Dollar Gains Over Peers As Virus Fears Rise

Trading 03 oct 2020 Commentaire »

The U.S. dollar stayed largely positive against peers on Friday as risk sentiment weakened after President Donald Trump said that he and his wife tested positive for Covid-19.

France, Germany and Spain have all been reporting a surge in new coronavirus cases, and authorities in several countries are reportedly focusing on reining in nightlife to curb a marked rebound in virus infections.

Data from the Labor Department showed job growth in the U.S. slowed by much more than expected in the month of December, with non-farm payroll employment rising by 661,000 jobs, well short of an expected increase of 850,000 jobs. In August, non-farm payroll employment spiked by an upwardly revised 1.489 million jobs.

Despite the weaker than expected job growth, the report said the unemployment rate slid to 7.9% in September from 8.4% in August. The unemployment rate was expected to dip to 8.2%.

According to a report released by the Commerce Department today, factory orders rose by 0.7% in August after soaring by an upwardly revised 6.5% in July. Economists had expected orders to jump by 1% compared to the 6.4% spike originally reported for the previous month.

The report said orders for durable goods increased by 0.5%, while orders for non-durable goods climbed by 0.8%.

Meanwhile, revised data released by the University of Michigan showed consumer sentiment in the U.S. improved by more than previously estimated in the month of September, with the index upwardly revised to 80.4 from the preliminary reading of 78.9. Economists had expected the index to be upwardly revised to 79.0.

Against the Euro, the dollar was stronger by nearly 0.3%, trading at $1.715 per unit of euro. In early Asian session, the dollar was trading at $1.1697. Eurozone consumer prices decreased 0.3% on a yearly basis, following a 0.2% drop in August, data from Eurostat showed. Prices were expected to fall again by 0.2%. The 0.2% decrease in August was the first drop since May 2016.

The Pound Sterling firmed up to $1.2941 a unit, rising from $1.2887 Thursday evening.

The Yen was stronger at 105.38 a dollar, gaining from previous close of 105.55 a dollar.

The Aussie was weak more than 0.3% with the Aussie-Dollar pair at 0.7161 compared with 0.7185 on Thursday.

The Swiss franc weakened to 0.9206 a dollar, giving up about 0.2%, while the Loonie slipped to C$1.3302 from previous close of C$1.3289 a dollar.


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Treasuries Close Modestly Lower After Seeing Early Strength

Trading 03 oct 2020 Commentaire »

After moving to the upside early in the session, treasuries pulled back into negative territory over the course of morning trading on Friday.

Bond prices moved roughly sideways in afternoon trading, stuck modestly below the unchanged line. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.9 basis points to 0.696 percent.

Treasuries initially benefited from their appeal as a safe haven following news that President Donald Trump and First Lady Melania Trump have tested positive for the coronavirus.

"Tonight, @FLOTUS and I tested positive for COVID-19. We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!" Trump said in a post on Twitter early this morning.

The news comes just a month before Election Day and led to additional uncertainty about the outcome of the presidential election.

The early strength among treasuries also came after a closely watched report from the Labor Department showed U.S. job growth slowed by much more than anticipated September is also weighing on Wall Street.

The Labor Department said non-farm payroll employment rose by 661,000 jobs in September after spiking by an upwardly revised 1.489 million jobs in August.

Economists had expected employment to increase by 850,000 jobs compared to the jump of 1.371 million jobs originally reported for the previous month.

However, treasuries turned lower as traders speculated Trump's diagnosis and the disappointing data could put further pressure on lawmakers to pass a new stimulus bill.

House Speaker Nancy Pelosi said in an interview with CNBC that Trump's positive test "changes the dynamic" of stimulus talks and she still believes the two sides will "find our middle ground."

Following the slew of U.S. economic data released over the past week, the economic calendar for next week is relatively quiet.

Reports on service sector activity and the U.S. trade deficit may still attract some attention along with the minutes of the latest Federal Reserve meeting.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auction of three-year and ten-year note and thirty-year bonds.

