09 November, 2018 16:55
Bearish trend gathers pace in oil market
Prices for oil slumped on Thursday, with Brent oil hitting the August bottom of 70.55/bbl. Bearish sentiments were fueled by soaring US Dollar after the bullish rhetorics of the US Federal Reserve. Additional pressure is said to come from weaker demand in the world amid global economic slowdown. Bulls can just expect that OPEC+ exporters will support the market during the upcoming meeting in Abu Dhabi. The oil organization may give a clear sign that everything is under their control as well as express readiness to limit oil production to prevent the oversupply.
08 November, 2018 17:22
Interest rate unlikely to change in November
The market is no longer focused on the election issue in the USA. Thus, risk aversion activities are fading away as well. Last week, second-tier currencies, including Indian rupee, South African rand, Turkish lira and Chilean peso enjoyed good demand. US Federal Reserve will most likely leave the interest rate unchanged after a this-week meeting. As a result, the rate will still be 2.00-2.25%, which in tandem with no scheduled press conference today will result in a moderate response of the markets. The markets reportedly plan to see balanced conditions once Donald Trump agrees upon monetary and fiscal softening. The event-trigger risks are likely to be low in 2019, and the global economic slowdown is already in the outlook. Stock prices may keep rising, while the greenback may move downwards.
07 November, 2018 14:11
Oil market suffers from negative reports
The oil market was full of negative reports over the past day – prices plunged below the 72 handle for the first time since late August, hitting $71.15/bbl. However, the rates somewhat managed to offset daily decline over Tuesday. Nevertheless, the quotes stay generally weak. Extra pressure also came from the outlook released by the US Department of Energy, which upgraded the outlook of oil extraction in the USA by 1.5% and 2.6% for 2018-2019 respectively.
06 November, 2018 15:46
Iran to record oil supplies collapse in November, some upturn possible later
Oil exports from Iran collapsed on extended US sanctions in mid-2018. However, the major importers from Iran are going to boost buying benefiting from softer restrictions granted by Washington. The USA met halfway the largest investors (India, China, South Korea, Japan, Italy, Greece, Taiwan and Turkey) and agreed to make some concessions regarding the restrictions. These countries can buy out at least some volumes for another 180 days, so oil exports can hike beginning from December.
02 November, 2018 17:30
Good labour market report can promote interest rate upturn
The US labour market has posted a good performance in October, including non-farm employment figures, as the report of US Department of Labour released today showed. Average hourly earnings rose 3.1% y-o-y, which came in line with the expectations. For reference, the last-month increase was 2.8% y-o-y. As for the unemployment rate, it stays low in the USA, expectedly reaching 3.7% in October, unchanged from September. According to the American economists, a job increase of 200,000 adds some 3% to US GDP. In October, we see as much as 250,000 in the non-farm segment and this fact will support the GDP growth unless this rate is recalculated and downgraded afterwards. The Federal Reserve pays attention to such data as non-farm payroll while determining further revision of the interest rate. In this case, the observed good results can promote further upward revision of the rate during the upcoming meeting of the Fed open market committee. At the same time, the currency market hardly reacted to this report, the market analyst noted.
01 November, 2018 15:59
Strong labour market report can support US dollar
The US dollar is losing grounds in the second half of the week, though ADP posted good enough labour market report. Earlier, traders used this report as a guideline for the outlook regarding the main report to be released on Friday. The private employment rate hiked by more than 200,000, which indicates that the US labour market in a good fettle now. However, fluctuations of the sentiments fueled US dollar weakening. Demand for the greenback as well as risk aversion activities slackened. Extra pressure on the US Dollar index came from the soaring sterling on the recent progress in the Brexit. Specifically, it was reported that the UK and EU representatives agreed that the UK financial companies will maintain access to the EU market after the divorce. In this situation, the sterling hit 1.29, with the euro follows to toe reaching 1.14.
30 October, 2018 17:04
Oil shortage fears fading away in the market
Oil prices decreased at a moderate pace during the Monday trading following the rebound recorded late last week. Brent oil failed to hit the 78 handle, and quotes fell below 77, which has been observed today as well. The commodities market has to cope with several challenges at the beginning of this week. First of all, the USA keeps raising drilling activity, which indicates possible hikes of shale oil production. This week, the players seem to become more optimistic. Specifically, risk assets are on the rise now driven by Donald Trump's statements concerning the long-awaited trade deal with Beijing.
30 October, 2018 15:27
Japanese yen can show rise later
The US dollar is getting higher vs the yen this week. The rate is again close to the 113.00 handle, though customers become more careful approaching the psychological level, which means possible profit taking in the market. Investors have become more optimistic about the long-lasting US-China trade war, following recent Trump's message in which he expressed confidence in the agreement with the Chinese party. With this message, the market is naturally somewhat lifting in spirits especially given the previous statements. However, as the market analyst noted, Donald Trump is well known for his changing opinion. However, we should not forget that the US president was not sure that Beijing was ready for the deal. As a result, this is definitely not a progress with the risk to persist.
29 October, 2018 16:51
Euro still can move downwards
The euro preserves in its attempts to rebound during the Monday trading session. Last Friday, the currency managed to jump from the bottom to some $1.1335. The 1.14 handle is the main battlefront now, as the break of this level may soften sellers' pressure on the euro-to-US dollar rate. S&P agency downgraded its rating outlook for Italy to negative last weekend. However, the rating remained unchanged. At the same time, players mostly feared that the rating would be decreased, and they were happy with such a decision. Meanwhile, in Italy, state bonds rebounded with such background, while the yield dipped.
29 October, 2018 14:35
Oil price upturn requires driver
Oil prices somewhat recovered last Friday. However, oil, in fact, finished the week in the red – the decline had been recorded for the third week in a row. Brent oil keeps trying to hit the 78 handles and move further. For now, the price stands at some $77. 67, after softening during the morning trading. The global stock markets still face selloffs. Specifically, the price upturn in the oil market was restrained last Friday by the US indexes collapse. At the same time, lower Asian benchmarks that can spread to the European markets put pressure on oil on Monday already.
26 October, 2018 15:18
Sterling likely to remain weak
The sterling is plunging vs the US dollar on Friday. For now, the currency has hit the bottom since early-September touching the 1.28-handle. Today, the market sees massive sterling selloffs. First of all, Theresa May's resignation is no longer so pressing one. Still, the no-deal Brexit issue still persists. In particular, the Irish border problem is yet to see the solution, while the UK economy seems to slow down. As a result, the sterling becomes less attractive with the players staying restless. Additional pressure comes for the general global market environment. The sterling is the risk asset and naturally depressed by the risk aversion in the market on the trade war and weaker oil.
24 October, 2018 16:30
Euro affected from many sides
With unclear changes during the Tuesday trading, the euro has resumed sliding in the mid-week. For now, the euro-to-US dollar exchange rate fell below 1.397, hitting a 2-month low in Europe, facing a number of factors. The key pressure is still coming from the so-called Italian dead end. The EU has not approved the proposed budget draft, while the Italian government has refused to meet the EU negotiators half way and revise the budget. As a result, the situation will most likely keep escalation and EU stance can get tighter, which definitely plays against the euro. The additional negative driver is strong demand for US dollar, which is gaining grounds almost everywhere today on anticipated PMI report in the USA.