Dollar Loses Ground Against Rivals On Weak Economic Data

Trading 01 oct 2019 Commentaire »

The U.S. dollar retreated after surging to a near 30-month high Tuesday morning, and edged lower as the day progressed as disappointing data on manufacturing activity in September raised prospects for a rate cut by the Federal Reserve.

The dollar index rose to 99.67, a 29-month high, but declined to 99.07 an hour after noon, and was last seen at 99.13, down 0.25% from previous close.

A report from the Institute for Supply Management showed a continued contraction in U.S. manufacturing activity in the month of September.

The ISM said its purchasing managers index dropped to 47.8 in September from 49.1 in August. Economists had expected the index to inch up to 50.1.

With the unexpected decrease, the index fell to its lowest level since hitting 46.3 in June of 2009, the last month of the Great Recession.

President Donald Trump blamed the weak manufacturing data on the Federal Reserve, which he blasted as "pathetic" in a post on Twitter.

"As I predicted, Jay Powell and the Federal Reserve have allowed the Dollar to get so strong, especially relative to ALL other currencies, that our manufacturers are being negatively affected. Fed Rate too high. They are their own worst enemies, they don't have a clue. Pathetic!" Trump tweeted.

Against the Euro, the dollar was down 0.33% at 1.0937, after having strengthened to 1.0880 earlier in the day.

The euro area manufacturing sector contracted at the fastest pace in nearly seven years as output, new orders and purchasing fell sharply in September, final data from IHS Markit showed.

The final manufacturing Purchasing Managers' Index dropped to 45.7 in September from 47.0 in August.

Meanwhile, Eurozone inflation eased unexpectedly in September, coming in at 0.9%, compared to 1% in August, flash data from Eurostat showed. Core inflation rose to a 3-month high of 1% from 0.9% in August. The rate came in line with expectations.

The Pound Sterling was up 0.1% at $1.2307, after opening at $1,2289 and retreating to $1.2205 in early on in the session.

The Japanese yen gained in strength against the greenback, trading at 107.70 a dollar, up 0.35% from previous close of 108.08 a dollar.

The dollar was down 0.14% against the loonie at 1.3222, and down 0.5% against Swiss franc at 0.9924. Swiss retail sales declined at the fastest pace in eleven months in August, data from the Federal Statistical Office showed on Tuesday. Retail sales declined a working day adjusted 1.4% year-on-year in August, reversing a 1.5% rise in July. Against the Aussie, the dollar traded firm with the Aussie-Dollar pair quoting at 0.6704, following the Reserve Bank of Australia reducing its interest rates further as widely expected, on Tuesday.

The board of the Reserve Bank of Australia, governed by Philip Lowe, decided to reduce the cash rate by 25 basis points to 0.75%. The bank had earlier lowered its rate in June and July. The back-to-back rate cut in July was the first since mid-2012.


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Treasuries Show Significant Rebound On Weak Manufacturing Data

Trading 01 oct 2019 Commentaire »

After an early move to the downside, treasuries showed a significant rebound over the course of morning trading on Tuesday.

Bond prices pulled back off their best levels in afternoon trading but remained firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 1.644 percent.

Treasuries showed a strong move to the upside following the release of a report from the Institute for Supply Management showing a continued contraction in U.S. manufacturing activity in the month of September.

The ISM said its purchasing managers index dropped to 47.8 in September from 49.1 in August, with a reading below 50 indicating a contraction in manufacturing activity. Economists had expected the index to inch up to 50.1.

With the unexpected decrease, the index fell to its lowest level since hitting 46.3 in June of 2009, the last month of the Great Recession.

Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee, noted the contraction continues six straight months of softening in manufacturing.

"Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019," Fiore said. "Overall, sentiment this month remains cautious regarding near-term growth."

The new export orders index slid to 41.0 in September from 43.3 in August, falling to its lowest level since hitting 39.4 in March of 2009.

Economists noted the disappointing data may also reflect the ongoing strike at General Motors (GM), which has also begun to affect production at suppliers.

Meanwhile, President Donald Trump blamed the weak manufacturing data on the Federal Reserve, which he blasted as "pathetic" in a post on Twitter.

"As I predicted, Jay Powell and the Federal Reserve have allowed the Dollar to get so strong, especially relative to ALL other currencies, that our manufacturers are being negatively affected. Fed Rate too high. They are their own worst enemies, they don't have a clue. Pathetic!" Trump tweeted.

Trading on Wednesday may be impacted by reaction to payroll processor ADP's report on private sector employment in the month of September.


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Oil Retreats After Firm Start, End Notably Lower Ahead Of Inventory Data

Trading 01 oct 2019 Commentaire »

Crude oil prices drifted lower on Tuesday as weak economic data from across the globe continued to raise concerns about the outlook for energy demand.

Also, traders were reluctant to go long in futures ahead of weekly inventory data from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API's weekly oil report is due later in the day, while EIA is scheduled to release its inventory data Wednesday morning.

West Texas Intermediate Crude oil futures for November ended down $0.45, or about 0.8%, at $53.62 a barrel, after having advanced to $54.84 earlier in the session.

