Wednesday 27 January 2016

U.K. Nationwide HPI 0.3% vs. 0.6% forecast


Category: Economic Indicators


The U.K.’s Nationwide house price index rose less-than-expected last month, data showed on Wednesday.In a report, , Nationwide Building Society said that said its index of U.K. house prices rose to 0.3%, from 0.8% in the preceding month.Analysts had expected the Nationwide HPI to rise 0.6% l

Forex - AUD/USD rises to 2-week highs on Australian inflation data


Category: Forex


The Australian dollar rose to two-week highs against its U.S. counterpart on Wednesday, after the release of upbeat inflation data from Australia and as sentiment on the greenback remained vulnerable ahead of the Federal Reserve’s policy statement due later in the day.AUD/USD hit 0.7051 during late Asian trade, the pair’s highest since January 8; the pair subsequently consolidated at 0.7028, rising 0.31%.The pair was likely to find support at 0.6916, Tuesday’s low and resistance at 0.7075, the high of January 8.The Australian Bureau of Statistics reported on Wednesday that the consumer price index rose 0.4% in the fourth quarter, beating expectations for an uptick of 0.3%, after a 0.5% increase in the three months to September.Year-on-year, consumer prices rose 1.7% in the last quarter, exceeding expectations for a 1.6% gain.The Fed is expected to keep interest rate on hold at the conclusion of its two-day policy meeting later Wednesday after raising interest rates for the first time in almost a decade in December.Investors were looking to the Fed policy statement for any indication that the bank is considering slowing the path of interest rate increases this year after recent global financial market turmoil.The Aussie was higher against the euro, with EUR/AUD sliding 0.35% to 1.5460.

WTI oil futures fall back towards $30 ahead of weekly supply report


Category: Commodities


West Texas Intermediate oil futures fell back towards the $30-level in Europe trade on Wednesday, amid speculation weekly supply data due later in the session will show U.S. crude inventories rose at a faster pace than expected last week.The U.S. Energy Information Administration will release its weekly report on oil supplies at 15:30GMT, or 10:30AM ET, amid expectations for a gain of 3.3 million barrels.After markets closed Tuesday, the American Petroleum Institute, an industry group, surprised market participants and said that U.S. oil inventories jumped by 11.4 million barrels in the week ended January 22, compared to expectations for an increase of 3.5 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub for WTI fell by 664,000 barrels, the API said.Crude oil for delivery in March on the New York Mercantile Exchange shed 73 cents, or 2.34%, to $30.71 a barrel by 08:00GMT, or 3:00AM ET.A day earlier, Nymex prices jumped $1.11, or 3.66%, as traders covered short positions amid speculation OPEC and non-OPEC producers may be edging closer to a deal to cut production in an effort to stem the persistent slump in oil prices.U.S. oil futures plunged below $27 last week for the first time since September 2003, as ongoing concerns over a global supply glut and slowing demand dragged down prices. The U.S. benchmark is down nearly 17% this month amid ongoing concerns over a global supply glut.Elsewhere, on the ICE Futures Exchange in London, Brent oil for March delivery retreated 66 cents, or 2.08%, to $31.14 a barrel. The more actively-traded April contract declined 57 cents, or 1.77%, to $32.00.On Tuesday, London-traded Brent prices rallied $1.30, or 4.26%, after Iraq's oil minister said he saw some flexibility for a deal between OPEC and non-OPEC.Futures sank to $27.10 on January 20, a level not seen since October 2003. Brent is down almost 15% since the start of the year as lingering concerns over China’s economic outlook added to the view that a global supply glut may stick around for much longer than anticipated.China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share.Oversupply issue will be exacerbated further as Iran plans to return to the global oil market after western-imposed sanctions were lifted earlier this month. Analysts say the country could quickly ramp up exports by around 500,000 barrels.The surge in Iranian shipments is viewed as bearish for crude, which has fallen approximately 75% from its peak of $115 two summers ago, amid a glut of oversupply on markets worldwide.Most market analysts expect a global glut to worsen in the coming months due to soaring production in North America, Saudi Arabia and Russia.Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at 43 cents, compared to a premium of 35 cents by close of trade Tuesday.

