Oil Futures Settle Lower On Unexpected Rise In Inventory

Trading 27 mar 2019 Commentaire »

Crude oil futures ended lower on Wednesday after official data from Energy Information Administration showed an unexpected increase in crude inventories last week.

West Texas Intermediate Crude oil futures for May ended down $0.53, or 0.9%, at $59.41 a barrel.

On Tuesday, crude oil futures ended up $1.12, or 1.9%, at $59.94 a barrel.

According to the weekly data released by the Energy Information Administration, crude inventories unexpectedly increased by 2.8 million barrels in the week to March 22.

The increase in inventory was due to a 506,000-barrel drop in exports and a 400,000-barrel decline in refinery runs.

The agency also said gasoline inventories dropped by 2.88 million barrels and distillate stockpiles declined by 2.08 million barrels last week.

According to American Petroleum Institute's report, released late Tuesday, crude oil inventories rose 1.93 million barrels in the week ended March 22.

Demand growth concerns due to global economic slowdown, and OPEC-led output cuts limited oil's slide.

Disappointing U.S. housing and consumer confidence data released overnight, Brexit fears and uncertainty over the U.S.-China trade talks resuming in Beijing on Thursday also weighed on markets.


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Gold Futures Settle Near 1-week Low

Trading 27 mar 2019 Commentaire »

Gold futures settled lower on Wednesday, extending losses from previous session, as the dollar displayed strength against some major currencies.

However, the yellow metal's loss was just modest due to concerns about global economic slowdown and continued uncertainty about Brexit and U.S.-China trade talks.

The Dollar Index rose to 96.98 before easing to 96.79.

Gold futures for April ended down $4.60, or 0.4%, at $1,310.40 an ounce.

On Tuesday, gold futures for April ended down $7.60, or 0.6%, at $1,315.00 an ounce.

Silver futures for May ended down $0.131, at $15.298 an ounce, while Copper futures for May settled at $2.8630 per pound, up $0.0090 for the session.

Data released on Tuesday that showed U.S. homebuilding to have fallen more than expected in February and consumer confidence to have dropped in March, have raised concerns about growth.

Meanwhile, according to data released today, China's industrial firms posted their worst slump in profits in more than seven years in the first two months of 2019.

Traders were also reacting to comments from European Central Bank President Mario Draghi, who said at a conference in Frankfurt that there could be another delay in hiking interest rates if required.

Draghi said that "adjusting our rate forward guidance" is an option to fulfill the bank's inflation target.

According to the data released by the Commerce Department today, the U.S. trade deficit narrowed by much more than anticipated in the month of January.

The data said the trade deficit narrowed to $51.1 billion in January from a revised $59.9 billion in December.

Economists had expected the deficit to shrink to $57.0 billion from the $59.8 billion originally reported for the previous month.

The narrower than expected deficit came as the value of imports tumbled by 2.6% to $258.5 billion, while the value of exports rose by 0.9% to $207.3 billion.


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Treasuries Extend Recent Upward Trend, Pushing Yields Lower

Trading 27 mar 2019 Commentaire »

Extending the upward trend seen over the past few sessions, treasuries moved higher during the trading day on Wednesday.

Bond prices moved to the upside early in the session and remained firmly positive throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4 basis points to 2.374 percent.

With the continued decrease on the day, the ten-year yield once again dropped to its lowest closing level since December of 2017.

Treasuries continued to benefit from their appeal as a safe haven amid concerns about the U.S. economic outlook amid a slowdown in global growth.

The drop in bond yields has actually added to the economic worries, with an inversion of the yield curve seen as an indication of a potential recession.

Traders were also reacting to a report from the Commerce Department showing the U.S. trade deficit narrowed much more than expected in January due to a steep drop in the value of imports.

The Commerce Department said the trade deficit narrowed to $51.1 billion in January from a revised $59.9 billion in December. Economists had expected the deficit to shrink to $57.0 billion.

In the previous month, the trade deficit increased to its highest level since reaching $60.2 billion in October of 2008.

The narrower than expected deficit came as the value of imports tumbled by 2.6 percent to $258.5 billion, while the value of exports rose by 0.9 percent to $207.3 billion.

Michael Pearce, Senior U.S. Economist at Capital Economics, noted the steep drop in the value of imports is "hardly a positive sign for the economy."

"Nonetheless, with imports now likely to have been flat, or fallen slightly, in the first quarter overall, net trade is likely to be a positive for economic growth in the first quarter," Pearce said.

He added, "We now expect first quarter GDP growth to come in around 2.0% annualized, up from our previous estimate of 1.5%."

Treasuries remained firmly positive in afternoon trading even though the Treasury Department's auction of $41 billion worth of five-year notes attracted below average demand.

The five-year note auction drew a high yield 2.172 percent and a bid-to-cover ratio of 2.35, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.43.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

On Thursday, the Treasury is due to finish off this week's series of long-term securities auctions with the sale of $32 billion worth of seven-year notes.

Economic data is also likely to attract attention on Thursday, with traders likely to keep an eye on reports on fourth quarter GDP, weekly jobless claims, and pending home sales.


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Five-Year Note Auction Attracts Below Average Demand

Trading 27 mar 2019 Commentaire »

Continuing this week's series of long-term securities auctions following the sale of $40 billion worth of two-year notes on Tuesday, the Treasury Department sold $41 billion worth of five-year notes on Wednesday, attracting below average demand.

The five-year note auction drew a high yield 2.172 percent and a bid-to-cover ratio of 2.35.

