Oil Futures End Higher As OPEC Decides To Extend Output Cuts

Trading 01 juil 2019 Commentaire »

Crude oil futures ended notably higher on Monday, despite giving up a substantial portion of its earlier gains.

Oil's surge was due to OPEC's decision to extend its current 1.2 million barrel per day output cuts for another nine months instead of the expected six month extension. Final details will be out after the cartel's meeting with Russia and other top nonmember producers on Tuesday, the second day of the meeting in Vienna.

West Texas Intermediate crude oil futures ended up $0.62, or 1.1%, at $59.09 a barrel, after hitting a high of $60.28 a barrel earlier in the session.

Brent Crude oil futures moved past $65.00 a barrel mark.

On Friday, WTI crude oil futures for August ended down $0.96, or 1.6%, at $58.47 a barrel.

WTI oil futures gained 1.8% last week, and climbed up more than 9% in June.

Oil prices rose sharply Monday morning, reacting to reports that the Organization of Petroleum Exporting Countries (OPEC) may continue to cut production till 2020 in order to bolster oil prices.

Reports also suggested that Russia and Saudi Arabia will likely agree with the decision.

Saudi Arabia's Energy Minister Khalid al-Falih reportedly said most OPEC members would like to see a nine-month deal extension.

Reports about Iran breaching its nuclear agreement played a role as well in lifting oil prices. Reuters quoted Iran's Foreign Minister Mohammad Javad Zarif as saying that Iran breached the limit of its enriched uranium stockpile set in 2015. Zarif reportedly confirmed that Iran had gone over the relevant limit of 300 kg of uranium.

Oil's uptick was also supported by the U.S.-China trade truce that came about after the U.S. President Donald Trump and the Chinese President Xi Jinping met on the sidelines of the G20 summit on Saturday.


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Treasuries Move To The Downside In Reaction To Trump-Xi Meeting

Trading 01 juil 2019 Commentaire »

Treasuries recovered from an initial move to the downside on Monday only to pull back once again as the trading day progressed.

Bond prices climbed off their worst levels late in the day but still closed firmly in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 3.4 basis points to 2.034 percent.

The weakness among treasuries came after President Donald Trump and Chinese President Xi Jinping agreed to restart stalled trade negotiations.

Trump met with Xi on the sidelines of the G20 summit in Osaka, Japan, over the weekend, telling reporters the meeting was "excellent, as good as it was going to be" and "we're right back on track."

In his closing G20 press conference, Trump revealed that he will not follow through on threats to raise tariffs on all remaining Chinese imports "at least for the time being."

The president also suggested that the U.S. would allow American companies to sell products to Chinese tech giant Huawei that do not pose national security concerns.

In return for holding off on tariffs and loosening restrictions on sales to Huawei, Trump said China has agreed to purchase large quantities of U.S. agricultural products.

Trump noted that existing tariffs on Chinese imports will remain in place, suggesting the U.S.-China trade dispute could still act as headwind to the global economy unless the conflict is eventually resolved.

"The quality of the transaction is far more important to me than speed," Trump said in a post on Twitter. "I am in no hurry, but things look very good!"

Treasuries staged an early recovery attempt after a report from the Institute for Supply Management showing a continued slowdown in the pace of growth in U.S. manufacturing activity in the month of June.

The ISM said its purchasing managers index edged down to 51.7 in June after slipping to 52.1 in May, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to dip to 51.0.

With the continued decrease, the index dropped to its lowest level since hitting a matching reading in October of 2016.

"Comments from the panel reflect continued expanding business strength, but at soft levels; June was the third straight month with slowing PMI expansion," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.

"Respondents expressed concern about U.S.-China trade turbulence, potential Mexico trade actions and the global economy," he added. "Overall, sentiment this month is evenly mixed."

Selling pressure re-emerged shortly afterward, however, as traders express optimism the U.S. and China will eventually reach a long-term trade deal.

Trading activity may be somewhat subdued on Tuesday, as a lack of major U.S. economic may keep some traders on the sidelines ahead of the holiday on Thursday.


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Gold Ends Sharply Lower On U.S.-China Trade Truce

Trading 01 juil 2019 Commentaire »

Gold prices tumbled on Monday as the dollar rose against major currencies and equities gained in strength, as worries about trade eased after the U.S. and China agreed to resume trade talks.

Following the meeting between the U.S. President Donald Trump and Chinese President Xi Jinping on the sidelines of the G20 summit in Japan on Saturday, the two countries have decided to resume trade negotiations and to not impose additional tariffs on each other's products.

Global equities surged higher as risk appetite increased and the dollar gained against major currencies, rendering the yellow metal quite weak.

The dollar index jumped to 96.87, gaining about 0.75%.

Gold futures for August ended down $24.40, or 1.7%, at $1,389.30 an ounce, recording the biggest single-session loss in about a year.

On Friday, gold futures for August ended up $1.70, or 0.1%, at $1,413.70 an ounce, the highest settlement in six years. For the week, gold futures added about 1%.

Gold futures gained over 7.7% in June, the best monthly returns in about three years.

