2023-10-12 03:13

Copyrighted Image by: Reuters Investing.com - The U.S. dollar slipped lower in early European trade Thursday, hovering near a two-week low ahead of the release of key U.S. inflation data. At 03:15 ET (07:15 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% lower at 105.377, just above the day’s low, the weakest level in two weeks. Higher bond yields to replace rate hike? The minutes from the Fed’s last meeting, released on Wednesday, indicated that most of the central bank’s policymakers agreed that one more rate hike would be "appropriate" as inflation continues to trend well above target. That said, the minutes also pointed to uncertainties around the economy as supporting "the case for proceeding carefully in determining the extent of additional policy firming that may be appropriate." The weeks following the September meeting have seen a sharp rise in Treasury yields, and this has been cited by a number of Fed officials as a factor that may allow them to end the rate hike cycle, to the detriment of the U.S. currency. “U.S. yields continued to correct lower on expectations the Fed will let markets do the tightening and refrain from hiking again,” said analysts at ING, in a note. “We suspect, however, that further bond rallies might put a hike back on the table, and limit USD losses.” U.S. CPI due later in session Losses have been limited Thursday after September’s U.S. producer inflation figures came in much stronger than expected, creating a degree of tension ahead of the consumer price reading later in the session. Analysts expect the headline number to rise 3.6% from last year and 0.3% for the month, while core CPI, which excludes food and fuel prices, is expected to rise 4.1% from last year and 0.3% from August. “The argument for a long-lasting dollar decline from these levels is not very compelling unless the drop in rates is endorsed by slower-than-expected inflation. We still think it will take a turn in the U,S, data flow to drive the dollar substantially - and sustainably - lower,” ING added. U.K. economy grew in August GBP/USD rose 0.1% to 1.2323 after the U.K. economy grew 0.2% in August, according to data released earlier Thursday, partially recovering after a sharp 0.6% drop in July. This growth reduces the possibility of a recession starting as early as the July-September period, with the ONS stating that the economy would need to grow by 0.2% in September to avoid a contraction in the third quarter. Euro climbs to two-week high EUR/USD rose 0.2% to 1.0634, with the euro continuing to rise after touching an over two-week high on Wednesday. “Our short-term fair value model suggests that we could see the upward correction in EUR/USD extend to 1.0700, but we think that may be the top of the range unless US CPI surprises on the soft side,” ING said. Elsewhere, AUD/USD rose 0.1% to 0.6419, NZD/USD fell 0.2% to 0.6006 and USD/CNY edged lower to 7.2977. https://www.investing.com/news/forex-news/dollar-edges-lower-ahead-of-key-us-cpu-release-uk-gdp-rose-in-august-3196609

2023-10-12 01:47

Copyrighted Image by: Reuters. Morgan Stanley has identified a potential risk to the sterling's 5%-20% premium due to the persistent current account deficit in the UK, according to their analysis of the country's trade data. The bank's scrutiny comes ahead of the anticipated publication of the Pink Book. According to Morgan Stanley, the sterling could serve as an "equilibrator" in this situation. This suggests that a depreciation of the currency might be a strategy towards achieving economic equilibrium. The bank's analysis indicates a shift in the UK's trade composition. While goods trade remains sluggish, there has been a noticeable escalation in services trade. However, despite these changes, no clear shift away from Europe in trade relations has been observed. In addition to these shifts in trade, Foreign Direct Investment (FDI) data suggests a slowdown in foreign investment into the UK. The combination of these factors may contribute to potential pressure on the sterling. https://www.investing.com/news/forex-news/sterling-may-lose-premium-amid-uks-shifting-trade-says-morgan-stanley-93CH-3196569