Thursday 21 January 2016

NYMEX crude shrugs off API data and rebounds in Asia

Crude oil prices rebounded after an early slump into Asia on Thursday, shrugging offs an industry group report of a major build in U.S. stocks last week.On the New York Mercantile Exchange, WTI crude for March delivery was quoted at $28.70 a barrel, up 1.22%.The American Petroleum Institute said crude stocks rose by 4.6 million barrels last week, well above a 2.9 million barrel gain seen.Separately, Thursday's government report from the Energy Department could show that U.S. crude stockpiles increased by 3.0 million barrels for the week ending on Jan. 15.The report is being released one day later than usual this week due to Monday's Martin Luther King Day holiday.Overnight, crude futures fell to fresh 12-year lows on Wednesday before paring some of their losses shortly before the close of trading, amid mounting concerns of a widening gulf between global supply and demand levels.Losses in the February contract were even sharper, plummeting as much as 7% to an intraday low of $26.30 on its final day of trading before expiring. U.S. crude rebounded slightly late in the session, as investors covered their short positions from the massive sell-off.On the Intercontinental Exchange (ICE), Brent crude for March delivery wavered between $27.11 and $28.84 a barrel, before closing at $27.93, down 0.83 or 2.86% on the day.Meanwhile, the spread between the U.S. domestic and international benchmarks stood at 0.44, below Tuesday's level of 0.78 at the close of trading.Investors continued to digest bearish comments from the International Energy Agency (IEA) a day earlier when the Paris-based organization warned that oil prices worldwide "could drown in oversupply" if current conditions persist. In its monthly oil report released on Tuesday, the IEA said global markets could face an estimated supply excess of 1.5 million barrels per day if demand continues to limp behind at its current pace. Barring unforeseen changes, global supply is expected to outstrip demand by more than 1 million bpd for the third straight year.

Crude prices remain near decade lows in the wake of Saturday's Implementation Day announcement that will enable Iran to ramp up exports by approximately 500,000 bpd over the next several weeks. The lifting of multi-year sanctions against the Persian Gulf state is expected to push crude prices down even lower, as Iran plans to increase exports to as much as 3.4 million bpd once its return to global markets is completed.Energy traders have closely observed the growing rift between Iran and Saudi Arabia since the oil powers severed diplomatic ties following the execution of a Shiite cleric on Jan. 2. On Wednesday, the Saudi Arabian Monetary Agency (SAMA) warned commercial banks against betting on the Riyal's depreciation, after devaluations of the Saudi currency reached their highest level in nearly two decades. Saudi Arabia is forecasting a budget deficit of $87 billion this year, amid plummeting oil prices.

China shares, yuan weaker at the break

The yuan was barely changed Thursday despite a weaker fixing by the People's Bank of China, trading around 6.5794 against the U.S. dollar compared with Wednesday's official close of 6.5796. The PBOC set the yuan fixing at 6.5585 compared with Wednesday's 6.5578. Shares fell in line with other stock markets. The Shanghai Composite Index was last down 0.36% to 2,966.05 after earlier falling 1.6% to 2,927.94. Hong Kong's Hang Seng Index was last up 1.13% to 19,100.26.