Silver futures for September ended down $0.148, at $15.193 an ounce, while Copper futures for September settled lower by $0.0255, at $2.6880 per pound.

Following the decision to call truce, the Unites States agreed to put off additional tariffs on Chinese goods indefinitely while removing some curbs on Huawei Technologies Co. buying high-tech equipment from the U.S.

In response, China agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table.

China and the United States will face a long road before they can reach a deal to end their bitter trade war, with more fights ahead likely, Chinese state media reported on Sunday after the two sides said they would continue talks.

"Things are still very much up in the air," the official China Daily said in an editorial.

Trump told reported that his meeting with Xi was "excellent, as good as it was going to be" and "we're right back on track."

In his closing G20 press conference, Trump revealed that he will not follow through on threats to raise tariffs on all remaining Chinese imports "at least for the time being."

Trump noted that existing tariffs on Chinese imports will remain in place, suggesting the U.S.-China trade dispute could still act as headwind to the global economy unless the conflict is eventually resolved.

"The quality of the transaction is far more important to me than speed," Trump said in a post on Twitter. "I am in no hurry, but things look very good!"

In economic news, a report from the Institute for Supply Management showed a modest slowdown in the pace of growth in U.S. manufacturing activity in the month of June.

The ISM said its purchasing managers index edged down to the lowest level since October 2016, falling to 51.7 in June after slipping to 52.1 in May. Economists had expected the index to dip to 51.0.

Meanwhile, a report from the Commerce Department said construction spending slid by 0.8% to an annual rate of $1.294 trillion in May after climbing by a revised 0.4% to a rate of $1.304 trillion in April.

Economists had expected construction spending to remain roughly flat after the data originally reported for the previous month showed spending was virtually unchanged.


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July 1, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 01 juil 2019 Commentaire »

analytics5d1a2faa2ace6.jpg

Since May 17, the depicted sideway consolidation range has been established between 1.2750 - 1.2570 with a prominent key-level around 1.2650.

On June 4, temporary bullish consolidations above 1.2650 were demonstrated for a few trading sessions.

This enhanced the bullish side of the market towards 1.2750 (consolidation range upper limit) which has been preventing further bullish advancement up till now.

Recently, the GBP/USD failed to establish a successful bullish breakout above 1.2750. Instead, early signs of bearish rejection have been manifested (Head & Shoulders reversal pattern with neckline located around 1.2650).

A quick bearish pullback towards 1.2650 was expected shortly.

Bearish breakdown below 1.2650 (reversal pattern neckline) confirms the reversal pattern with bearish projection target located at 1.2510.

On H4 chart, Obvious Bearish breakdown below 1.2570 confirms a trend reversal into bearish on the intermediate term. Immediate bearish decline would be expected towards 1.2505 initially.

On the other hand, a bullish position can be considered only if EARLY Bullish persistence above 1.2650 is achieved on the current H4 chart.

Trade Recommendations:

Intraday traders can have a valid BUY Entry upon bullish re-closure above 1.2650.

T/P levels to be located around 1.2750, 1.2840, 1.2900. S/L should be placed below 1.2570.

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Westpac: RBA To Cut Key Rate By 25 Bps On July 2

Trading 01 juil 2019 Commentaire »

The Reserve Bank of Australia is set to slash its cash rate by 25 basis points to 1 percent on Tuesday, Westpac said in a weekly note.

Economists Bill Evans and Matthew Hassan said they had brought forward the timing from August to July mainly due to explicit signals from RBA Governor Philip Lowe, which they described as "unusually direct".

"It is about as far as the Governor can go with forward guidance given that he cannot pre-commit to a decision that is decided by the RBA Board as a whole," the Westpac economists said.

They said the RBA communication accompanying the decision will be of close interest as the bank may re-craft the wording in the statement if policymakers expect "a different tempo and conditionality around future moves."

Westpac expects the RBA to focus more on macroeconomic forecasts beyond July, and is likely to leave them unchanged in the August policy statement. However, the economists added that downside risks to the outlook have increase due to the government's intense focus on reducing the unemployment rate.

In May, RBA forecast 2.75 percent growth this year and next and core inflation climbing to 2 percent next year from 1.75 percent this year.

"Beyond July we continue to expect a further 25bp cut with November the most likely window for a final move taking the rate to 0.75 percent," Evans and Hassan said.


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U.S. Construction Spending Unexpectedly Pulls Back In May

Trading 01 juil 2019 Commentaire »

With revised data showing an increase in U.S. construction spending in the previous month, the Commerce Department released a report on Monday showing construction spending pulled back in the month of May.

The report said construction spending slid by 0.8 percent to an annual rate of $1.294 trillion in May after climbing by a revised 0.4 percent to a rate of $1.304 trillion in April.

Economists had expected construction spending to remain roughly flat after the data originally reported for the previous month showed spending was virtually unchanged.

Spending on private construction dropped by 0.7 percent to a rate of $953.2 billion, as spending on residential construction fell by 0.6 percent to a rate of $498.9 billion and spending on non-residential construction slumped by 0.9 percent to a rate of $454.3 billion.