On Monday, WTI Crude oil futures for November ended down $1.84, or 3.3%, at $54.07 a barrel, the lowest settlement in about a month.

Oil's early uptick was due to a report from Reuters that OPEC's output fell to the lowest in eight years in September at 28.9 million barrels per day, down 750,000 barrels per day from August's revised figure.

Oil was also supported by the drop in output in the United States and Russia in September, to 11.25 million barrels and 276,000 barrels per day, respectively.

Data from the Institute for Supply Management showed a continued contraction in U.S. manufacturing activity in the month of September. ISM said its purchasing managers index dropped to 47.8 in September from 49.1 in August. Economists had expected the index to inch up to 50.1.

With the unexpected decrease, the index fell to its lowest level since hitting 46.3 in June of 2009, the last month of the Great Recession.

Traders also noted the news about Ecuador's decision to leave the Organization of the Petroleum Exporting Countries on January 1, 2020 as its government seeks ways to boost revenue.

Ecuador will withdraw from the 14-nation Organization of the Petroleum Exporting Countries (OPEC) from January 1, 2020 because of fiscal problems, the country's energy ministry said on Tuesday.

Ecuador is reportedly attempting to increase its production of crude oil in a bid to raise more income. The nation had at several occasions not compiled with the output quota fixed by OPEC.


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Gold Futures Rebound On Weak Economic Data, Settle Notably Higher

Trading 01 oct 2019 Commentaire »

Gold prices moved higher on Tuesday on safe-haven appeal after data showed a significant contraction in U.S. manufacturing activity in the month of September and economic reports from several parts of Europe too continued to raise concerns about global growth.

The dollar's retreat from higher levels limited gold's gains. The dollar index, which rose to 99.67 in morning trades, eased subsequently to 99.07, and was last seen at 99.19, down 0.19% from previous close.

Gold futures for December, which dropped to $1,465.00 earlier in the session, ended up $16.10, or about 1.1%, at $1,489.00 an ounce, after rising to a high of $1,493.50 intraday.

On Monday, gold futures for December ended down $33.50, or 2.2%, at $1,472.90 an ounce, the lowest settlement in almost two months.

Silver futures for December ended up $0.304, at $17.302 an ounce, while Copper futures for December settled at $2.5605 per pound, down $0.0180 from previous close.

A report from the Institute for Supply Management showed a continued contraction in U.S. manufacturing activity in the month of September.

The ISM said its purchasing managers index dropped to 47.8 in September from 49.1 in August. Economists had expected the index to inch up to 50.1.

With the unexpected decrease, the index fell to its lowest level since hitting 46.3 in June of 2009, the last month of the Great Recession.

Meanwhile, a report from the Commerce Department said construction spending in the U.S. crept up by much less than expected in the month of August, inching up by just 0.1% to an annual rate of $1.287 trillion, after coming in nearly unchanged at a revised July estimate of $1.286 trillion.

Economists had expected construction spending to climb by 0.4% compared to the 0.1% uptick originally reported for the previous month.


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

Trading 01 oct 2019 Commentaire »

analytics5d93717368020.jpgIn Early August, another consolidation-range was temporarily established between the price levels of (1.2100 - 1.2220) except on August 9 when temporary bearish decline below 1.2100 was executed towards 1.2025 (Previous Weekly-Bottom).

Since then, the GBP/USD pair has been trending-up within the depicted bullish channel except on September 3 when a temporary bearish breakout was demonstrated towards 1.1960.

Around the price level of 1.1960, aggressive signs of bullish recovery (Bullish Engulfing candlesticks) brought the GBPUSD back above 1.2230 where the pair looked overbought.

However, further bullish momentum was demonstrated towards 1.2320 maintaining the bullish movement inside the depicted movement channel.

Moreover, Temporary bullish advancement was demonstrated towards 1.2550 where a reversal wedge pattern was established.

As anticipated, the reversal wedge pattern was confirmed by the end of the previous Monday's consolidations supported by obvious bearish price action demonstrating a successful bearish closure below 1.2450.

On Tuesday, the backside of the confirmed reversal wedge was successfully re-tested around 1.2500 where a new episode of bearish rejection was expressed.

The Long-term outlook remains bearish as long as the most recent top established around 1.2500 remains defended by the GBP/USD bears.

Bearish persistence below 1.2440-1.2400 (Reversal-Pattern Neckline) allowed more bearish decline to occur towards the price levels of 1.2210 where early signs of bullish rejection is being demonstrated Today.

Trade Recommendations:

Conservative traders can wait for bullish pullback towards the backside of the broken channel (Anywhere around 1.2400-1.2450) for another valid SELL entry.

T/P level to be placed around 1.2360, 1.2330 and 1.2280 while S/L should be set as a H4 candlestick closure above 1.2450.

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U.S. Construction Spending Inches Up Less Than Expected In August

Trading 01 oct 2019 Commentaire »

Construction spending in the U.S. crept up by much less than expected in the month of August, according to a report released by the Commerce Department on Tuesday.

The report said construction spending inched up by 0.1 percent to an annual rate of $1.287 trillion in August after coming in nearly unchanged at a revised July estimate of $1.286 trillion.