Last month, the Treasury also sold $41 billion worth of five-year notes, drawing a high yield of 2.489 percent and a bid-to-cover ratio of 2.40.

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 five-year note auctions had an average bid-to-cover ratio of 2.43.

On Thursday, the Treasury is due to finish off this week's series of long-term securities auctions with the sale of $32 billion worth of seven-year notes.


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Italy Consumer Confidence Weakest Since August 2017; Business Confidence Rises

Trading 27 mar 2019 Commentaire »

Italy's consumer confidence weakened to the lowest level in nineteen months and the business sentiment rose in March, figures from the statistical office ISTAT showed on Wednesday.

The consumer confidence index fell to 111.2 in March from 112.4 in February. Economists had forecast to rise 112.5.

The latest reading was the lowest sine August 2017, when the confidence was 111.2.

Households' expectation on the current and future economic situation deteriorated in March. The view on the personal economic situation also weakened.

The business confidence index rose to 99.2 in March from 98.2 in February. Business morale has been weakening since July 2018, when the score was 105.1.

Confidence deteriorated in manufacturing sector, while it improved in the construction and service sectors. Morale in retail trade was unchanged in March.


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*U.S. Crude Oil Inventories Rise By 2.8 Million Barrels In Week Ended 3/22

Trading 27 mar 2019 Commentaire »

U.S. Crude Oil Inventories Rise By 2.8 Million Barrels In Week Ended 3/22


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KOF Slashes Swiss Growth Forecast

Trading 27 mar 2019 Commentaire »

Switzerland's economic growth is set to slow sharply this year, thanks to the slowdown in the country's key export markets, the KOF Swiss Economic Institute said Wednesday.

The KOF slashed the Swiss growth forecast for this year to 1 percent from 1.6 percent seen in December. GDP Growth was 2.5 percent in 2018.

The growth projection for 2020 was retained at 2.1 percent.

"Exports of goods are likely to be sluggish in the first half of 2019 and are not expected to pick up until the second half of the year," the KOF said. "The slowdown in the global economy is also acting as a drag on demand from foreign tourism."

The KOF expects construction investment to stagnate this year and house building to fall by 3 percent, primarily owing to an oversupply which has caused vacancy rates to rise. Consumer spending was forecast to grow a modest 0.8 percent this year.

Real wage growth is expected to remain modest this year and next.

The think tank said the Swiss National Bank is unlikely to raise its key interest rates before the ECB, and hence, rates in Switzerland will probably remain at their present levels for at least another year.

The current exchange rate was also expected to remain unchanged at 1.13 francs to the euro over the forecast horizon.


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"Kiwi" was the victim of softening the rhetoric of the New Zealand Central Bank, on the order of the "Aussie"?

Trading 27 mar 2019 Commentaire »

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The New Zealand dollar fell against the US namesake to a maximum of more than two weeks after the Central Bank of the country announced at the end of the next meeting that the next change in the interest rate may be its decline.

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"Apparently, the RBNZ has joined the number of previously committed "pigeon" reversal of the Central banks. The reaction to this event of the currency market clearly shows that investors were taken by surprise," said Kay Van-Petersen, an economist from Singapore.

"The pair NZD/USD can test the mark of 0.6737 in the next few sessions, and definitely within a month," he added.

"The fall of the kiwi was a shock because of the announcement of future changes in monetary policy by the New Zealand Central Bank and had a downward pressure, in particular, on the Australian dollar," said Jason Wong, currency strategist at Bank of New Zealand (BNZ).

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The weak statistics on China also had a negative impact on the Australian dollar.

According to the National Bureau of Statistics of China, in January-February, the profit of industrial enterprises of the country fell by 14% on an annualized basis. The reduction was the most significant since October 2011.

China is the largest trade and economic partner of Australia and the buyer of its commodities. The slowdown in the growth of the Chinese economy and the decline in imports from the Green Continent to the PRC adversely affect the Australian currency.

Next week, April 2, the next meeting of the Reserve Bank of Australia will be held. Most likely, the regulator will not change its monetary policy, but may soften the rhetoric by focusing on the possible reduction in interest rates. If the Central Bank will indeed follow such statements, then the Aussie could sharply fall in price, including against the US dollar.

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Bitcoin analysis for March 27, 2019

Trading 27 mar 2019 Commentaire »

BTC has been trading upward as we expected. All our upward targets were met. Potential overbought condition incoming.

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According to the H1 time – frame, we found that all 3 upward targets were met at $3.911, $3.936 and $3.975. Anyway, currently I see that there is 4-hour balance and bearish divergence on the Stochastic oscillator. We expect potential pullback in the next period. Support levels are seen at $3.967 and $3.951. Key resistance is seen at the price of $4.049.

Trading recommendation: We exited from our Long position on BTC with 3 targets reached. We are neutral now on the BTC but there is a potential for downside and potential testing of $3.967 and $3.951.

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GBP/USD analysis for March 27, 2019

Trading 27 mar 2019 Commentaire »

GBP/USD has been trading sideways at the price of 1.3200 but we expect the further upward movement and potential test of 1.3377

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Our analysis from yesterday is still valid. Gold price remains in a bullish short-term trend. The supply trendline has been broken and price remains above 1.3220. The last couple of sessions price mainly moves sideways between 1.3157 and 1.3260. This consolidation might be followed by a new bullish momentum towards 1.3377. There is also a confirmed inverted head and shoulders pattern, which is another sign of the potential strength. As long as the support at the price of 1.3155 we remain bullish.

Trading recommendation: We are long GBP from 1.3225 and with target at 1.3377. Protective stop is placed at 1.3140.

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