Forex - Yen slightly weaker in Asia after FOMC minutes, focus on China

August 20 2015 
Forex - Yen slightly weaker in Asia after FOMC minutes, focus on China
Category: Forex

The yen was slightly weaker in early Asia on Thursday as investors noted little data on the calendar but with markets still focusing on the yuan, the Shanghai Composite Index, and the remnants of last night's U.S. CPI and FOMC Minutes.USD/JPY changed hands at 123.92, up 0/09%, while AUD/USD traded at 0.7349, up 0.01%.The latest Federal Reserve meeting highlighted concern over the state of the global economy, driving markets to question the likelihood that the Fed will raise rates next month.The minutes showed policymakers continued to express broad concerns about lagging inflation and the weak world economy even as the U.S. job market improved further. Market expectations for a Fed hike in September fell from one in two to roughly one in three after the minutes were published."It looks like based on commodity prices, China, wages not really picking up, that [Fed officials] are not getting any closer to meeting their inflation target and seems like they're probably not going to be willing to go in September" with a rate hike, said Don Ellenberger, head of multi-sector strategies at Federated Investors in Pittsburgh.A delay in the start of the tightening cycle is seen as supportive of equities. However, concern about the strength of the global economy.The US dollar index, which tracks the greenback against a basket of six major rivals, rose 0.03% to 96.45.Overnight, before the Fed minutes, the dollar edged lower against a basket of other currencies on Wednesday after data showing that U.S. inflation rose at a slower than expected rate last month, as investors awaited the minutes of the Federal Reserve’s latest meeting.The Labor Department reported that the consumer price index ticked up just 0.1% in July, below forecasts for a 0.2% gain.Underlying inflation, which excludes food and energy costs, also rose 0.1%, compared to expectations for a 0.2% increase.

NYMEX crude down in Asia as U.S. stocks build, China demand weigh

August 20 2015 
NYMEX crude down in Asia as U.S. stocks build, China demand weigh
Category: Commodities

Crude oil prices dropped sharply in Asia on Thursday as oversupply in the U.S. and global markets pushed tprices down below $41 a barrel and investors sounded increasingly worried about weak China demand.On the New York Mercantile Exchange, WTI crude for October delivery traded down 0.88% to $40.91 a barrel.The latest Federal Reserve meeting highlighted concern over the state of the global economy, driving markets to question the likelihood that the Fed will raise rates next month.The minutes showed policymakers continued to express broad concerns about lagging inflation and the weak world economy even as the U.S. job market improved further. Market expectations for a Fed hike in September fell from one in two to roughly one in three after the minutes were published."It looks like based on commodity prices, China, wages not really picking up, that [Fed officials] are not getting any closer to meeting their inflation target and seems like they're probably not going to be willing to go in September" with a rate hike, said Don Ellenberger, head of multi-sector strategies at Federated Investors in Pittsburgh.A delay in the start of the tightening cycle is seen as supportive of equities. However, concern about the strength of the global economy.Overnight, U.S. crude futures plunged to fresh six-and-a-half year lows before paring some losses in the afternoon session, following the strongest build in U.S. crude inventories in four months.On the Intercontinental Exchange (ICE), Brent crude for October delivery wavered between $46.83 and $49.10 a barrel, before closing at 47.10, down 1.71 or 3.50% on the day. The spread between the international and U.S. benchmarks of crude, meanwhile, stood at 5.87, above Tuesday's level of 5.72 at the close.On Wednesday morning, the U.S. Energy Information (EIA) said in its Weekly Petroleum Status Report that U.S. crude stockpiles increased by 2.6 million for the week ending on August 14, marking its highest weekly build since April. At 456.2 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years. Total motor gasoline inventories decreased by 2.7 million barrels last week, and are in the middle of the average range, the EIA said in a report. At the Cushing Oil Hub in Oklahoma, the main delivery point for NYMEX crude oil, inventories increased by 300,000 barrels for the week.A week earlier, U.S. crude stockpiles decreased by 1.7 million, in line with analysts' expectations for a 1.6 million draw. The draw was preceded by a 4.4 million decline for the week ending July 31, as crude production across the U.S. continues to level.In spite of last week's inventory build, output continues to decline as U.S. shale production levels off. During the week, U.S. crude production fell by 47,000 barrels to 9.348 million barrels per day, around its lowest level since early-May. U.S. crude output still remains near its highest level in more than 40 years. The most fertile U.S. shale fields, however, project that output will decline in September for a fifth consecutive month.In this week's report the EIA said WTI crude fell to $42.45 per barrel at the end of last week, $54.85 below its price during the same week in 2014. Crude futures are down more than 50% since OPEC triggered a prolonged battle for global market share last November with a strategic decision to keep its production ceiling above 30 million barrels per day.

