May's Brexit deal will be put to vote in the Commons from 7 pm U.K. time.

Data from the Office for National Statistics showed that the UK economy expanded at a faster-than-expected pace in January, supported by growth in all main sectors such as manufacturing, services and constructions.

Gross domestic product grew 0.5 percent month-on-month in January after a 0.40 percent decline in December. Economists had expected a 0.20 percent increase.

Industrial production rose 0.6 percent from December, when it fell 0.5 percent. Economists were looking for a 0.20 percent growth.

Separate data showed that the visible trade deficit in January widened to GBP 13.08 billion from GBP 10.89 billion a year ago. In December, the shortfall was GBP 12.68 billion. Economists had forecast a GBP 12.2 billion deficit.

The currency was higher in the Asian session, as Theresa May secured significant changes to her divorce deal from the European Union, helping ease concerns over the backstop arrangement.

The pound lost 2.1 percent to 1.3005 against the greenback, following near a 2-week advance to 1.3287 at 6:00 pm ET. The pair had ended Monday's trading at 1.3147. Should the pound continue its decline, 1.29 is likely seen as its next support level.

Data from the Labor Department showed a modest increase in U.S. consumer prices for February.

The report said the consumer price index rose by 0.2 percent in February after coming in unchanged for three straight months. The uptick in consumer prices matched economist estimates.

Having strengthened to a 1-week high of 147.79 against the yen at 6:00 pm ET, the pound reversed direction and pulled back to 144.58. The pair was valued at 146.22 when it ended deals on Monday. Further downward trading is likely to take the pound to a support around the 143.00 level.

The U.K. currency depreciated to 1.3116 against the Swiss franc, losing around 2.3 percent from near a 10-month high of 1.3423 touched at 6:00 pm ET. The pound-franc pair was quoted at 1.3290 at yesterday's close. The pound is likely to challenge support around the 1.29 level, if it extends its slide.

The pound fell to 0.8654 against the euro, marking a 2.1 percent drop from near a 2-year high of 0.8475 seen at 6:00 pm ET. At Monday's close, the pair was worth 0.8548. Next key support for the pound is possibly seen around the 0.88 level.


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Romania Inflation At 4-Month High In February

Trading 12 mar 2019 Commentaire »

Romania's consumer price inflation rose to a four-month high in February, after remaining unchanged in the previous month, data from the National Institute of Statistics showed on Tuesday.

The consumer price index rose 3.8 percent year-on-year in February, following a 3.3 percent rise in January. Economists had expected a 3.45 percent rise in inflation.

The latest rate of inflation was the highest since the 4.3 percent in October.

On a monthly basis, consumer prices rose 0.8 percent in February.

The biggest price growth was in the food sector, up by 1.3 percent from the previous month.

Prices of non food sector and services rose by 0.6 percent each in February.


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Portugal Inflation Rises In February

Trading 12 mar 2019 Commentaire »

Portugal's consumer price inflation rose to a four-month high in February after easing in the previous month, data from Statistics Portugal showed on Tuesday.

The consumer price index rose 0.94 percent year-over-year in February, after rising 0.48 percent in January. The rate was the highest since a 0.96 percent inflation in October.

Core inflation, which excludes energy and unprocessed food products, rose to 1.0 percent in February from 0.8 percent in the previous month.

On a month-on-month basis, consumer prices decreased 0.2 percent in February followed by a 1.2 percent decline in the prior month.

Inflation based on the EU measure of harmonized index for consumer prices, or HICP, rose to 0.9 percent annually in February from 0.6 percent rise in January.


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Brexit: Pound storm before a key meeting on Brexit issue

Trading 12 mar 2019 Commentaire »

After yesterday's news from Theresa May, the British pound seems to have found strength in itself and significantly strengthened against the US dollar, but today, in the first half of the day, despite good data on UK economic growth, it just fell off.

All this once again proves all the nervousness of the situation that now prevails around Brexit, since time is running out, but there is no solution. Theresa May's loud statements about another success in the negotiations, as we have become accustomed to, are only her desire that goes against the wishes of parliament. So it turns out that, by presenting what is desired as real, the British Prime Minister leads only to an increase in panic and a surge in volatility in the financial markets. In any case, the wait is not long, although, after today's vote, nothing can clear up. If parliament wraps up another May proposal, the situation will only get worse.

As noted above, weak December has outgrown quite a good January. A return to sustainable growth, even against the background of current political events, is a good harbinger.

According to the National Bureau of Statistics, from November to January 2019, the UK economy grew by 1.1% year on year. The data from October to December were revised to 0.9% year on year.

Compared with December 2018, the UK economy grew by 0.5% in January. In December, I recall, there was a decrease of 0.4%.

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As noted in the report, the service sector, as well as retail trade, contributed to good growth, which offset the failure of industrial production and construction.

Industrial production in the UK in January increased by 0.6% compared with December but decreased by 0.9% compared with January 2018. Economists had expected production to grow by only 0.2% in January. Manufacturing industry in the UK for the three reporting months decreased by 0.7%.

The UK foreign trade deficit in goods in January amounted to 13.1 billion pounds, while the deficit with non-EU countries in January was at the level of 5.0 billion pounds.

With current volatility, talking about the technical picture of the British pound hardly makes sense.

Reports published on the American economy did not help the dollar much.

According to published data of the National Federation of Independent Business NFIB, in February 2019 the confidence of small businesses increased. Thus, the small business optimism index in February was 101.7 points versus 101.2 points in January. Economists had expected the index to rise to 103 points.

The NFIB said that small companies were happy to complete the partial suspension of government agencies, but more clarity was needed regarding the future.

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Dutch Industrial Production Rises In January

Trading 12 mar 2019 Commentaire »

Dutch industrial production rose modestly in January after a sharp fall in the previous month, the statistical office CBS reported on Tuesday.

Industrial production edged up 0.1 percent year-on-year in January, after a 3.2 percent fall in December, which was the first contraction in more than three years.

The biggest increase was in the production of metal industry, up 9.3 percent, along with rubber and plastic, transport, and electrical and electronic industries.

Meanwhile, production in the food industry fell the most, by 5.5 percent, compared to a year earlier.

On a monthly basis, industrial production rose a seasonally and working day adjusted 2.8 percent in January.


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GBP / USD: plan for the American session on March 12. Brexit panic scenario affects the market

Trading 12 mar 2019 Commentaire »

To open long positions on GBP / USD you need:

Now, it is difficult to predict something in one direction or another, as much will depend on the Brexit vote. Good data on GDP does not help the buyers. Currently, long positions are best viewed with a decline and support test at 1.3077 and 1.3018.

To open short positions on GBP / USD you need:

Selling a pound is best from the large resistance of 1.3195 and 1.3262, where speculative buyers will take profits. A better scenario for sales is the failure of the Brexit agreement without renewing the UK exit agreement.

Indicator signals:

Moving Averages

Trade is conducted in the area of 30-day and 50-medium moving, which indicates a high probability of a side channel with the advantage of sellers.

Bollinger bands

High volatility does not give signals to enter the market based on the indicator.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
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