Economists had expected construction spending to climb by 0.4 percent compared to the 0.1 percent uptick originally reported for the previous month.

The modest increase in construction spending came as spending on public construction climbed by 0.4 percent to a rate of $332.3 billion in August from $330.8 billion in July.

Spending on educational construction surged up by 1.4 percent to $77.0 billion, while spending on highway construction rose by 0.6 percent to $98.9 billion.

Meanwhile, the report said the annual rate of spending on private construction in September was nearly unchanged from the previous month at $955.0 billion.

Spending on residential construction increased by 0.9 percent to a rate of $507.2 billion, but the jump was offset by a 1.0 percent slump in spending on non-residential construction to a rate of $447.9 billion.

Compared to the same month a year ago, construction spending in August was down by 1.9 percent, with a 4.0 percent nosedive in spending on private construction more than offsetting a 4.6 percent spike in spending on public construction.


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U.S. Manufacturing Activity Continues To Contract In September

Trading 01 oct 2019 Commentaire »

A report released by the Institute for Supply Management on Tuesday showed U.S. manufacturing activity continued to contract in the month of September.

The ISM said its purchasing managers index dropped to 47.8 in September from 49.1 in August, with a reading below 50 indicating a contraction in manufacturing activity. Economists had expected the index to inch up to 50.1.

With the unexpected decrease, the index fell to its lowest level since hitting 46.3 in June of 2009, the last month of the Great Recession.

Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee, noted the contraction continues six straight months of softening in manufacturing.

"Global trade remains the most significant issue, as demonstrated by the contraction in new export orders that began in July 2019," Fiore said. "Overall, sentiment this month remains cautious regarding near-term growth."

The new export orders index slid to 41.0 in September from 43.3 in August, falling to its lowest level since hitting 39.4 in March of 2009.

The contraction in new export orders negatively impacted the new orders index, which crept up to 47.3 in September from 47.2 in August but still indicated a contraction.

The ISM also said the production index fell to 47.3 in September from 49.5 in August, while the employment index dipped to 46.3 from 47.4.

Meanwhile, the report said the prices index climbed to 49.7 in September from 46.0 in August, indicating prices decreased at a slower rate.

The ISM is scheduled to release a separate report on service sector activity on Thursday. The non-manufacturing index is expected to slip to 55.0 in September from 56.4 in August.


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Poland Manufacturing Sector Deteriorates Further

Trading 01 oct 2019 Commentaire »

Poland's manufacturing sector contracted for an eleventh consecutive month in September amid a sharp fall in new orders, survey data from IHS Markit showed on Tuesday.

The manufacturing purchasing managers' index, or PMI, fell to 47.8 in September from 48.8 in August. Economists had forecast a score of 48.0. Any reading, below 50 indicates a contraction in the sector.

New business and output decreased for the eleventh straight month in September. The rate of contraction in the new business was the joint-fastest in over ten years.

Backlogs of work decreased at the fastest rates in the past six years. Though output fell more quickly, stocks of finished goods were accumulated for the seventh time from the beginning of the year.

Purchasing activity fell at the strongest rate since April 2013 and stocks of inputs contracted for the third month in a row. Employment declined marginally in September.

On the price front, input prices rose at the fastest rate in four months, while output prices remained unchanged in September.

"Although output continued to fall by less than new business - largely thanks to work on backlogs - the 12-month outlook for production is the weakest since this series was first compiled in 2012," Trevor Balchin, economics director at IHS Markit, said.

"Firms highlighted poor demand from Western European markets such as Germany and France, which tallies with the weak flash eurozone manufacturing PMI data released in late-September."


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Italy Manufacturing Weakest In 6 Months

Trading 01 oct 2019 Commentaire »

Italy's manufacturing sector conditions deteriorated at the fastest pace in six months in September, amid a fall in both output and new orders, survey data from IHS Markit showed on Tuesday.

The manufacturing purchasing managers' index, or PMI, fell to 47.8 in September from 48.7 in August. Economists had forecast a score of 48.1. However, any reading below 50 indicates a contraction in the sector.

Output and new orders decreased for the fourteenth straight month.

Manufacturing output decreased at the fastest pace since April and new orders fell at the sharpest rate in six months.

Manufacturers decreased their workforce numbers, which lead to a marginal decline in the headcount that was faster than seen in August. Jobs were trimmed for the fourth month in a row in September. Backlogs of work declined at the fastest pace since August last year.

On the price front, input prices and output charges fell in September. Prices of raw material were lowered and output charges decreased as manufacturers tried to a attract customer orders.

Business confidence regarding the year ahead outlook for output weakened to the lowest in nine months in September.

"The downturn appears to be entrenched with further declines in employment and purchasing activity recorded in September," Amritpal Virdee, economist at IHS Markit, said.

"As such, latest PMI data suggest that the manufacturing economy is limping towards the final quarter of the year and, on its current trajectory, will end up smaller than when it entered the downturn in early-2018."


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*U.S. Construction Spending Inches Up 0.1% In August

Trading 01 oct 2019 Commentaire »

U.S. Construction Spending Inches Up 0.1% In August


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