Oil Futures Retreat From Multi-month High, Settle Lower

Trading 21 mar 2019 Commentaire »

Crude oil futures rose to near 4-1/2-month high in early trades on Thursday, but retreated and settled in negative territory as weak economic outlook triggered concerns about energy demand.

An unexpected fall in U.S. crude inventories in the week ended March 15, OPEC-led output cuts and the U.S. sanctions on Iran and Venezuela lifted oil prices early on in the session.

But prices retreated as global economic slowdown raised concerns about energy demand and uncertainty about U.S.-China trade talks continued to weigh.

Crude oil futures for May ended down $0.25, or 0.4%, at $59.98 a barrel.

After holding interest rates unchanged on Wednesday, the Federal Reserve cut its economic growth forecast for 2019 and also revised down expectations for headline inflation, citing slowdowns in household spending and business fixed investment.

Meanwhile, trade worries continue to linger after U.S. President Donald Trump warned on Wednesday that he would likely keep tariffs on Chinese goods for a "substantial period" until he is sure Beijing is complying with any trade agreement.

According to reports, the U.S. and China are set to resume talks next week following conflicting reports over the progress of negotiations in recent days.

Data released by the Energy Information Administration on Wednesday showed U.S. crude oil stockpiles to have dropped by 9.6 million barrels in the week ended March 15, the the most since July, boosted by strong export and refining demand. That compared with analysts' expectations for an increase of 309,000 barrels.


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Gold Futures Settle At 1-week High

Trading 21 mar 2019 Commentaire »

Gold prices retreated after climbing to a three-week high in early trades on Thursday, but still ended the session on a positive note amid uncertainty about Brexit and U.S.-China trade talks.

The Federal Reserve's dovish policy stance weighed on the dollar, but fairly strong economic data pulled the currency out of lower levels and this limited the yellow metal's gains.

The dollar index rose to 96.63 after opening at 95.91 and despite retreating slightly, was still up more than 0.5%, at 96.52.

Gold futures for April ended up $5.60, or 0.4%, at $1,307.30 an ounce.

In economic news, a report released by the Labor Department on Thursday showed first-time claims for U.S. unemployment benefits fell by more than expected in the week ended March 16th.

The report said initial jobless claims dropped to 221,000, a decrease of 9,000 from the previous week's revised level of 230,000.

Economists had expected jobless claims to dip to 225,000 from the 229,000 originally reported for the previous week.

A report from the Federal Reserve Bank of Philadelphia showed its index of manufacturing activity rebounded by much more than anticipated in March, after unexpected contraction in the previous month.

The Philly Fed said its index for current manufacturing activity in the region jumped to a positive 13.7 in March from a negative 4.1 in February, with a positive reading indicating growth. Economists had expected the index to rise to a positive 4.5.

The Conference Board's report showed its reading on leading U.S. economic indicators rose for the first time in five months in February, reflecting accommodative financial conditions and a rebound in stock prices.

The Conference Board said its leading economic index edged up by 0.2% in February after revised data showed no change in January. Economists had expected the index to inch up by 0.1% compared to the 0.1% dip originally reported for the previous month.

The report said the coincident economic index rose by 0.2% in February following a 0.1% uptick in January, while the lagging economic index was unchanged after climbing by 0.6% in the previous month.


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Treasuries Close Roughly Flat After Seeing Initial Strength

Trading 21 mar 2019 Commentaire »

After initially extending Wednesday's late-day rally, treasuries gave back ground over the course of the trading session on Thursday.

Bond prices pulled back well off their best levels of the day before ending the session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by less than a basis point to 2.537 percent after hitting a low of 2.50 percent.

The pullback by treasuries came as traders cashed in on recent strength in the bond markets after the ten-year yield hit its lowest intraday level in well over a year.

Treasuries initially moved higher as traders continued to react to the Federal Reserve's monetary policy announcement on Wednesday, as the central bank indicated it no longer expects to raise interest rates this year.

Buying interest waned shortly after the start of trading, however, as traders reacted to a batch of largely upbeat U.S. economic data as well as a rally by stocks on Wall Street.

Early in the day, the Labor Department released a report showing a bigger than expected drop in initial jobless claims in the week ended March 16th.

The report said initial jobless claims dropped to 221,000, a decrease of 9,000 from the previous week's revised level of 230,000.

Economists had expected jobless claims to dip to 225,000 from the 229,000 originally reported for the previous week.

A separate report from the Philadelphia Federal Reserve showed regional manufacturing activity rebounded more than expected in March after an unexpected contraction in February.

