Greenback Edges Up as Yields Rise but Trump Policy Concerns Cap Gains

On Friday, the greenback inched up against the yen and euro, dragging away from recent slumps, but increased were capped as investors concentrated on a showdown between U.S. President Donald Trump and members of his own party over a new healthcare bill.

dono-2

On Friday, the greenback inched up against the yen and euro, dragging away from recent slumps, but increased were capped as investors concentrated on a showdown between U.S. President Donald Trump and members of his own party over a new healthcare bill.

Trump advised House Republican lawmakers that he will leave Obamacare in place and move on to tax reform if they do not get behind new healthcare legislation and support it in a vote on Friday.

Delay of the vote from Thursday initially hits the greenback  and stock markets, however, the greenback was given breathing space as Treasury yields become higher after Wall Street shares cut losses to close little changed.

Equities in Asia took heart and firmed on Friday, with Japan’s Nikkei (N225) increasing 1 percent.

“The dollar had been sold on the assumption that the healthcare bill would not pass, but some of those positions look to have been unwound. The market focus appears to have shifted to how Trump can pass the bill, from if he can push the bill through,” said Bart Wakabayashi, branch manager for State Street Bank and Trust in Tokyo.

“U.S. yields are higher and it’s not hard for dollar/yen to attract bids. It is often overlooked but the dollar continues to enjoy underlying support from widening U.S.-Japanese interest rate spreads.”

The greenback increased  0.35% at 111.340 yen, pulling back from a four-month low of 110.620 struck overnight.

“The U.S. currency was still on track for a 1.2% loss against its the yen this week, during which the safe-haven yen benefited from equity market volatility.”

The yen has also gained from a scandal linking a land agreement that has chipped away support for Prime Minister Shinzo Abe.

Although that may look counterintuitive, the yen has been a safe-haven of choice, even when risk events originate domestically.

When a shocking earthquake struck Japan in March 2011,  the currency rallied and caused a nuclear disaster, prompting an intervention by Tokyo to arrest its surge.

On Additional News

The healthcare vote, which had been projected to be an early legislative win for Trump, is perceived by investors as a litmus test for his ability to work with Congress and push through key policies like tax reform and infrastructure spending.

“Even if the bill happens to be passed, any bounce by the dollar is likely to be limited. There are plenty of other issues Trump has to contend with going forward, such as tax reforms,” said Ayako Sera, senior market economist at Sumitomo Mitsui Trust.

The pound declined 0.3% at $1.2490. It scaled a one-month peak of $1.2532 overnight on upbeat British retail sales statistics.

The Australian dollar decline to an eight-day low of $0.7610 following a drop in the price of iron ore, the country’s key export product.

Traders are encouraged to be updated with the latest market news at Trade12.com.Check out Trade12 reviews to know more about the trending economic events. Open an account now and learn more!

Financial trouble?  Let Exo Capital Markets manage your funds accordingly.  Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

 

Japan Stocks Increases at Close of Trade; Nikkei 225 Increase 0.23%

After the close on Thursday, Japan stocks increased as gains in the Construction, Paper & Pulp and Services sectors led shares higher.

shutterstock_598487315

After the close on Thursday, Japan stocks increased as gains in the Construction, Paper & Pulp and Services sectors led shares higher.

The Nikkei 225 increased 0.23% at the close in Tokyo.

The poorest performers of the session were DeNA Co Ltd (T:2432), which decline 5.45% or 138.0 points to trade at 2392.0 at the close. The Japan Steel Works, Ltd. (T:5631) dropped 2.44% or 46.0 points to end at 1843.0 and Concordia Financial Group Ltd (T:7186) declined 1.90% or 10.3 points to 531.7.

The top performers of the session on the Nikkei 225 were Toshiba Corp. (T:6502), which increased 6.75% or 13.1 points to trade at 207.2 at the close. Temporarily, Tokai Carbon Co., Ltd.(T:5301) added 4.20% or 20.0 points to end at 496.0 and Nippon Meat Packers, Inc.(T:2282) increased 3.39% or 105.0 points to 3205.0 in late trade.

Decreasing stocks outnumbered progressing ones on the Tokyo Stock Exchange by 1634 to 1383 and 325 ended unaffected.

The Nikkei Volatility, which gauges the implied volatility of Nikkei 225 options, increased  19.63% to 18.65.

Delivery of crude oil for May increased 0.50% or 0.24 to $48.28 a barrel.