2023-10-12 00:50

Copyrighted Image by: Reuters. Investing.com - Government estimates on production matter, oil bulls are beginning to realize. Oil rallied hard in New York’s morning session on Thursday before US crude closed down for a third day in a row as the government reported a record high production for last week. Brent crude finished just a little higher. Oil prices gained almost $2 per barrel earlier in the day as traders threw caution to the winds, backing a market that dropped sharply over two prior days, after Monday’s 4% rally on the heightened fighting in the Middle East — which many mistakenly thought would impact oil exports from the region. All that bull fervor in oil evaporated about an hour after the US Energy (NASDAQ:USEG) Information Administration, or EIA, came out with its Weekly Petroleum Status Report. In that, the agency said US crude inventory balance climbed rose by 10.176 million barrels during the week to Oct. 6, the most since a weekly rise of 16.283M in mid-February. In the prior week to Sept. 29, crude inventories saw a draw of 2.224M barrels. Industry analysts tracked by Investing.com had predicted that decline to continue last week, forecasting a draw of 1.4M barrels for the week to Oct. 6 Crude exports up 300,000 barrels per day in just a week But more riveting than that crude inventory spike reported by the EIA was its estimate for crude production last week. The agency gave that as 13.2M barrels per day — up 300,000 from the prior week. It was the highest ever government estimate on crude production, which prior to this had not exceeded the 13.1M peak reached just before the March 2020 outbreak of the coronavirus pandemic that decimated crude demand. The EIA has been estimating higher crude production for the United States in recent months, citing higher efficiency in output from US shale oil basins despite a sheer cutback in the number of oil rigs actively deployed by drillers. “It’s staggering how far US oil production has come in just a few months this year to reach this record high cited by the EIA,” said John Kilduff, partner at New York energy hedge fund Again Capital. As for crude stockpiles, they ballooned last week as exports, often a juggernaut in the weekly EIA report, fell almost 2 million barrels to reach 3.067M per day versus the 4.956M per day level during the week to Sept. 29. Crude exports hit a record high just shy of 4 million barrels per day in the first half of the year, the EIA said in a separate report on Wednesday. Processing of crude oil into fuel and other products also dropped last week, by almost 2%, to 85.7% as refineries went into maintenance. “It’s the combination of lower exports and lower refinery runs that led to this humongous build in crude stockpiles,” observed Kilduff. Crude exports tumble, in one-two punch for market The one-two punch in record crude production and tumbling exports sent US oil prices back into the negative by the close. New York-traded US West Texas Intermediate, or WTI, crude for delivery in November settled down 58 cents, or 0.7%, at $83.42 per barrel, after a session high of $85.20 earlier. WTI’s intraday low of $82.78 from earlier in the day appeared to close in on its five-week bottom of $81.50 struck on Friday amid a selloff triggered by concerns about global growth and ramping inflation. London-traded Brent crude for the most-active December contract settled up just 18 cents, or 0.2%, at $86 — sharply off the session peak of $88.26. Its intraday low of $85.19, meanwhile, put it closer towards the five-week bottom of $83.44 it registered on Friday. The EIA inventory report wasn’t entirely bearish for oil. While crude stocks rose, inventories of gasoline fell last week after the biggest build in nearly two years the week prior. Distillate stockpiles extended their drop too. Gasoline stockpiles fell by 1.313 million barrels last week versus a forecast drop of 1.0M and the prior week’s build of 6.481M, the EIA said. Gasoline is the No. 1 US fuel product. Distillates inventories also fell by 1.837M last week, more than the forecast 1.0M and adding to the previous drop of 1.269M. Distillates are refined into heating oil, diesel for trucks, buses, trains and ships and fuel for jets. These aside, the EIA reported a 0.319M barrel drop in storage levels at the Cushing, Oklahoma delivery point for US crude, versus the previous week’s rise of 0.132M. That prior week’s build was the first in months for Cushing. Until that week, there had been fears that Cushng stockpiles may drop to such critically low levels that would complicate any more withdrawals from the storage hub. https://www.investing.com/news/commodities-news/oil-down-3rd-day-as-industry-data-suggests-epic-us-crude-build-3196537