Australia stocks higher at close of trade; S&P/ASX 200 up 0.46%

Australia stocks were higher after the close on Thursday, as gains in the Telecoms Services, Consumer Staples and IT sectors led shares higher.At the close in Australia, the S&P/ASX 200 rose 0.46%.The best performers of the session on the S&P/ASX 200 were Origin Energy Ltd (AX:ORG), which rose 6.65% or 0.230 points to trade at 3.690 at the close. Meanwhile, OZ Minerals Ltd (AX:OZL) added 6.57% or 0.230 points to end at 3.730 and JB Hi-Fi Ltd (AX:JBH) was up 5.48% or 1.180 points to 22.710 in late trade.The worst performers of the session were AWE Ltd (AX:AWE), which fell 7.46% or 0.025 points to trade at 0.310 at the close. Challenger Ltd (AX:CGF) declined 5.16% or 0.380 points to end at 6.990 and Slater&Gordon Ltd (AX:SGH) was down 4.42% or 0.025 points to 0.540.Falling stocks outnumbered advancing ones on the Australia Stock Exchange by 501 to 497 and 137 ended unchanged.Shares in AWE Ltd (AX:AWE) fell to 5-year lows; falling 7.46% or 0.025 to 0.310. Shares in JB Hi-Fi Ltd (AX:JBH) rose to 52-week highs; up 5.48% or 1.180 to 22.710. Shares in Slater&Gordon Ltd (AX:SGH) fell to all time lows; falling 4.42% or 0.025 to 0.540.The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was down 0.57% to 24.062.Gold for February delivery was down 0.32% or 3.50 to $1102.70 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in March fell 0.72% or 0.20 to hit $28.14 a barrel, while the March Brent oil contract fell 0.29% or 0.08 to trade at $27.75 a barrel.AUD/USD was down 0.12% to 0.6899, while AUD/JPY fell 0.31% to 80.53.The US Dollar Index was down 0.07% at 99.09.

Monday 18 January 2016

Chinese GDP 6.8% vs. 6.8% forecast

China’s gross domestic product fell last month, official data showed on Tuesday.In a report, National Bureau of Statistics of China said that Chinese GDP fell to an annual rate of 6.8%, from 6.9% in the preceding month.Analysts had expected Chinese GDP to fall to 6.8% l

Forex- Aussie weaker as China FY GDP meets 6.8% expectation

The Aussie fell and the yen traded weaker after China on Tuesday said fourth quarter GDP came in along expected line, though retail sales and industrial output came in a bit below forecasts.USD/JPY changed hands at 117.43, up 0.10%, while AUD/USD traded at 0.6851, down 0.19%.In China fourth quarter GDP rose 1.6% quarter-on-quarter, a tad lower than the 1.7% gain seen, while year-on-year GDP came in at the expected 6.8% rate.As well, the Middle Kingdom reported industrial production rose 5.9%, a tad lower than the 6.0% seen and retail sales gained 11.1%, a bit lower than up 11.3% expected for December. Then fixed asset investment rose 10%, a tad off the 10.2% gain seen.Earlier, the NZIER Business Confidence index rose to 15% from minus-14%.The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.01% at 99.17.On Tuesday, the People's Bank of China injected CNY75 billion via 28-day reverse repos at open-market operations in line with practice ahead of the Chinese New Year to meet liquidity demand.The PBOC last used the 28-day reverse repo in February 2015 - also before the Chinese New Year.The weeklong celebration is probably the most important holiday in China and sees hundreds of millions traveling for family reunions as well as an increase in demand for cash.Overnight, the dollar was still slightly higher against the other major currencies in quiet trade on Monday, as the greenback found support after China’s central bank unveiled fresh measures to curb speculation and also guided the yuan higher.

Trading volumes were thin on Monday with U.S. markets closed for the Martin Luther King Day holiday.The People's Bank of China said Monday it is to start implementing a reserve requirement ratio on offshore banks' domestic deposits, a move intended to deter offshore speculators betting that the currency will continue to fall. The PBOC also set a firmer mid-point rate for the yuan than on Friday.China's currency has fallen around 5% against the dollar since August, sparking fears that the slowdown in the world’s second-largest economy is deeper than had been feared.Markets were jittery, as oil prices fell below $28 per barrel on Monday, the lowest level in 12 years.The renewed fall in oil prices came as Iranian exports were set to resume after Western sanctions were lifted, fueling fears over increased supplies amid a global supply glut and slowing demand.The oil rout continued to weigh on the commodity-related Canadian dollar, amid mounting expectations that the Bank of Canada could ease monetary policy further at its upcoming meeting on Wednesday in response to low oil prices.