Somewhere else in commodities trading, delivery of Brent oil in May increased 0.45% or 0.23 to hit $50.87 a barrel, although the April Gold Futures contract drop 0.21% or 2.65 to trade at $1247.05 a troy ounce.

USD/JPY increased  0.01% to 111.17, while EUR/JPY declined 0.01% to 120.01.

The US Dollar Index Futures increased 0.04% at 99.52.

On Additional News

Taiwan stocks increased after the close on Thursday, as increases in the  Construction, Electricity and Textile sectors led shares higher.  At the close in Taiwan, the Taiwan Weighted increased 0.08%.

The top performers of the session on the Taiwan Weighted were I-Hwa Industrial Co Ltd (TW:1456), which surge 10.00% or 1.15 points to trade at 12.65 at the close. In the meantime,Lung Hwa Eltrs (TW:2424) added 10.00% or 3.00 points to end at 33.00 and Champion(TW:1806) increased 10.00% or 0.79 points to 8.69 in late trade.

Increasing stocks outnumbered dropping ones on the Taiwan Stock Exchange by 426 to 332 and 121 ended unmoved.

The poorest performers of the session were Hiwin (TW:2049), which declines l 7.33% or 15.00 points to trade at 189.50 at the close. Zhen Ding (TW:4958) dropped 5.32% or 4.10 points to end at 73.00 and Falcon Power Co Ltd (TW:1516) declined 5.00% or 1.10 points to 20.90.

Shares in Lung Hwa Eltrs (TW:2424) increased to 52-week peaks; increasing 10.00% or 3.00 to 33.00. Shares in Champion (TW:1806) surge  to 52-week peaks; up 10.00% or 0.79 to 8.69.

USD/TWD declined 0.04% to 30.481, while TWD/CNY increased 0.04% to 0.2261.

The US Dollar Index Futures was unchanged 0.00% at 99.48.

Traders are encouraged to be updated with the latest market news at Trade12.com.Check out Trade12 reviews to know more about the trending economic events. Open an account now and learn more!

Financial trouble?  Let Exo Capital Markets manage your funds accordingly.  Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

Oil Prices Decline on Bloated U.S. Crude Storage

On Wednesday, oil prices plunged as increasing crude stocks in the United States underscored a continuing global fuel supply overhang in spite of an OPEC-led effort to reduce production.

On Wednesday, oil prices plunged as increasing crude stocks in the United States underscored a continuing global fuel supply overhang in spite of an OPEC-led effort to reduce production.

Prices for front-month Brent crude futures, the international benchmark for oil, were at $50.79 per barrel at 0451 GMT, dropped 17 cents, or 0.3%, from their last close.

U.S. West Texas Intermediate (WTI) crude futures declined 18 cents, or 0.4%, at $48.08 a barrel, 01:31AM ET.

“Crude oil prices fell as concerns over rising U.S. inventories resurfaced,” ANZ bank said on Wednesday.

The inventories of U.S. crude oil increased by 4.5 million barrels in the week to March 17 to 533.6 million barrels, the American Petroleum Institute (API) said late on Tuesday.

“The American Petroleum Institutes’ crude inventories stuck the knife into crude overnight, coming in at a 4.5 million barrel increase against an expected increase of 2.8 million barrels,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

“The American Petroleum Institutes’ crude inventories stuck the knife into crude overnight, coming in at a 4.5 million barrel increase against an expected increase of 2.8 million barrels,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

“If the API stuck the knife in, tonight’s EIA Crude Inventory figures may twist it. A blowout above the 2.1 million barrel increase expected, may well torpedo oil below the waterline,” he added.

Official U.S. Energy Information Administration (EIA) oil storage data is scheduled on Wednesday.

The bloated storage comes as U.S. oil output has increased more than 8% since mid-2016 to over  9.1 million barrels per day (bpd), levels comparable to late 2014, when the oil market  started to fall.

Increasing output  in the United States and somewhere else, and bloated inventories, are undermining efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to reduce output and prop up prices.

“OPEC’s market intervention has not yet resulted in significant visible inventory draw-downs, and the financial markets have lost patience,” U.S. bank Jefferies said on Wednesday in a note to clients, even though it added that the reductions would possibly start to show by the second half of the year, if the Organization of the Petroleum Exporting Countries (OPEC) extends its output cuts beyond June.