Shares in Asia mostly weaker post-Fed minutes, Shanghai gains

August 20 2015 
Shares in Asia mostly weaker post-Fed minutes, Shanghai gains
Category: Stock Market

Asian shares mostly fell on Thursday with signs that increasingly downbeat assessments of China's economy have hit regional and global sentiment.The Nikkei 225 was down 0.05%, while the S&P/ASX 200 eased 1.32% and the Hang Seng index eased 1.23%. Bucking the trend, the Shanghai Composite rose 1.08% before the break - but has shown sharp volatility this week on the downside.The latest Federal Reserve meeting highlighted concern over the state of the global economy, driving markets to question the likelihood that the Fed will raise rates next month.The minutes showed policymakers continued to express broad concerns about lagging inflation and the weak world economy even as the U.S. job market improved further. Market expectations for a Fed hike in September fell from one in two to roughly one in three after the minutes were published."It looks like based on commodity prices, China, wages not really picking up, that [Fed officials] are not getting any closer to meeting their inflation target and seems like they're probably not going to be willing to go in September" with a rate hike, said Don Ellenberger, head of multi-sector strategies at Federated Investors in Pittsburgh.A delay in the start of the tightening cycle is seen as supportive of equities. However, concern about the strength of the global economy.Overnight, U.S. stocks experienced a wild session of unpredictable, volatile trading, paring significant losses after the Federal Reserve provided no clear indications on an imminent interest rate hike midway through Wednesday afternoon, before again falling precipitously near the close.After completing the roller coaster day of trading came to a halt, the Dow Jones Industrial Average and the NASDAQ both fell sharply moving to nearly its lowest level in a month. The S&P 500 Composite index also suffered significant losses, as a massive sell-off in crude stocks and continued instability in China weighed on all three major indices. The Dow fell 162.61 or 0.93% to 17,348.73, while the NASDAQ dropped 40.30 or 0.80% to close Wednesday's session at 5,019.05.The S&P 500, meanwhile, lost 17.31 or 0.83% to 2,079.61, as eight of 10 sectors closed in the red. Stocks in the Energy, Basic Materials and Industrials sectors lagged, each falling by more than 0.95% on the day.When the Federal Open Market Committee last met three weeks ago, the minutes from its July meeting showed that the Fed determined that conditions for a hike in short-term interest rates had not yet been achieved. The FOMC appeared to be particularly vague when it came to their forecasts on inflationary growth. The Fed, according to the minutes, said by some objectives the inflation data was "not progressing" toward its targeted goal. Other members, however, said that inflation conditions for a rate hike would be met or could be "met shortly."Relatively muted gains in the Consumer Price Index for July could appease the dovish viewpoints on the Fed for a delayed rate hike beyond September. On Wednesday morning, the Bureau of Labor Statistics said its CPI for July ticked up 0.1%, amid record declines in airfare prices. The Core CPI, which strips out food and energy prices, rose by 1.8% on a year-over-year basis after remaining unchanged from June. The Fed has indicated that it could start to raise rates when it is "reasonably confident" that long-term inflation is moving toward its targeted goal of 2%.