NYMEX crude down as China industrial output misses mark, FY GDP 6.8%

Crude prices fell in China as industrial production came in a tad weaker than expected, though full-year GDP met its forecast.Crude oil for delivery in March on the New York Mercantile Exchange dropped 0.74% to $30.16 a barrel.In China fourth quarter GDP rose 1.6% quarter-on-quarter, a tad lower than the 1.7% gain seen, while year-on-year GDP came in at the expected 6.8% rate.As well, the Middle Kingdom reported industrial production rose 5.9%, a tad lower than the 6.0% seen and retail sales gained 11.1%, a bit lower than up 11.3% expected for December. Then fixed asset investment rose 10%, a tad off the 10.2% gain seen.Overnight, Brent oil futures turned higher after falling below the $28-level on Monday, as international sanctions against Iran’s nuclear program were lifted over the weekend, opening the door to a wave of new oil and adding to concerns that a global glut will linger. 

Trading was thin because of the Martin Luther King Jr. holiday in the U.S.Analysts say the country could quickly ramp up exports by around 500,000 barrels. The surge in Iranian shipments is viewed as bearish for crude, which has fallen approximately 75% from its peak of $115 two summers ago, amid a glut of oversupply on markets worldwide.Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share.Most market analysts expect a global glut to worsen in the coming months due to soaring production in North America, Saudi Arabia and Russia.Brent oil for March delivery sank to a session low of $27.67 a barrel on the ICE Futures Exchange in London, a level not seen since October 2003.London-traded Brent futures plunged $4.40, or 13.74%, last week, its sixth losing week in the past seven. Brent prices are down almost 25% since the start of the year, as lingering concerns over China’s economic outlook added to the view that a global supply glut may stick around for much longer than anticipated.China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

Wednesday 13 January 2016

Gold prices gain in Asia on safe-haven demand, rebound from overnight


Gold gained in Asia, rebounding from an overnight fall, as investors turned to safe-have assets.On the Comex division of the New York Mercantile Exchange gold for February delivery rose 0.52% to $1,092.40 a troy ounce.Silver for March delivery eased 0.22% to $14.105 a troy ounce.Copper for March delivery gained 0.68% to $1.971 a pound.In Japan, the CGPI (corporate goods price index) is expected to show a fall of 3.5% year-on-year in December. As well, core machinery orders for November year-on-year likely fell 7.9%.In Australia, comes jobs data including employment change with a drop of 12,500 jobs seen, and the unemployment rate expected up to 5.9% from 5.8%.Overnight, gold inched up halting a three-day losing streak, as stronger than expected trade data in China bolstered the value of the precious metal.Gold likely gained support at $1,046.20, the low from December 3 and was met with resistance at $1,162.00, the high from Oct. 29.On Wednesday morning, China's General Administration of Customs reported that its exports fell 1.4% on annual basis in December, considerably less than analysts' forecasts for a drop of 8.0%. Export levels throughout China have received a great deal of attention at the start of the new year after the People's Bank of China (PBOC) opened 2016 by devaluing the yuan by more than 1.5% last week. For the month of December, Chinese exports also strongly outperformed neighbors in Taiwan and South Korea.Chinese imports, meanwhile, plunged by 7.6%, moving lower for the 14th consecutive month. The slide, however, wasn't as precipitous as feared after a drop of nearly 9% in November. 


Analysts expected a monthly decline of 11.5%. As a result, China produced a trade surplus of $60.09 billion above expectations of $53.0 billion last month.Investors await the release of China's fourth-quarter and full-year GDP data next week for further indications on growth levels in the world's second-largest economy. On Tuesday, China's top economic planning agency said it expects that the Chinese economy grew by 7% in 2015, down from 7.3% a year earlier. The figure would represent the slowest pace of economic growth in China in a quarter century.China is the world's largest producer of gold and the second-largest consumer of the precious metal behind India.Elsewhere, Federal Reserve of Boston president Eric Rosengren noted that the rout in Chinese equities in combination with persistently weak oil prices has led to mounting concerns of slowing global growth. The factors, Rosengren added, could compel the Fed to slow its pace of tightening this year. Rosengren's comments provide further ambiguity on whether the U.S. central bank could raise short-term interest rates before the end of the first quarter. Last week, Fed vice chair Stanley Fischer said in an interview with CNBC that economic conditions could be appropriate for the Fed to approve as many as four rate hikes this year.Any upward moves are viewed as bearish for gold, which struggles to compete with high-yield bearing assets in rising rate environments.