In spite of reductions, analysts warned of renewed or ongoing glut in coming years, especially as U.S. shale producers ramp up and once the Organization of the Petroleum Exporting Countries (OPEC) returns to full capacity.

U.S. bank Goldman Sachs (NYSE:GS) advised its clients in a note this week that a U.S. shale led production surge “could create a material oversupply in 2018-19.”

Traders are encouraged to be updated with the latest market news at Trade12.com.Check out Trade12 reviews to know more about the trending economic events. Open an account now and learn more!

Financial trouble?  Let Exo Capital Markets manage your funds accordingly.  Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

OECD SEES China Progress Slowing to 6.5% in 2017 and 6.3% in 2018

This year, China’s economic progress is expected to slow 6.5 percent and cool further to 6.3 percent in 2018, the Organisation for Economic Co-operation and Development (OECD) stated, though exports are set to pick up as global demand make stronger.

shutterstock_538019188.jpg

This year, China’s economic progress is expected to slow 6.5 percent and cool further to 6.3 percent in 2018, the Organisation for Economic Co-operation and Development (OECD) stated, though exports are set to pick up as global demand make stronger.

The Organisation for Economic Co-operation and Development (OECD) also advised of China’s blowup corporate debt in its bi-annual economic outlook report released on Tuesday.

“In terms of risk, we believe that internally the biggest risk is the accumulated and fast pace of growth of credit both in terms of shadow banking and the banking system,” Alvaro Santos Pereira, director of the country studies branch of the OECD’s Economics Department, told reporters.

“I think it’s important to intensify efforts to tackle this issue.”

China’s corporate debt is approximately 175% of GDP, one of the highest in emerging market economies, he stated, with state-owned enterprises (SOEs) accounting for around 75 percent of that.

“One of our top recommendations is to remove implicit guarantees to SOEs and other government and public entities,” said Margit Molnar, head of the China desk at the OECD’s Economics Department.

Such assurances have enabled SOEs and local government investment vehicles to continue accumulating debt.

The financial dangers in China are increasing because of indebted enterprises, increasing non-bank activities and enormous over capacity, according to the reports.

The OECD’s forecast for 2017 is in line with the Chinese government’s growth target of approximately 6.5% this year, against last year’s 6.5-7 percent range. The economy raised 6.7 percent in 2016, the sluggish pace in 26 years.

Several analysts believe the more modest objective will give policymakers additional room to tackle debt risks and introduce painful reforms, though authorities are expected to proceed carefully to avoid hurting growth.

Economic progress stays high “but is gradually and appropriately moderating as the population ages and the economy rebalances from investment to consumption,”  according to the report.

This year, export  volumes are expected to increase 3.4 percent  and 3.3 percent in the coming year, increased from 2.3% in 2016, due to surges global demand.

Import volumes are set to grow 7.7% this year and 6.0% in the year  2018, declined from 8.6% progress in 2016, as imports used to process exports decline.

The world’s second biggest economy needs more innovation, entrepreneurship, effective corporate governance and reform of its state-owned sector, the Organisation for Economic Co-operation and Development (OECD) added.

But the report did not single out the risk of rising protectionism from the United States, but noted that protectionism by some trading partners would harm Chinese exports.

However, it stated China could mitigate this by signing free trade agreements with other partners.

“Rising protectionism to the level that some people are talking about – or reversing some of the gains of the last ten, fifteen years – is going to be extremely costly to everyone,” Pereira said.

China’s fast economic growth has been accompanied by increasing inequality which could be battled by reforming the tax system and the household registration system which limits labor movement, the OECD stated.

Traders are encouraged to be updated with the latest market news at Trade12.com.Check out Trade12 reviews to know more about the trending economic events. Open an account now and learn more!

Financial trouble?  Let Exo Capital Markets manage your funds accordingly.  Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

 

Oil Prices Decline on Increase in U.S. Drilling

On Monday, oil prices declined as increasing U.S. drilling activity and steady supplies from the Organization of the Petroleum Exporting Countries (OPEC) countries in spite of touted output reductions pressured already-bloated markets.

noel-1

On Monday, oil prices declined as increasing U.S. drilling activity and steady supplies from the Organization of the Petroleum Exporting Countries (OPEC)  countries in spite of touted output reductions pressured already-bloated markets.

Prices for benchmark Brent crude futures were 29 cents, or 0.56%, below their last settlement at 0223 GMT, at $51.47 per barrel.

