Treasuries See Further Upside Amid Renewed Economic Worries

Trading 02 oct 2019 Commentaire »

Following the notable rebound seen over the course of the previous session, treasuries saw some further upside during trading on Wednesday.

Bond prices moved steadily higher in morning trading before moving roughly sideways in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.8 basis points to 1.596 percent.

Treasuries benefited from the appeal as a safe haven as disappointing jobs data from payroll processor ADP added to economic concerns raised by yesterday's weak manufacturing data.

ADP said private sector employment climbed by 135,000 jobs in September compared to economist estimates for an increase of about 140,000 jobs.

The report also showed a significant downward revision to the increase in private sector jobs in August, which was slashed to 157,000 jobs from the originally reported 195,000 jobs.

"Businesses have turned more cautious in their hiring," said Mark Zandi, chief economist of Moody's Analytics. "If businesses pull back any further, unemployment will begin to rise."

Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, noted the average monthly job growth for the past three months has fallen to 145,000 from 214,000 in the same time period last year.

On Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs.

Employment is expected to increase by 140,000 jobs in September after rising by 130,000 jobs in August, while the unemployment rate is expected to hold at 3.7 percent.

Reports on weekly jobless claims, service sector activity, and factory orders may attract attention on Thursday, although trading activity is likely to be somewhat subdued ahead of the release of the monthly jobs report on Friday.


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Oil Futures Settle Sharply Lower On Inventory Data, Growth Worries

Trading 02 oct 2019 Commentaire »

Crude oil prices declined sharply on Wednesday after data showed U.S. crude stockpiles rose for a third straight week and worries about a likely drop in global energy demand increased after disappointing manufacturing data from the U.S. and Europe.

West Texas Intermediate Crude oil futures for November ended down $0.98, or about 1.8%, at $52.64 a barrel.

On Tuesday, WTI crude oil futures ended down $0.45, or 0.8%, at $53.62 a barrel.

Data released by the Energy Information Administration (EIA) Wednesday morning showed oil inventories in the U.S. increased by 3.1 million barrels in the week ended September 27, nearly twice the expected jump.

The EIA report also said gasoline inventories for the week fell by about 230,000 barrels, much less than the expected drop. Meanwhile, distillate stockpiles dropped by about 2.4 million barrels, nearly 25% more than what was forecast.

A report released by the American Petroleum Institute late Tuesday showed U.S. crude stocks fell last week by 5.9 million barrels, contrary to expectations for an increase of 1.6 million barrels.

Gasoline stockpiles increased by 2.1 million barrels for the week ended Sept. 27, while distillate inventories fell by 1.7 million barrels.

Iran's oil minister Bijan Zanganeh sought to defuse tensions with Saudi Arabia on Wednesday, calling his counterpart in Riyadh "a friend" and saying Tehran was committed to stability in the region. The minister made this comment while he spoke at a top Russian energy conference chaired by President Vladimir Putin.

Zanganeh met Saudi energy minister, Prince Abdulaziz bin Salman and OPEC's Secretary General Mohammed Barkindo.

In economic news today, payroll processor ADP released a report showing private sector employment rose by slightly less than expected in the month of September.

ADP said private sector employment climbed by 135,000 jobs in September compared to economist estimates for an increase of about 140,000 jobs.

The report also showed a significant downward revision to the increase in private sector jobs in August, which was slashed to 157,000 jobs from the originally reported 195,000 jobs.


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Gold Futures Rise Again Safe-haven Appeal, Settle Above $1,500 Mark

Trading 02 oct 2019 Commentaire »

Gold prices moved higher as investors rushed for the safe-haven asset after riskier assets such as equities plunged sharply on mounting recession fears after recent disappointing manufacturing data from the U.S. and eurozone.

The dollar lost ground but gold prices kept moving higher. The dollar index dropped to 98.97, losing about 0.16% from previous close, amid expectations of another interest rate cut by the Federal Reserve.

Gold futures for December ended up $18.90, or about 1.3%, at $1,507.90 an ounce.

On Tuesday, gold futures for December ended up $16.10, or 1.1%, at $1,489.00 an ounce.

Silver futures for December ended up $0.381, at $17.683 an ounce, while Copper futures for December settled up $0.0100, at $2.5705 per pound.

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

The ISM's purchasing managers index dropped to 47.8 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.

Meanwhile, adding to signs of a slowdown in the U.S. job market, payroll processor ADP released a report on Wednesday showing private sector employment rose by slightly less than expected in the month of September.

ADP said private sector employment climbed by 135,000 jobs in September compared to economist estimates for an increase of about 140,000 jobs.