Tuesday 12 January 2016

Forex - Sterling hits fresh 5-year lows after weak U.K. data

The pound fell to fresh five-year lows against the dollar on Tuesday after data showing that U.K. industrial and manufacturing production dropped sharply in November, adding to concerns over the uneven economic recovery.GBP/USD hit lows of 1.4484, the weakest level since June 2010, down from around 1.4527 ahead of the data.The Office for National Statistics said industrial production fell 0.7% in November from the previous month, compared with forecasts for a flat reading. It was the biggest drop since January 2013.Manufacturing production fell 0.4% compared with October, well below forecasts for a 0.1% increase.On a year-over-year basis, manufacturing production contracted by 1.2%, its fourth consecutive month of contraction. Economists had forecast a more modest decline of 0.8%.The weak data indicates that businesses in the U.K. are suffering from weaker overseas demand, partly due to a slowdown in China and the impact of the stronger pound.Sterling remained under heavy selling pressure amid concerns that the Bank of England will signal that rates are likely to remain on hold for longer after its policy meeting on Thursday.The pound was lower against the euro, with EUR/GBP rising to 0.39% to 0.7494 from 0.7479 earlier

U.K. manufacturing production falls 0.4% in November

Manufacturing production in the U.K. fell for the second straight month in November, dampening optimism over the countryâs economic outlook, official data showed on Tuesday.In a report, the U.K. Office for National Statistics said that manufacturing production decreased by a seasonally adjusted 0.4% in November, disappointing expectations for a gain of 0.1% and following a decline of 0.4% a month earlier.On an annualized basis, manufacturing production fell at rate of 1.2%, worse than estimates for a decline of 0.8%, after declining at a rate of 0.2% in October.The report also showed that industrial production fell by a seasonally adjusted 0.7%, compared to forecasts for a flat reading and following a gain of 0.1% in the preceding month.GBP/USD sank to 1.4503 from around 1.4528 ahead of the announcement, while EUR/GBP was at 0.7491 from 0.7479 earlier.Meanwhile, European stock markets were broadly higher. Londonâs FTSE 100 rose 0.6%, the EURO STOXX 50 tacked on 0.8%, France's CAC 40 rallied 1.2%, while Germany's DAX advanced 1.7%.

Oil prices drop to $30 as collapse continues

Oil prices fell towards $30 a barrel on Tuesday, as ongoing worries over the health of Chinaâs economy fueled concerns that a global supply glut may stick around for longer than anticipated.On the ICE Futures Exchange in London, Brent oil for March delivery dropped 71 cents, or 2.23%, to trade at $31.17 a barrel as of 08:50 GMT, or 3:50AM ET, after sinking to a session low of $30.77, a level not seen since April 2004.On Monday, London-traded Brent futures tumbled $2.05, or 6.04%. Prices are down almost 17% since the start of the year as a meltdown on Chinaâs stock market and a rapid depreciation of the yuan rattled investor sentiment.Market players are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's oil demand will decline.China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.Elsewhere, crude oil for delivery in February on the New York Mercantile Exchange slumped 78 cents, or 2.47%, to trade at $30.63 a barrel. It earlier fell to $30.42, the lowest level since December 2003.

New York-traded oil futures plunged $1.75, or 5.28%, on Monday. The U.S. benchmark has lost more than 17% since 2016 began.Market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the worldâs largest oil consumer.The American Petroleum Institute will release its inventories report later Tuesday, while Wednesdayâs government report could show crude stockpiles rose by 2.5 million barrels in the week ended January 8.Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at 54 cents, compared to a gap of 47 cents by close of trade on Monday.Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share.Most market analysts expect a global glut to worsen this year due to soaring production in North America, Saudi Arabia and Russia.Oversupply issue will be exacerbated further once Iran returns to the global oil market early next year after western-imposed sanctions are lifted. Analysts say the country could quickly ramp up production by around 500,000 barrels, adding to the glut of oil that has sent prices tumbling.