U.S. West Texas Intermediate (WTI) crude futures declined 38 cents, or 0.78%, at $48.40 a barrel.

Traders stated that prices came under pressure from increasing U.S. drilling and continuing high supplies by the Organization of the Petroleum Exporting Countries (OPEC) in spite of its pledge to reduce output by approximately 1.8 million barrels per day (bpd) together with some other producers like Russia.

“There is good, strong momentum to the downside,” futures brokerage CMC Markets said in a note on Monday.

U.S. drillers added 14 oil rigs during the week to March 17, bringing the total count up to 631, the most since September 2015, energy services company Baker Hughes Inc stated on Friday, extending a recovery that is expected to increase shale output by the most in six-months in April.

Therefore, U.S. oil  production has increased to more than 9.1 million barrels per day (bpd) from below 8.5 million barrels per day (bpd)in June the previous  year.

Reacting to the continuing surplus in markets, financial oil traders  reduce their net long U.S. crude futures and options positions in the week to March 14, the 3rd consecutive cut, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

 “This unwinding of position is both a cause and reflection of the big fall in crude oil prices when the cracks in the OPEC/non-OPEC deal emerged and when it seems like it became evident shale oil is back and the new swing player,” said Greg McKenna, chief market strategist at brokerage AxiTrader.

Defying increasing sentiment that oil markets remain oversupplied, some analysts say markets will tighten soon, arguing that the OPEC-led reduction will only begin to bite from April, just as demand recover  as refineries return from current maintenance outages.

“The cuts in OPEC production from the start of 2017 should start to show up between mid-March (now) and mid-April. Over the coming weeks we expect a sharp reduction in imports and increase in refining runs,  which should lead to impressive crude inventory draws,” analysts at AB Bernstein said on Monday in a note to clients.

“The combination of falling imports and stronger crude runs should lead to substantial inventory cuts over the coming months,” they said.

Traders are encouraged to be updated with the latest market news at Trade12.com.Check out Trade12 reviews to know more about the trending economic events. Open an account now and learn more!

Financial trouble?  Let Exo Capital Markets manage your funds accordingly.  Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

Asian Shares Mix as Investors Expect U.S. Policy Details

On Friday, Asian shares traded mixed in a light regional data day and investors input into the next set of steps for U.S. economic policies as the Trump administration get ready its health care and tax reduction plans.

art-in

On Friday, Asian shares traded mixed in a light regional data day and  investors input into the next set of steps for U.S. economic policies as the Trump administration get ready its health care and tax reduction plans.

Japanese benchmark Nikkei 225 decline 0.35% on Friday, whereas in South Korea, the Kospi increased 0.1% as the won declining against the greenback. Then on Friday, Secretary of State Rex Tillerson visited Seoul  as part of his tour of Asia. On Thursday in Japan, Tillerson stated that part of his visit was to find a “new approach” to deal with threats from North Korea, 12:02AM ET.

Australia’s S&P/ASX 200 increased 0.32%, while China’s Shanghai composite was nearly flat in early trade and Hong Kong’s Hang Seng was also held steady.

On Thursday,  Chinese group, the Global CEO Fortune Club launched its first overseas fund with a goal to invest in Australian infrastructure projects. The group anticipates to find opportunities for public-private partnership from its base in Melbourne.

Suddenly, U.S. equities closed mostly lower on Thursday, as increased in Financials were offset by losses in health care, after President Trump’s budget blueprint recommended budget reductions to the National Institutes of Health (NIH).

Healthcare stocks plummeted, as President Trump’s budget blueprint proposed reducing the NIH budget by $5.8 billion, while Financials, mostly banks, traded hesitantly higher after the Fed Reserve hiked interest rates on Wednesday.

On Wednesday, the Fed Reserve increased  interest rates by 0.25% to a target range of 0.75% to 1%, however,  kept its previous prediction of three rate increases this year unaffected.
Meanwhile,  economic data failed to boost sentiment while U.S. crude futures fight to hold onto gains from the prior session.

Weekly initial unemployed claims drop to 241,000. Housing starts increase at a seasonally adjusted yearly rate of 1.288 million in February, although the Philadelphia Fed Index topped forecasts at 32.8 for March. The Philadelphia Fed Index and the housing, both starts beat forecasts.

The Dow Jones Industrial Average closed 0.07% lower at 20,934. The S&P 500 lost 0.16% and the Nasdaq Composite added 0.01% to close at 5,900.