Additionally, the Conference Board also released a report showing a slightly bigger than expected increase by its reading on leading U.S. economic indicators.

The Conference Board said its leading economic index edged up by 0.2 percent after revised data showed no change in January. Economists had expected the index to inch up by 0.1 percent.

A report on existing home sales in the month of February may attract some attention on Friday along with a separate report on wholesale inventories in January.


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

Trading 21 mar 2019 Commentaire »

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

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

Last month, the Treasury also sold $40 billion worth of two-year notes, $41 billion worth of five-year notes and $32 billion worth of seven-year notes.

The two-year note auction attracted below average demand, while the five-year and seven-year note auctions attracted above average demand.


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Elliott wave analysis of GBP/JPY for March 21, 2019

Trading 21 mar 2019 Commentaire »

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We have seen the expected corrective decline towards 144.60. Once support at 144.60 has been tested a new impulsive rally will be expected for a rally above minor resistance at 145.88 indicating a corrective low is in place for more upside pressure towards 148.87 on the way higher to 151.50.

R3: 147.31

R2: 146.46

R1: 145.88

Pivot: 145.30

S1: 144.81

S2: 144.60

S3: 143.69

Trading recommendation:

We are look to buy GBP at 144.60 or upon a break above 145.88. Our stop will be placed at 143.60.

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

Elliott wave analysis of EUR/JPY for March 21, 2019

Trading 21 mar 2019 Commentaire »

analytics5c93b7403e99a.png

EUR/JPY failed to break above the minor resistance at 126.75 and instead broke below support at 126.05 indicating a deeper corrective decline to 125.25 before the next impulsive rally to 126.75 and above here confirms continuation higher to 129.50 and longer term closer to the 161.8% extension target at 133.50.

Short-term minor resistance at 126.71 should be able to cap the upside for the corrective dip to 125.25 before the next rally higher. Only a direct break above 126.71 will indicate that the correction completed early and a the next impulsive rally is developing.

R3: 126.75

R2: 126.50

R1: 126.27

Pivot: 125.75

S1: 125.58

S2: 125.25

S3: 125.18

Trading recommendation:

Our stop at 125.80 was hit for a 100 pips profit. We are look for a new buying opportunity at 125.25 or upon a break above 126.27.

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Concerns Over 'No-Deal' Brexit Drags Down Pound

Trading 21 mar 2019 Commentaire »

The pound was defensive against its key counterparts in the European session on Thursday, as fears over a "no-deal" Brexit intensified on the possibility of U.K. Prime Minister Theresa May's Brexit deal being failed for a third time in U.K. Parliament.

With just eight days left for the U.K. to leave the EU, traders were worried about how May can get her deal approved through the House of Commons in the next few days.

Theresa May requested for a three-month extension to Brexit on Wednesday, as she was unable to get her deal agreed by MPs and passed into law.

European Council President Donald Tusk said Wednesday that a short extension "should be possible," depending on the condition that the UK parliament will pass the current withdrawal agreement next week.

The Bank of England kept its key interest rate and bond purchases unchanged, and reiterated that a further tightening of policy at a gradual pace may be needed if the economy expands in line with projections.

The nine-member Monetary Policy Committee, led by Governor Mark Carney, held the bank rate unchanged at 0.75 percent, in line with economists' expectations.

The stock of corporate bond purchases was kept at GBP 10 billion and that of government bond purchases at GBP 435 billion.

Data from the Office for National Statistics showed that U.K. retail sales rose unexpectedly in February.

The retail sales rose 0.4 percent month-on-month in February, following a 1.2 percent increase in the previous month. Economists had forecast a 0.4 percent decline.

The currency showed mixed trading against its major counterparts in the Asian session. While it rose against the greenback and the yen, it held steady against the franc and the euro.

The pound depreciated to 0.8689 against the euro, its lowest since February 25, and recorded a 0.6 percent slide from a high of 0.8637 touched at 2:30 am ET. The pair was valued at 0.8648 at yesterday's close. The pound is seen finding support around the 0.88 level.

The pound lost 0.9 percent to an 8-day low of 1.3106 against the greenback, following an advance to 1.3227 at 9:30 pm ET. The pound-greenback pair finished Wednesday's deals at 1.3192. Next key support for the pound is seen around the 1.30 level.

Data from the Labor Department showed that first-time claims for U.S. unemployment benefits fell more than expected in the week ended March 16. The report said initial jobless claims dropped to 221,000, a decrease of 9,000 from the previous week's revised level of 230,000.