The Commerce Department said spending on public construction also declined by 0.9 percent to a rate of $340.6 billion, with spending on highway construction plunging by 3.2 percent to a rate of $111.6 billion.

Compared to the same month a year ago, construction spending in May was down by 2.3 percent, with a 6.3 percent nosedive in spending on private construction more than offsetting a 10.8 percent jump in spending on public construction.


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U.S. Manufacturing Index Drops To Lowest Level Since October 2016

Trading 01 juil 2019 Commentaire »

Reflecting concerns about trade and the global economy, the Institute for Supply Management released a report on Monday showing a modest slowdown in the pace of growth in U.S. manufacturing activity in the month of June.

The ISM said its purchasing managers index edged down to 51.7 in June after slipping to 52.1 in May, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to dip to 51.0.

With the continued decrease, the index dropped to its lowest level since hitting a matching reading in October of 2016.

"Comments from the panel reflect continued expanding business strength, but at soft levels; June was the third straight month with slowing PMI expansion," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.

"Respondents expressed concern about U.S.-China trade turbulence, potential Mexico trade actions and the global economy," he added. "Overall, sentiment this month is evenly mixed."

The modest slowdown in manufacturing growth came as new orders were unchanged following 41 consecutive months of growth, with the new orders index dropping to 50.0 in June from 52.7 in May.

Meanwhile, the report said the production index climbed to 54.1 in June from 51.3 in May, indicating an acceleration in the pace of growth.

The employment index also crept up 54.5 in June from 53.7 in June, with Fiore noting comments were "predominantly 'pro hire' in support of capacity expansion, replacing retiring workers and adding summer help."

On the inflation front, the ISM said the prices index tumbled to 47.9 in June from 53.2 in May, pointing to the first contraction in prices since February.

"Shortages and price increases remain in electronic components and food ingredients; they are offset by copper, steel, energy and aluminum price declines," said Fiore.

The ISM is scheduled to release a separate report on activity in the U.S. service sector in the month of June on Wednesday.

The non-manufacturing index is expected to edge down to 56.0 in June after climbing to 56.9 in May, with a reading above 50 indicating service sector growth.


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Capital Economics: Swiss Manufacturing Growth To Remain Sluggish

Trading 01 juil 2019 Commentaire »

Switzerland's purchasing managers' survey data, released on Monday, suggest that growth in the manufacturing sector is set remain sluggish over the rest of the year, Capital Economics said.

The Credit Suisse Swiss PMI declined to 47.7 in June from 48.6 in May, defying economists' expectations for a modest improvement to 49. The latest level of the PMI was the lowest since October 2012.

A PMI reading below 50 suggest contraction in the sector.

The survey suggest that conditions in the Swiss industrial sector have worsened going into the second half of the year, Capital Economics Senior Europe Economist David Oxley said.

The economist pointed out that the weakness in the Swiss manufacturing sector has come alongside continued troubles in its counterpart in neighboring Germany, into which it is closely integrated through supply chains.


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BITCOIN to break below $10,000 again? July 1, 2019

Trading 01 juil 2019 Commentaire »

Bitcoin gained bearish momentum which pushed the price to the level below $10,500. The price may decline towards the psychological area of $10,000 in the short term.

The Bitcoin market has been stronger than ever, but its price is following the bearish bias inside the long-awaited correction. At the weekend, the market siggested the scenario that the bulls could push the price higher. However, those thoughts have been ditched today as markets continue to dump. The BTC has shed over 10% in last 24 hours as the crypto markets shrank $25 billion recently. The weekly closing candle also indicates that further losses could be imminent as indecision between bulls and bears could signal a short-term trend reversal.

Bitcoin is currently trading in range between $10,000 and $14,000 over the next couple of weeks. The biggest targets of $20,000 and $25,000 may be reached quite faster than previous times. A little sideways action may not be a bad thing for Bitcoin. It would allow more accumulation and may give some of the altcoins time to wake from their long hibernation.

To sum it up, most analysts share the viewpoint that Bitcoin is making a correctional decline which might lead to further indecision. Though the price is currently trading above $10,000 under a strong bullish bias market sentiment, the ongoing bearish pressure is now stronger in comparison to previous retracements. As the price remains above $10,000, it is expected to bounce back towards $14,000 and later towards $15,000 and then $20,000 or so. Nevertheless, before pushing higher under such impulsive pressure, certain correction and volatility is imminent for BTC in the nearest days.

SUPPORT: 9,800, 10,000

RESISTANCE: 10,500, 11,000, 12,000

BIAS: BULLISH

MOMENTUM: VOLATILE

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Dollar Gains After U.S. Construction Spending, ISM Manufacturing Index

Trading 01 juil 2019 Commentaire »

Following the release of the U.S. construction spending for May and ISM manufacturing index for June at 10:00 am ET Monday, the greenback rose against its major rivals.

The greenback was trading at 108.35 against the yen, 0.9848 against the franc, 1.1324 against the euro and 1.2637 against the pound around 10:01 am ET.


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