2023-10-11 17:09

Copyrighted Image by: Reuters. Investing.com - US crude oil stocks possibly rose by nearly 13 million barrels last week in what could be the highest build since February, petroleum trade group API reported Tuesday. A huge build was also seen in gasoline inventories for a second week in a row, the weekly inventory report from the American Petroleum Institute showed. The U.S. crude inventory balance rose by 12.94M barrels during the week ended Oct. 6, according to the API, after a decline of 4.21M in the prior week to Sept. 29. Stockpiles of gasoline — the No. 1 US fuel product — rose by 3.645M, adding to the previous week’s gain of 3.946M, API said. But inventories of distillates — a feedstock for diesel and heating fuel — fell by 3.535M compared with the prior week’s build of 0.349M. The API also noted a 0.547M barrel drop in storage levels at the Cushing, Oklahoma delivery point for US crude, versus the previous week’s rise of 0.705M. That prior week build was the first in months at Cushing. The API data serves as a precursor to official inventory data on the same due from the US Energy (NASDAQ:USEG) Information Administration, or EIA, on Thursday. For last week, analysts tracked by Investing.com expect the EIA to report a crude stockpile drop of 0.37 million barrels, versus the 2.224-million barrel reduction reported during the week to Sept. 29. On the gasoline inventory front, the consensus is for a draw of 1.5M barrels over the 6.481M-barrel jump in the previous week. Automotive fuel gasoline is the No. 1 U.S. fuel product. With distillate stockpiles, the expectation is for a drop of 1.5M barrels versus the prior week’s drop of 1.269M. Distillates are refined into heating oil, diesel for trucks, buses, trains and ships and fuel for jets. https://www.investing.com/news/commodities-news/us-crude-stocks-up-a-whopping-13m-barrels-last-week-gasoline-rises-39m--api-3196469

2023-10-11 16:43

Copyrighted Image by: Reuters. Investing.com - Oil prices might not be getting the risk premium many thought from the Middle East’s latest conflagtration but gold seems to be acing it, back in its role as a safe haven of choice — especially after the dollar’s crumble this week. Gold’s most-active futures contract on New York’s Comex, December, settled up $12, or 1%, at $1,887.30 an ounce after a session high of $1,890.85. That left the benchmark gold futures contract less than $10 from returning to the psychologically-bullish $1,900 level. Comex gold last traded in the $1,900s on Sept. 27. The spot price of gold, more closely watched by some traders than futures, was at $1,874.33, up $13.81, or 0.7%, on the day. The session peak was $1,858.70. Gold rose as the US Dollar Index backed further from last week’s 11-month peaks and bond yields, benchmarked to the U.S. 10-year Treasury note, retreated from the highest levels since 2007. “Falling global bond yields continue to fuel gold’s price rally,” said Ed Moya, analyst at online trading platform OANDA. “Gold is seeing inflows on both uncertainty over how much market turmoil will stem from the Israel-Hamas war and as the Fed tries to cool the economy.” Moya noted that gold had recovered roughly 40% of its losses over the past month. “Bullish momentum might remain in place until price action approaches the $1,896 level. If Wall Street becomes convinced that rates have peaked and the chances of more tightening in 2024 are unlikely, gold could rally back above the $1,920 level.” https://www.investing.com/news/commodities-news/gold-hits-2week-high-within-striking-range-of-1900-as-dollar-slides-3196451

2023-10-11 13:27

Copyrighted Image by: Reuters. Analysts and traders anticipate a rise in U.S. commercial crude oil inventories by an average of 900,000 barrels for the week ending Oct. 6, according to a recent survey conducted by the Wall Street Journal. The Department of Energy's Energy Information Administration (EIA) is set to release this data on Thursday, a delay attributed to the Columbus Day holiday. The survey also revealed a divergence in stockpile range predictions among analysts. Of those surveyed, three forecasted a decrease in inventories while six predicted an increase. The estimates ranged from a decline of 1.7 million barrels to an increase of up to 3 million barrels. In addition to crude oil, the survey provided estimates for gasoline and distillate stocks. Gasoline inventories are expected to see a boost of approximately 400,000 barrels, with individual estimates oscillating between a decrease of 2 million barrels and an increase of 3.1 million barrels. Distillate stocks, mainly comprised of diesel fuel, are expected to decrease by about 300,000 barrels. Furthermore, the refinery use percentage for the same week is projected to have dipped by 0.3 points from the preceding week. https://www.investing.com/news/commodities-news/us-crude-oil-inventories-projected-to-rise-by-900000-barrels-for-week-ending-oct-6-93CH-3196334