Oil futures fell due to short expectations
Crude oil prices fell in Asia on Tuesday after the release on construction industry US stockpiles and the profit-taking after a sharp rise overnight.
The American Petroleum Institute reported that US crude supplies rose a surprise 2.2 million barrels for the week ended July 8, according to sources. Energy Information Administration report on stockpiles of crude and refined products to be released Wednesday.
On the New York Mercantile Exchange, crude oil WTI for August delivery decreased 0.73% to $ 46.46 per barrel.
Overnight, crude oil futures surged more than 4%, bouncing off near the lows of two months, after OPEC predicted in 2017 the first forecast that global oil demand will exceed production levels next year crude, helping sentiment ease investors’ long-term implications of a supply glut great in energy markets around the world.
On the Intercontinental Exchange (ICE), Brent crude for September delivery wavered between $ 46.03 and $ 48.47 per barrel, before settling at $ 48.40, up 2.15 or 4.65% on the day.
In monthly Oil Market Report for June, released on Tuesday, said OPEC crude oil production average of 32.86 million barrels per day in June, an increase of 264,000 barrels per day from the previous month. Although output increased between a number of producers such as Nigeria, Iran, Saudi Arabia, Libya and the UAE, production dipped deep in Venezuela and Iraq. oil production in Saudi Arabia, the largest exporter in the world, up 66,500 barrels a day to 10.308 million barrels per day. Ratings are also taken into account in Gabon’s return to stronger oil cartel, add an additional 214,000 barrels per day of the total in June.
Specifically, OPEC anticipates that global demand will increase by 1.2 million barrels per day next year to 95.3 million barrels per day, outpacing forecasts of supply current. OPEC also predicted that world supply will fall sharply by 1.4 million barrels per day to 94.3 million barrels per day over a period of three months running, put significant pressure upward. Moreover, the cartel anticipates that non-OPEC supply will inch down from the current 2016 forecast of 56.0 million barrels per day to 55.9 million barrels per day by the end of next year.
OPEC also caused a 40% increase in the average price of the Reference Basket during the second quarter for extensive production slowdowns in Nigeria and Canada, as well as market-determined recovery in the wake of the referendum Brexit. Big rebound marked the biggest quarterly surge in OPEC on record.
Crude oil prices have still fallen sharply over the last two years from a peak of $ 115 per barrel in June, 2014. A few months later, OPEC rocked global markets with a surprise decision to maintain its production ceiling of 30 million, leaving the strategy to support the price increases of the market share. Tactics trigger prolonged battle with US shale producers to control the market, the energy market flooded with excess supply.
Technically
Resistance: 46.54 46.75 46.95 High / Low: 46.87 / 44.37
Support: 46.37 46.13 46.03 Running Price: 46.44
Comment: For intraday trade today suggest Buy at 46.64; stop loss at 48.64; target at 44.44.
Yen reversing previous directions
The yen rose in Asia on Wednesday, reversing the previous direction due to the monetary policy and the Aussie upheaval subsided after a consumer survey is far from expectations and supported by Chinese trade data which will be released later in the day.
USD / JPY was changing hands at 104.63, down 0.06%, while the AUD / USD was trading at 0.7611, down 0.16%. GBP / USD rising 0.31% to 1.3287 with Theresa May is set to take over as prime minister of Britain’s latest.
In Australia Westpac consumer sentiment index for July fell 3.0% compared with the reading of the last down 1.0%.
“With the lifting of the AUD above USD0.76 and the inflation target at risk seems reasonable policy choice to cut interest rates further. However, we recognize that despite the tariff cuts the Board is not lowered the growth forecast indicates that the motivation behind the decision in May entirely around the needs to reliably achieve the inflation target over the forecast period, rigid adherence to the policy in the future may be in question in particular, as hinted at in the survey, if the decline in interest rate spread to excessive excitement in asset markets. Therefore, we hope that these cuts will be, most likely, be the last in the current easing cycle, “said Evans.
China is expected to report trade data with a surplus balance of $ 46640000000 seen, with imports down 4.1% in June year-on-year, while exports fell 5.0%.
The US Dollar Index, which measures the strength of the dollar against six other major currencies, was last quoted down 0.03% to 96.53.
Overnight, USD / JPY surged on Tuesday completed a two-day rally was great, after confirmation that the former chairman of the Federal Reserve Ben Bernanke met with Japanese Prime Minister Shinzo Abe to discuss ways to help one of the world’s top economy avoid deflation.
