Market Outlook by Broker Arena

ijak8510

Trader
Sep 29, 2015
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Dollar fails to sustain gains on weak US production figures and step back on crude market


March industrial production in the US fell more than expected, battering the optimism about the health of the US economy, official data showed on Friday.

The Fed report showed that in the past month, the volume of industrial production decreased by 0.6% with a seasonal adjustments, more than the expected drop of 0.1%.

In February, industrial production fell by 0.6%, the figure was revised down from a preliminary estimate of 0.5%.

Processing industries production decreased 0.3% last month with taking into account seasonal adjustments, missing forecasts for growth of 0.1%, after declining by 0.1% in February, the figure was revised down from the initial estimate of growth at 0,1%.

The report also showed that the capacity utilization rate fell to 74.8% in March, compared with 75.3% a month earlier. The February figure was revised down from the original estimate of 76.7%.

Analysts had expected a smaller decline to 75.4%.

The EUR/USD was trading at 1.1282, up from 1.1273 in anticipation of the release of the data, the pair GBP/USD was trading at 1.4174, up from 1.4155, while the pair USD/JPY was trading at 108.90, bounced from 108.84 support earlier in the session.

USD index, which shows the value of the US dollar against a basket of major currencies, was held at 94.79, down from 94.86 the day before the report.

Futures on US stock indexes pointed to a lower Wall Street opening. Futures on the Dow fell 0.10%, futures on the S & P 500 fell by 0.16%, while the Nasdaq 100 futures fell 0.24%.

On the commodities market, gold futures were trading at $ 1230.70 an ounce, compared with $ 1233.00 before the release of the data, while crude oil futures were trading at $ 40.51 per barrel, up from $ 40.38.

The greenback weakened in Friday against its major peers due to falling oil prices ahead of a meeting of producer countries in Doha, as well as the weak data on consumer sentiment in the US which have reduced risk appetite, causing investors to buy safe currencies such as the Japanese yen .

The dollar index, which tracks the value of US currency against a basket of six major rivals, unwind gains after the growth over the past two days. The decrease of US currency against the yen on Friday was the largest one-day decline in more than a week.

“Perhaps there is some concern about the Doha negotiations”, – said a senior currency strategist at Scotiabank in Toronto Sean Osborne.

Producers of oil, led by Saudi Arabia and Russia are scheduled to meet in the Qatari capital on Sunday, April 17 to discuss the freeze of production close to current levels and solve the problem of oversupply on world markets.

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ijak8510

Trader
Sep 29, 2015
83
6
19
36
Oil sticks near $50, shorts positions drop to June 2015 low


Oil prices fell to $49 area on Monday as Iraq increased target level of exports in anticipation of the OPEC meeting, while production in the Canadian oil sands region should recover from large-scale wildfires.

Attention turned to the OPEC meeting in Vienna this week, although most analysts do not expect any changes in the oil cartel.

Member countries could not agree on freezing production in an attempt to support prices while Iraq became another manufacturer in the Middle East which announced boosting export to 5 million b/day in June.



WTI Oil futures were traded at $ 49.29 a barrel, falling 0.1 percent at the close of London session.

Futures on Brent decreased 0.1 per cent to $ 49.27.

Impact on the quotes also had a strengthening US dollar on the background of rising expectations of an interest rate increase in the United States in the near future.

Crude short positions decreased to less than 60K in May versus 160K in the beginning of March when price was at $32/barrel, signaling markets make light of the possibility of collapse on the energy market:



However, trading volumes were limited due to public holidays in Britain and the United States, where Memorial Day, which is celebrated in Monday, is considered the beginning of the summer season, with rising demand on gasoline due to an increase in automotive traveling.

Vienna-based JBC Energy consulting company reported that global oil demand in the January-April 2016 year grew by 1.5 million barrels per day compared with the previous year, surpassing most forecasts thanks to strong consumption in the United States, China and India.

Oil production in the United States declined to a minimum since September 2014 year after the number of drilling rigs has dropped the ninth week of the last ten, despite the recent rally in oil prices.

Expected recovery of oil production in the Canadian oil sands region also had its pressure on WTI. Suncor Energy plans to increase production at its oil fields in Alberta this week after the suspension of works previously in may due to large forest fires.

Supply disruptions due to fires in Canada and unrest in Libya and Nigeria pushed oil to seven-months peaks in recent weeks.


Source : Market News and Analytics