Sunday 10 January 2016

Forex - Yen gains in early Asia with markets in Tokyo shut

The yen strengthened on Monday in early Asia in a light data day regionally with markets in Tokyo shut.USD/JPY traded at 116.88, down 0.49%, while AUD/USD traded at 0.6929, down 0.25%.Markets in Japan will be closed for a national holiday. The Bank of Canada is to release its quarterly business outlook survey.In the week ahead, investors will continue to focus on economic reports out of China, with Wednesday’s trade data in the spotlight.The U.S. is to release data on retail sales, producer prices and consumer sentiment later in the week, while Thursday’s monetary policy meeting minutes from the Bank of England will also be in focus.The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was quoted down 0.27% to 98.19.Last week, the dollar pared back gains against the other major currencies on Friday as concerns over China continued to dominate market sentiment in spite of a robust U.S. jobs report for December.

The Labor Department reported that the U.S. economy added 292,000 jobs last month, after increasing an upwardly revised 252,000 in November. Economists had forecast payrolls to rise by 200,000.The unemployment rate held steady at a seven-and-a-half year low of 5% in December.The report bolstered expectations that the Federal Reserve could raise interest rates at a faster pace this year. Higher U.S. interest rates would make the dollar more attractive to yield-seeking investors.But concerns over slowing growth in China, which have been exacerbated by the swift rate of the Chinese yuan’s decline, saw the greenback trim back gains in late trade. The People’s Bank of China guided the yuan lower against the dollar in the first four trading sessions of 2016, roiling financial markets.While investors had expected the central bank to allow the yuan to fall further after last year’s 4.5% depreciation, the rapid pace of the devaluation has fueled fears that the world’s number two economy is growing even more slowly than expected.

Gold prices gain in Asia on economic, political turmoil, copper down

Gold gained in Asia on Monday on continued economic turmoil expected in China and a backdrop of tense Middle Eastern disputes between Iran and Saudi Arabia.Markets in Japan will be closed for a national holiday.Gold for February delivery on the Comex division of the New York Mercantile Exchange rose 0.80% to $1,106.70 a troy ounce.Also on the Comex, silver futures for March delivery gained 0.55% to $14.005 a troy ounce.Elsewhere in metals trading, copper for March delivery fell 0.21% to $2.010 a pound.In the week ahead, investors will continue to focus on economic reports out of China, with Wednesday’s trade data in the spotlight.The U.S. is to release data on retail sales, producer prices and consumer sentiment later in the week, while Thursday’s monetary policy meeting minutes from the Bank of England will also be in focus.Last week, gold prices retreated from a nine-week high on Friday, as the U.S. dollar strengthened after data showed the U.S. economy created much more jobs than expected in December.The Labor Department reported that the U.S. economy added 292,000 jobs last month, after increasing an upwardly revised 252,000 in November. Economists had forecast payrolls to rise by 200,000. 

The unemployment rate held steady at a seven-and-a-half year low of 5% in December.The report bolstered expectations that the Federal Reserve could raise interest rates at a faster pace this year. Rising interest rates historically have been bad news for gold, which can't compete with the higher interest rates offered by other assets.Comex copper prices plunged 5.4 cents, or 5.13%, last week as a meltdown on China’s stock market and a rapid depreciation of the yuan rattled investor sentiment.While investors had expected the People's Bank of China to allow the yuan to fall further after last year’s 4.5% depreciation, the rapid pace of the devaluation has fueled fears that the world’s number two economy is growing even more slowly than expected.The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption. In the week ahead, investors will continue to focus on economic reports out of China, with Wednesday’s trade data in the spotlight.