Currency pair surged on Tuesday, reaching a two-week high of 104.98, before inching to 104.75 at the close of US afternoon trade, up 1.89% on the day. Since Abe’s Liberal Democratic Party (LDP) won in a landslide election upper house during the weekend, the US dollar has surged more than 4% against the yen, almost back to pre-Brexit levels of late last month. Yen still rising much against its American counterpart over the last month, as investors have entered into a safe haven currency to hedge against extreme volatility in global financial markets.
foreign exchange traders remained focused on economic development in Tokyo on Tuesday, where Bernanke met with Abe for approximately 30 minutes in the office of the prime minister of Japan, according to some reports. Discussion followed lengthy speculation that the former head of the US central bank has no plans to craft a strategy to bring the “helicopter money” to Japan in a final attempt to throw national help prevent deflation. The concept of helicopter involved large-scale printing of money by central banks that are distributed to the public as a way to help stimulate the economy. Koichi Hamada, a top adviser to Abe, told the Wall Street Journal that the outlook include money for helicopters as part of a large-scale easing initiative may have been discussed at the meeting.
“Bernanke said Japan should increase the nominal gross domestic product by fiscal policy and, in coordination with the use of monetary policy since the BoJ has various means available to ease policy,” said a spokesman for the Japanese government reporters outside the meeting.
Following the resounding victory LDP, Abe described the size of the stimulus ¥ 10 trillion ($ 98 billion) aimed at reviving the economy, including the proposal to fast-track construction on a series of high-speed rail across the nation. At the same time, Abe cabinet is projected to decrease in consumer inflation outlook to 0.4% for the full fiscal year ending next year, down from a previous estimate of 1.2%, a Japanese government source told Reuters. Japan’s prime minister appears ready to take advantage of all the “three arrows” abenomics a comprehensive economic plan ‘to help defeat inflation. The plan mainly consists of easing, stimulus and structural reforms.
Elsewhere, president of the Federal Reserve Bank of St. Louis James Bullard reiterated its position that the current economic conditions considers appropriate for the US central bank to raise short-term interest rates only once during the next two years. While giving a speech in St. Louis, Bullard noted that the results of flattening of the curve falling US Treasury long-term outcome is not necessarily a signal of imminent recession. In the wake of last month’s decision Brexit, government bonds yield around the world, including the US 10-year and 30-year US bonds has fallen to its lowest level all-time record.
Technically
Resistance: 104.35 104.47 104.71 High / Low: 104.97 / 99.95
Support: Running 104.04 103.90 103.75 Price: 104.15
Comment: For intraday trade today suggest sell at 103.81; stop loss at 104.00; target at 103.61.
The Dow Jones fell in opening trade
Stocks fell at the opening of the market on Wednesday despite previous Stocks closed higher in late trading Tuesday in the US supported a wide range of positive sentiment by a surge in crude oil, easing concerns Brexit and Japan provide economic stimulus plan.
US crude oil prices settled 4.56 per cent higher, at $ 46.80 a barrel, after falling more than 1 percent on Monday.
Meanwhile, in Japan, Prime Minister Shinzo Abe ordered a new stimulus after Japan’s coalition won the election by a landslide. Nikkei 225 rose nearly 2.5 percent overnight, while the yen erased all of the benefits of post-Brexit against the dollar.
The S & P 500 moved higher in the record and the Dow Jones Industrial Average closed the highest in history.
The Dow closed down about 120 points higher, with shares of Goldman Sachs contributed the most to gain.
The S & P 500 closed 0.7 percent higher, led by gains of more than 2 percent of the energy sector.
The Nasdaq index also rose about 0.7 percent to close in positive territory for 2016.
Scheduled speeches by Federal Reserve officials also becomes the investor’s radar.
St. Louis Fed President James Bullard said in prepared remarks Tuesday he still believes a rate increase would be needed in the future. Bullard, voting member of the rate-setting committee of the US central bank, has recently shifted his views on monetary policy, concluding that the US has entered a period of persistent low growth, low inflation, and low unemployment.
Minneapolis Fed President Neel Kashkari and Cleveland Fed President Loretta Mesteris scheduled to speak after the market close.
Towards opened, Fed Governor Daniel Tarullo said that better regulation on short-term funding is needed.
On the data front, wholesale inventories data for May showed a rise of 0.1 percent, in line with expectations. Meanwhile, reports Job Openings and Labor Turnover Summary (jolts) for May showed openings fell to 5.5 million, from 5.79 million in April.
Results of US Treasury rose, with the 10-year yield traded around 1.52 percent and the two-year note yields holding near 0.68 percent. The result of ten years reached an all-time low. On Tuesday, the 10-year note auction saw the weakest demand since 2009.
The US dollar was trading around 0.1 percent lower against a basket of currencies, with the euro trading near $ 1.106 and the British pound near $ 1.33.
Investors also digested quarterly results of Alcoa, which marks the unofficial start to the earnings season by beating forecasts on both the top and bottom lines Monday after closing.
On Thursday, financial giant JPMorgan Chase and BlackRock are scheduled to post results before the opening, along with Delta Air Lines.
European shares traded higher, such as the pan-European Stoxx 600 index rose about 1 percent. Asian equities also rose broadly.
Technically
Resistance: 18254 18282 18 292 High / Low: 18287/17725
Support: 18236 18217 18 203 Running Price: 18241
Comment: For intraday trade today suggest Sell at 18 205; stop loss at 18325; target at 18005.