The U.K. currency weakened to a 9-day low of 144.85 against the Japanese yen, down by 1.1 percent from a high of 146.40 seen at 9:45 pm ET. At yesterday's close, the pair was quoted at 146.02. Should the pound extends its downward trading, 142.5 is possibly seen as its next support level.

Having strengthened to 1.3116 against the Swiss franc at 3:00 am ET, the pound reversed direction and fell 0.7 percent to near a 4-week low of 1.3025. The pound was trading at 1.3089 per franc at yesterday's close. Continuation of the pound's downtrend may see it challenging support around the 1.29 area.

Switzerland's central bank kept its expansionary monetary policy unchanged by holding the key interest rate unchanged, citing a still strong franc, and trimmed the inflation forecast for this year due to weaker outlook for global economy.

The Swiss National Bank left its interest rate on sight deposits unchanged at -0.75 percent and the target range for the three-month Libor between -1.25 percent and -0.25 percent. The decision was in line with economists' expectations.


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U.S. Leading Economic Index Rises Slightly More Than Expected In February

Trading 21 mar 2019 Commentaire »

Reflecting accommodative financial conditions and a rebound in stock prices, the Conference Board released a report on Thursday showing its reading on leading U.S. economic indicators rose for the first time in five months in February.

The Conference Board said its leading economic index edged up by 0.2 percent in February after revised data showed no change in January.

Economists had expected the index to inch up by 0.1 percent compared to the 0.1 percent dip originally reported for the previous month.

Ataman Ozyildirim, Director of Economic Research at the Conference Board, said the accommodative financial conditions and rebound in stock prices more than offset weaknesses in the labor market components.

"Despite the latest results, the US LEI's growth rate has slowed over the past six months, suggesting that while the economy will continue to expand in the near-term, its pace of growth could decelerate by year end," Ozyildirim added.

The report said the coincident economic index rose by 0.2 percent in February following a 0.1 percent uptick in January, while the lagging economic index was unchanged after climbing by 0.6 percent in the previous month.


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BoE Holds Policy Steady As Survey Shows Firms Preparing For Disorderly Brexit

Trading 21 mar 2019 Commentaire »

Bank of England policymakers decided that it was appropriate to keep the interest rate and monetary stimulus unchanged this month as UK lawmakers scramble to secure an extension of the deadline for leaving the European Union.

The bank also released the results of a survey which showed that "a significantly greater number of companies had judged themselves ready for a no-deal, no-transition Brexit scenario."

The central bank reiterated that a further tightening of policy at a gradual pace may be need if the economy expands in line with projections, but added that a lot depends on how Brexit pans out.

"The MPC judged that the monetary policy response to Brexit, whatever form it took, would not be automatic and could be in either direction," the bank said.

The nine-member Monetary Policy Committee, led by Governor Mark Carney, unanimously decided to hold the bank rate unchanged at 0.75 percent, in line with economists' expectations.

The previous change in the bank rate was a quarter-point hike in August 2018 and the rate is now at its highest level since 2009. The stock of corporate bond purchases was kept at GBP 10 billion and that of government bond purchases at GBP 435 billion.

"The Committee continued to judge that, were the economy to develop broadly in line with its February Inflation Report projections, an ongoing tightening of monetary policy over the forecast period, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2 percent target at a conventional horizon," the Bank of England said.

The BoE Agents survey of almost 300 business contacts between January 29 and March 1 revealed that around 80 percent of companies judged themselves 'ready' for a 'no deal, no transition' Brexit scenario, compared with around 50 percent of companies in the January survey.

However, "many of those companies had also reported that there were limits to the degree of readiness that was feasible in the face of the range of possible outcomes," the bank added.

Further, the bank said companies had continued to report "significantly weaker" expectations of output, employment and investment in the event of a no-deal, no-transition Brexit.

The central bank forecast 0.3 percent growth for the first quarter, and said this was "marginally stronger" than previously expected. The bank also warned that "further cliff-edge uncertainties" could have "a significant effect on spending as any new deadline approached". Inflation is expected to remain close to the 2 percent target over coming months. Headline inflation edged up to 1.9 percent in February.

"Overall, the Committee judged that underlying inflationary pressures appeared to be broadly on track with the projections underlying the February Report," the bank said.


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*U.S. Leading Economic Indicators Rose 0.2% In February

Trading 21 mar 2019 Commentaire »

U.S. Leading Economic Indicators Rose 0.2% In February


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