Shares in Asia dip with focus on China economy, Middle East tension

Asian shares held weaker on Monday with Tokyo markets shut for a holiday and a light regional data day ahead.The S&P/ASX 200 fell 1.95%, while the Shanghai Composite eased 0.93%.Investors are watching events in the Middle East closely for signs of any escalation in tension between Saudi Arabia and Iran - and keeping a close eye on China for poliycmaker statements on the economy.In the week ahead, investors will continue to focus on economic reports out of China, with Wednesday’s trade data in the spotlight.The U.S. is to release data on retail sales, producer prices and consumer sentiment later in the week, while Thursday’s monetary policy meeting minutes from the Bank of England will also be in focus.Last week, U.S. stocks were lower after the close on Friday, as losses in the Financials, Healthcare and Oil & Gas sectors led shares lower.

At the close in NYSE, the Dow Jones Industrial Average declined 1.02% to hit a new 3-months low, while the S&P 500 index lost 1.08%, and the NASDAQ Composite index fell 0.98%.Of note, U.S. economy created much more jobs than expected in December.The Labor Department reported that the U.S. economy added 292,000 jobs last month, after increasing an upwardly revised 252,000 in November. Economists had forecast payrolls to rise by 200,000. The unemployment rate held steady at a seven-and-a-half year low of 5% in December.The report bolstered expectations that the Federal Reserve could raise interest rates at a faster pace this year.However, a meltdown on China’s stock market and a rapid depreciation of the yuan rattled investor sentiment.While investors had expected the People's Bank of China to allow the yuan to fall further after last year’s 4.5% depreciation, the rapid pace of the devaluation has fueled fears that the world’s number two economy is growing even more slowly than expected.

Tuesday 5 January 2016

Gold prices dip in Asia with China economy, Middle East tension eyed

Gold prices inched lower in Asia on Wednesday in cautious trade as investors look for direction on China's econmic policies and events in the Middle East.On the Comex division of the New York Mercantile Exchange, gold for February delivery fell 0.07% to $1,077.50 a troy ounce.Silver futures for March delivery dropped 0.04% to $13.975 a troy ounce, while copper futures for March delivery eased 0.10% to $2.093 a pound.Overnight, gold ticked up in spite of a broadly stronger dollar on Tuesday, as widespread geopolitical concerns in the Middle East and fears of slowing global economic growth remained in focus.It followed Monday's surge when the precious metal jumped by more than $15 an ounce, as investors digested news that Saudi Arabia cut diplomatic ties with Iran after protesters stormed the Saudi embassy in Tehran over the weekend in response to the execution of a prominent Shiite cleric. Gold has also risen by nearly 3% in value since a major sell-off last month in the aftermath of the Federal Reserve's first interest rate hike in nearly a decade.On Tuesday morning, the People's Bank of China (PBOC) injected the most cash into the nation's open-market operations since September, one day after weak manufacturing data for December sent Chinese equities crashing, sparking fresh concerns of a further slowdown in the world's second-largest economy. In its latest effort to bolster its flagging economy, the PBOC offered 130 billion yuan ($19.9 billion) of seven-day reverse repo's on Tuesday at an interest rate of 2.25%. The stimulus measures are aimed at lowering borrowing costs in order to jumpstart activity in an economy that is projected to report its slowest annual growth rate in more than two decades.The cash injections also fueled speculation that the PBOC could cut interest rates before the start of the Chinese New Year on February 4. Last year, the Chinese central bank slashed interest rates on six different occasions in its most aggressive easing initiative since the height of the Financial Crisis.China is the world's largest producer of gold and the second-largest consumer of the precious metal behind India. China is also the world's largest consumer of copper, accounting for more than 40% of the world's total consumption.Metal traders continued to monitor activities in the Persian Gulf in the wake of the execution of Shiite cleric Sheikh Nimr al-Nimr and 46 others by Saudi Arabia over the weekend. 

U.S. Total Vehicle Sales 17.34M vs. 18.10M forecast

U.S. total vehicle sales rose less-than-expected last month, official data showed on Tuesday.In a report, Autodata Corp. said that U.S. Total Vehicle Sales rose to a seasonally adjusted 17.34M, from 18.19M in the preceding month.Analysts had expected U.S. Total Vehicle Sales to rise 18.10M l

Reports say North Korea likely conducted a nuclear test

North Korea likely conducted a nuclear test, the Japanese government said on Wednesday, citing seismic data."Judging from the past cases, there is a possibility that there was a nuclear test," Chief Cabinet Spokesman Yoshihide Suga said Wednesday.Japan's Meteorological Agency said Wednesday's jolt is similar to the ones triggered by underground nuclear tests conducted by Pyongyang in the past, according to public broadcaster NHK.South Korea's Yonhap News Agency, as well as Chinese sources, also suggested North Korea could have conducted a nuclear explosion Wednesday morning.