The report also showed a significant downward revision to the increase in private sector jobs in August, which was slashed to 157,000 jobs from the originally reported 195,000 jobs.

"Businesses have turned more cautious in their hiring," said Mark Zandi, chief economist of Moody's Analytics. "If businesses pull back any further, unemployment will begin to rise."


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Pound Appreciates After PM Johnson Unveils Final Brexit Plan

Trading 02 oct 2019 Commentaire »

The pound strengthened against its major counterparts in the New York session on Wednesday, after Prime Minister Boris Johnson made a promising speech in Manchester, reiterating his intention to "get Brexit done."

The final Brexit deal to be presented to the European Union is believed to have constructive and reasonable proposals which provide a compromise for both sides, the PM said at Conservatives' annual conference.

"We will under no circumstances have checks at or near the border in Northern Ireland. We will respect the peace process and the Good Friday agreement," he said.

"And by a process of renewable democratic consent by the executive and assembly of Northern Ireland we will go further and protect the existing regulatory arrangements for farmers and other businesses on both sides of the border."

"And at the same time we will allow the UK - whole and entire - to withdraw from the EU, with control of our own trade policy from the start," he added.

Survey data from IHS Markit showed that the UK construction sector contracted further in September.

The IHS Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index fell to 43.3 in September from 45.0 in August. The score was forecast to remain unchanged at 45.0.

The pound recovered to 1.2298 against the greenback, from an early low of 1.2227. The next possible resistance for the pound is seen around the 1.26 level.

Data from payroll processor ADP showed that private sector employment rose slightly less than expected in the month of September.

ADP said private sector employment climbed by 135,000 jobs in September compared to economist estimates for an increase of about 140,000 jobs.

The pound rose to 1.2319 against the franc, from an early low of 1.2191. If the pound rises further, it may find resistance around the 1.25 level.

Data from the Federal Statistical Office showed that Swiss consumer price inflation eased to the lowest in 33 months in September.

Inflation eased to 0.1 percent in September from 0.3 percent in August. Economists had forecast the rate to remain unchanged at 0.3 percent.

The pound bounced off to 0.8886 versus the euro, off an early low of 0.8924. The pound is seen finding resistance around the 0.86 mark.

The U.K. currency recovered slightly to 132.27 against the yen, from an early multi-week low of 131.58. Next key resistance for the pound is seen around the 134.00 level.

Data from the Cabinet Office showed that Japan's consumer confidence fell to the lowest level in more than eight years in September.

The consumer confidence index fell to a seasonally adjusted 35.6 in September from 37.1 in August.


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*U.S. Crude Oil Inventories Climb By 3.1 Million Barrels In Week Ended 9/27

Trading 02 oct 2019 Commentaire »

U.S. Crude Oil Inventories Climb By 3.1 Million Barrels In Week Ended 9/27


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Iceland Cuts Key Interest Rate For Fourth Time

Trading 02 oct 2019 Commentaire »

Iceland's central bank cut its key interest rate in October for the fourth successive rate-setting session, as growth continued to ease amid slowing inflation and uncertain economic outlook.

The Monetary Policy Committee of the Central Bank of Iceland, on Wednesday, decided to lower the key interest rate by 0.25 percentage points to a record low 3.25 percent.

Economic activity has been better than expected, but the outlook remains uncertain, particular for the global economy.

Hence, domestic economic growth could slow rapidly than is expected now, the bank said. That said, there are signs that the economy may rebound.

Modest tightening in the monetary stance has led to the appreciation of the krona and inflation expectations have fallen since the last policy meeting. Capital Economics expect the central bank to remain in easing mode over the coming months and reduce the rate to 2.75 percent by year-end.

"The accompanying statement to today's decision was more balanced than the overtly-dovish message that was delivered after?the previous meeting, on 28th?August," Capital Economics economist David Oxley said.

"All told, we now suspect that the CBI will cut interest rates by a further 25bp at the two remaining policy meetings this year, on 6th?November and 11th?December, which will take rates to a fresh all-time record low of 2.75 percent," the economist added.


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BTC 10.02.2019 – Sellers in control, watch for selling opportunities

Trading 02 oct 2019 Commentaire »

BTC is trading lower exactly what I expected yesterday.My analysis from yesterday is still active and I still expect more downside in the future and potential test of $7,730.

analytics5d94afdde6ec0.jpg

Red rectangle – Important resistance levels

Green rectangle – Important support and objective

Purple falling line – Expected path

I found broken bearish flag in the background based on the 1H time-frame and I do expect more downside yet to come. My advice is to watch for selling opportunities due to rejection of the important resistance level at $8,500 and the broken bearish flag most recently. The downward target is set at the price of $7,730.