Nonetheless, next week's trading may be driven more by reaction to the latest developments regarding a new coronavirus relief bill.


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Crude Oil Futures Settle Sharply Lower

Trading 03 oct 2020 Commentaire »

Crude oil futures ended sharply lower on Friday, weighed down by worries about outlook for energy demand amid reports of sharp spikes in coronavirus cases in several countries and fresh lockdown restrictions.

U.S. President Donald Trump's tweet that he and First Lady Melania Trump tested positive for Coronavirus further hurt oil prices.

In his tweet on Friday early morning, Trump said, "Tonight, @FLOTUS and I tested positive for COVID-19. We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!"

He had tweeted Thursday night that he and Melania Trump were starting quarantine after Hope Hicks, one of his closest aides, tested positive for the infection.

Rising supply levels and data showing a slower than expected growth in U.S. employment hurt oil prices.

West Texas Intermediate Crude oil futures for November ended down $1.67 or about 4.3% at $37.05 a barrel.

Brent crude futures declined $1.12 or 2.7% to $39.81 a barrel.

WTI crude oil futures contract shed almost 8% in the week.

In France, Minister of Health Olivier V?ran on Thursday warned that the capital Paris may go on maximum virus alert from Monday to control the spread of the virus.

In Germany, Spain and several other countries, authorities are focusing on reining in nightlife to curb a marked rebound in coronavirus infections that started in early July.

The Labor Department said non-farm payroll employment rose by 661,000 jobs in September after spiking by an upwardly revised 1.489 million jobs in August.

Economists had expected employment to increase by 850,000 jobs compared to the jump of 1.371 million jobs originally reported for the previous month.

Meanwhile, a report from Baker Hughes said the number of active U.S. rigs drilling for oil rose by 6 to 189 this week, after seeing an increase of 4 rigs in the previous week.

The total active U.S. rig count, meanwhile, increased by 5 to 266, according to Baker Hughes.


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Gold Futures Retreat After Early Gains, Settle Lower

Trading 03 oct 2020 Commentaire »

Gold futures came off two-week highs and settled lower on Friday as a recovery in stock markets dimmed the commodity's safe-haven appeal a bit.

Gold prices had moved higher in the Asian session, reacting to a tweet from U.S. President Donald Trump that he and his wife tested positive for Covid-19.

With the news raising uncertainty about the upcoming presidential election, the index futures plummeted and gold prices moved higher.

However, with the latest batch of economic data raising concerns about the economy and triggering hopes about a stimulus, stocks regained much of the lost ground and gold prices retreated.

The dollar index was steady at 93.82, up 0.11% from previous close.

Gold futures for December ended down $8.70 or about 0.5% at $1,907.60 an ounce, losing ground after rising to $1,9,23.60 earlier in the day, from a low of $1,895.20 touched in the Asian session.

Gold futures gained about 2.2% in the week.

Silver futures for December ended lower by $0.225 at $24.029 an ounce, while Copper futures for December settled at $2.9775 per pound, gaining $0.1120 for the session.

Data from the Labor Department showed jobs growth in the U.S. slowed by much more than expected in the month of December, with non-farm payroll employment rising by 661,000 jobs, well short of an expected increase of 850,000 jobs. In August, non-farm payroll employment spiked by an upwardly revised 1.489 million jobs.

Despite the weaker than expected job growth, the report said the unemployment rate slid to 7.9% in September from 8.4% in August. The unemployment rate was expected to dip to 8.2%.

According to a report released by the Commerce Department today, factory orders rose by 0.7% in August after soaring by an upwardly revised 6.5% in July. Economists had expected orders to jump by 1% compared to the 6.4% spike originally reported for the previous month.

The report said orders for durable goods increased by 0.5%, while orders for non-durable goods climbed by 0.8%.

Meanwhile, revised data released by the University of Michigan showed consumer sentiment in the U.S. improved by more than previously estimated in the month of September, with the index rising to upwardly revised 80.4 from the preliminary reading of 78.9. Economists had expected the index to be upwardly revised to 79.0.


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