Monday 4 January 2016

Gold spikes 1% as Saudi Arabia-Iran tensions flare up

Gold prices spiked higher on Monday, amid mounting geopolitical tensions in the Middle East after Saudi Arabia cut diplomatic ties with Iran over the weekend.The move followed a weekend storming of the Saudi embassy in Tehran in response to the kingdom's execution of a prominent Shiite cleric.Gold for February delivery on the Comex division of the New York Mercantile Exchange tacked on $11.50, or 1.08%, to trade at $1,071.70 a troy ounce during European morning hours. It earlier rose by as much as 1.2%.Also on the Comex, silver futures for March delivery inched up 16.2 cents, or 1.17%, to trade at $13.96 a troy ounce.Meanwhile, investors were looking ahead to the ISM report on U.S. manufacturing activity later in the day for further clues on the strength of the economy and the timing of future rate hikes.

The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.5% at 98.28, as risk-off trade boosted demand for the safe-haven yen.Gold lost approximately 11% in 2015, the third yearly loss in a row, as speculation over the timing of a Fed rate hike dominated market sentiment for most of the year. Rising interest rates historically have been bad news for gold, which can't compete with the higher interest rates offered by other assets.With the first U.S. rate hike since 2006 out of the way, investors are now focusing on the pace of future rate increases. The Fed, from its forecasts, is anticipating four rate hikes next year.Elsewhere in metals trading, copper tumbled on Monday, as the release of weak Chinese manufacturing activity data weighed as investors returned to the markets after the long New Year weekend.Copper traders view Chinese factory activity as an indicator of the nation's copper demand, as the red metal is widely used by the sector.The Caixin manufacturing purchasing managers’ index for December released earlier slipped to 48.2 from 48.6 in November, contracting for a tenth month and coming in below expectations for 49.0.Meanwhile, the official manufacturing purchasing managers' index published on Friday inched up to 49.7 last month from November's three-year low of 49.6. A reading below 50.0 indicates industry contraction.The downbeat data underlined worries the world's second largest economy may still be losing momentum despite a raft of stimulus measures in recent months.The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.

U.K. manufacturing PMI falls to 51.9 in December

Manufacturing activity in the U.K. expanded at the slowest rate in three months in December, dampening optimism over the country’s economic outlook and dimming the case for higher interest rates, industry data showed on Monday.In a report, market research group Markit said that its U.K. manufacturing PMI fell to a seasonally adjusted 51.9 last month from a revised reading of 52.5 in November. Analysts had expected the index to inch up to 52.7 in December.On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.The consumer goods sector remained the prime driver of production and new order growth, despite seeing its rates of expansion ease over the month. Similar decelerations were also seen at intermediate and investment goods producers.Commenting on the report, Rob Dobson, senior economist at survey compiler Markit, said, “This suggests that industry will make, at best, only a marginal positive contribution to broader economic growth in the final quarter of the year."GBP/USD was trading at 1.4765 from around 1.4779 ahead of the release of the data, while EUR/GBP was at 0.7394 from 0.7387 earlier.Meanwhile, European stock markets were down sharply. London’s FTSE 100 dropped 1.75%, the EURO STOXX 50 declined 2.95%, France's CAC 40 slumped 2.6%, while Germany's DAX sank 3.2%.

U.K. Mortgage Approvals 70.41K vs. 69.65K forecast

U.K. mortgage approvals rose more-than-expected last month, official data showed on Monday.In a report, Bank of England said that U.K. Mortgage Approvals rose to a seasonally adjusted 70.41K, from 69.87K in the preceding month whose figure was revised up from 69.63K.Analysts had expected U.K. Mortgage Approvals to rise 69.65K l