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Dollar Mixed After ADP Private Payrolls Data

Trading 02 oct 2019 Commentaire »

The U.S. dollar showed mixed trading against its major counterparts in the European session on Wednesday, after the release of ADP data that showed U.S. private sector job growth improved less than forecasts in September.

Data from payroll processor ADP showed that private sector employment rose slightly less than expected in the month of September.

ADP said private sector employment climbed by 135,000 jobs in September compared to economist estimates for an increase of about 140,000 jobs.

The report also showed a significant downward revision to the increase in private sector jobs in August, which was slashed to 157,000 jobs from the originally reported 195,000 jobs.

The Labor Department is scheduled to release its more closely watched monthly jobs report on Friday.

Employment is expected to increase by 140,000 jobs in September after rising by 130,000 jobs in August, while the unemployment rate is expected to hold at 3.7 percent.

The currency was modestly higher against its major counterparts in the Asian session, excepting the euro.

The greenback advanced to more than a 4-month high of 1.0027 against the franc from an early 2-day low of 0.9921. The greenback is seen finding resistance around the 1.02 level.

Data from the Federal Statistical Office showed that Swiss consumer price inflation eased to the lowest in 33 months in September.

Inflation eased to 0.1 percent in September from 0.3 percent in August. Economists had forecast the rate to remain unchanged at 0.3 percent.

The greenback declined to a 6-day low of 107.45 against the yen from Tuesday's closing value of 107.74. The next possible support for the greenback is seen around the 106.00 level.

Data from the Cabinet Office showed that Japan's consumer confidence fell to the lowest level in more than eight years in September.

The consumer confidence index fell to a seasonally adjusted 35.6 in September from 37.1 in August.

The greenback edged down to 1.0935 against the euro, off an early high of 1.0904. The currency is likely to locate support around the 1.12 level.

Reversing from an early high of 1.2227 against the pound, the greenback weakened to 1.2298. On the downside, 1.27 is possibly seen as the next support level for the greenback.

Survey data from IHS Markit showed that the UK construction sector contracted further in September.

The IHS Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index fell to 43.3 in September from 45.0 in August. The score was forecast to remain unchanged at 45.0.


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October 2, 2019 : EUR/USD Intraday technical outlook and trade recommendations.

Trading 02 oct 2019 Commentaire »

analytics5d94acf224d13.jpg

On September 13, the EUR/USD pair was testing the backside of both broken trends around 1.1060-1.1080 where significant bearish pressure was demonstrated.

Shortly-After, Few DESCENDING-Tops were established around 1.1075 and 1.1060.

This rendered the recent bullish spike as a bullish trap.

Since then, the EURUSD has been trending-down within the depicted short-term bearish channel.

On September 23, a recent bullish pullback towards the price level of 1.1020 was obviously rejected by the end of last Tuesday's consolidations.

Bearish persistence below 1.0965 (recent daily bottom) enhanced more bearish decline towards 1.0930 and 1.0890 (Fibonacci Expansion 161.8%) where recent signs of bullish recovery is being demonstrated (Inverted Head & Shoulders Pattern).

Moreover, the EUR/USD is demonstrating a long-term Head & Shoulders continuation pattern extending between (1.0930 - 1.1080) with neckline located around 1.0940.

As long as bearish persistence below 1.0940 (Neckline) is maintained, Pattern projection target would remain projected towards 1.0840.

On the other hand, any bullish breakout above 1.0960 confirms the mentioned Inverted Head & Shoulders Pattern which opens the way for further bullish advancement towards 1.1030 (Pattern projection Target).

Trade recommendations :

Risky traders should wait for a bullish breakout above 1.0960 as a valid BUY signal.

Initial Target levels should be located at 1.1000 and 1.1030.

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GBP/USD 10.02.2019 – Bullish divergence on the 4H time-frame

Trading 02 oct 2019 Commentaire »

GBP price has been trading sideways at the price of 1.2275. Anyway, I still potential upside due to the bullish divergence in the background on the MACD and rejection of the support.

analytics5d94acd1d7517.jpg

Red rectangle – Important support

Green rectangle – Important resistance

Purple rising line – Expected path

MACD oscillator is showing bullish divergence and I do expect at least another push higher. Additionally, there is the successful rejection of the support at 1.2225 (red rectangle), which is another sign of the strength. Watch for buying opportunities on the dips using 5/15 minutes time-frame for better entries. The upward target is set at the price of 1.2330 (cluster of highs).

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