On Additional News

At the close in Australia, the S&P/ASX 200 gained 0.24%. REITs, Gold and Financials sectors led shares higher.

The poorest performers of the session were Southern Cross Media Group Ltd (AX:SXL), which declined 3.00% or 0.040 points to trade at 1.295 at the close. Retail Food Group Ltd (AX:RFG) dropped 2.84% or 0.160 points to end at 5.480 and Seven West Media Ltd(AX:SWM) declined 2.80% or 0.020 points to 0.695.

The top performers of the session on the S&P/ASX 200 were IPH Ltd (AX:IPH), which increased 6.52% or 0.300 points to trade at 4.900 at the close. In the meantime, Myer Holdings Ltd (AX:MYR) added 5.09% or 0.055 points to end at 1.135 and Galaxy Resources Ltd(AX:GXY)  increased 4.55% or 0.023 points to 0.517 in late trade.

Increasing  stocks outnumbered decreasing ones on the Australian Stock Exchange by 592 to 500 and 313 ended unaffected.

The S&P/ASX 200 VIX, which gauges the implied volatility of S&P/ASX 200 options, increased 7.99% to 9.745.

Delivery of gold futures  for  April declined 0.09% or 1.10 to $1226.00 a troy ounce.

Somewhere else in commodities trading, delivery of crude oil in April increase 0.25% or 0.12 to hit $48.87 a barrel, although the May Brent oil contract increase 0.14% or 0.07 to trade at $51.81 a barrel.

AUD/USD increased p 0.10% to 0.7685, while AUD/JPY surges 0.21% to 87.16.

The US Dollar Index Futures were  unmoved 0.00% at 100.09.

Traders are encouraged to be updated with the latest market news at Trade12.com.Check out Trade12 reviews to know more about the trending economic events. Open an account now and learn more!

Financial trouble?  Let Exo Capital Markets manage your funds accordingly.  Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.

Oil Prices Prolong Gains after Decline in U.S. Stockpiles

On Thursday, crude oil prices increased in early Asian trading, lengthening gains from the prior session after official data indicated U.S. stockpiles had eased from record highs.

emerson-3

On Thursday, crude oil prices increased in early Asian trading, lengthening gains from the prior session after official data indicated U.S. stockpiles had eased from record highs.

On Wednesday, the prices increased after a skid of market reports and official data offered some expectation that a near three-year global surplus in oil is coming to an end, albeit more slowly than many expected.

The market was also afloat after the Fed Reserve increased interest rates in line with expectations but did not indicate any pick-up in the pace of further increases.

U.S. West Texas Intermediate (WTI) crude increased  31 cents, or 0.6%, at $49.17 a barrel by 0202 GMT, having increased 2.4% in the prior session, its first surge in eight days.

Brent futures increased 35 cents, or 0.7%, to $52.16. They had their first surge in seven days on Wednesday, gaining 1.7%.

The benchmarks have bounced off their lowest levels since the Organization of the Petroleum Exporting Countries (OPEC) agreed at the end of the previous year to reduce crude output, with an initial price surge evaporating as stockpiles stayed high.

Global oil inventories increased for the first time in six months in January, in spite of the Organization of the Petroleum Exporting Countries (OPEC) deal, the International Energy Agency stated in its monthly oil report on Wednesday.

However,  data from the U.S. Energy Information Administration (EIA) indicated U.S. crude  stocks declined last week, the first weekly drop after nine straight surges.

Crude inventories dropped  237,000 barrels during the week to March 10. Analysts had forecast a surges of 3.7 million barrels.

The inventories have been carefully observed by oil traders to decide whether the OPEC agreement to cut production  is reducing the global surplus.

“Inventories are the barometer of global oil market rebalancing,” Bernstein Energy said in a note on Thursday.

“While the large (global) inventory build seems counter-intuitive given the cuts to OPEC supply, there are good reasons for this,” Bernstein said, citing seasonal declines in demand, time lags between cuts and deliveries and traders tapping floating storage.

Oil bulls were also encouraged after the IEA said demand should overtake supply in the first half of current  year.

Traders are encouraged to be updated with the latest market news at Trade12.com.Check out Trade12 reviews to know more about the trending economic events. Open an account now and learn more!

Financial trouble?  Let Exo Capital Markets manage your funds accordingly.  Exo Capital Markets strives to become the leading financial services firm by offering its clients with the most modern solutions in the industry.