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Market Review, August 31, 2016

The dollar got even stronger yesterday against the other major currencies, after comments by Federal Reserve Vice Chairman Stanley Fischer added to expectations for an upcoming U.S. rate hike.

EUR/USD dropped 0.29%.

GBP/USD was little changed as the Bank of England earlier reported that net lending to individuals increased by £3.8 billion in July.

USD/JPY climbed 0.73% to 102.66.

Gold prices were under pressure yesterday, struggling near 5-week lows as investors focus on the rate hike talks and expectations.

Oil prices fell , with Brent losing nearly 2 percent, as the dollar rallied and glut worries grew amid forecasts for higher U.S. crude stockpiles and Iran’s remark that it was on target to reach peak production.

U.S. stocks were lower after the close on Tuesday, as losses in the Utilities, Consumer Goods and Oil & Gas sectors led shares lower.

 

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Market Review, August 30, 2016

The dollar rose to fresh two-week highs against the other major currencies yesterday, as upbeat US data and fresh hopes for an upcoming rate hike by the Federal Reserve.

Personal spending increased 0.3% last month, in line with expectations. Core PCE price index was up 1.6%.

EUR/USD fell 0.22% to 1.1170, GbP/USD declined 0.48% and USD/JPY gained 0.37%.

Gold gained during the Asian session as investors are looking ahead to NFP figures in the US at the end of the week for a clearer view of a possible rate hike this year. Gold for December delivery edged up 0.07% to $1,328.05.

Oil prices dropped nearly 2% on caution over galloping Middle East crude output and a stronger dollar.

Wall Street gained yesterday, as financial and commodity-sector stocks led the S&P higher, following the upbeat US data, pointing to a pick-up in the US economic growth.

 

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Market Review, August 29, 2016

Friday all eyes were on the highly-anticipated speech by Federal Reserve Chair Janet Yellen.

When the speech started, the dollar initially popped higher before turning lower against the other major currencies after Yellen said the case for US interest rate hikes have “strengthened”, citing improvements in the labor market and hopes for modest economic growth.

The dollar reversed soon after on the view that the timing of any such monetary tightening is still some way off.

EUR/USD rose to 1.1294 – USD/JPY dropped to 100.23 and GBP/USD rose to 1.3231.

Earlier Friday, data confirmed that the U.K. economy grew by 0.6% in the second quarter and expanded 2.2% on a year over year basis,  indicating that the U.K. economy remained strong ahead of the Brexit referendum.

As Yellen remarks reinforced that the decision on the timing of a rate hike depends on the data, gold ticked down.

Crude prices also dropped as investors noted Saudi Arabia does not see the need for major efforts by global producers on output.

U.S. stocks ended modestly lower after a volatile session , having bounced between gains and losses as investors wrestled with the likely timing of a U.S. interest rate hike following comments from top Federal Reserve officials.

This week, nonfarm payrolls data from the U.S. in the spotlight along with data on China’s manufacturing sector, amid ongoing concerns over the health of the world’s second biggest economy. Markets in the U.K. are closed on Monday.

 

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Market Review, August 26, 2016

The dollar was little changed against other major currencies yesterday, after the release of upbeat US data, as investors are still cautious ahead of Federal Reserve Chair Janet Yellen’s highly-anticipated speech today.

The Commerce Department said durable goods orders rose by 4.4% last month, compared to expectations for an advance of 3.3%.

June’s orders were revised down to show a decrease of 4.2% from a previously reported 3.9% decline.

Core durable goods orders, which exclude volatile transportation items, rose 1.5% last month, compared to forecasts for a 0.5% gain.

At the same time, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending August 20 decreased by 1,000 to a five-week low of 261,000 from the previous week’s total of 262,000.

During the Asian session the yen was slightly weaker after consumer prices data from Tokyo showed the core measure down more than expected with attention now riveted on the meeting of central bankers in the U.S. state of Wyoming later in the day with the Fed chief slated to give views.

USD/JPY rose to 10.56, up 0.03%.

Gold prices slumped to a fresh 4-week low, adding to losses after a pair of U.S. economic reports increased the chances of an interest rate increase in coming months.

Oil prices were lower for the second straight session, as market remained fixated on a global supply glut and amid fading hopes that mjor oil producers will reach a deal to freeze output.

U.S. stocks were lower after the close on Thursday, as losses in the Healthcare, Consumer Services and Oil & Gas sectors led shares lower.
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Market Review, August 25, 2016

Yesterday, the dollar pushed higher against other major currencies, despite the release of weak US existing home sales data as sentiment on the greenback continued to strengthen ahead of Federal Chair Janet Yellen’s highly anticipated speech on Friday.

Any indication that a September hike is in the cards should produce a dollar surge, analysts said.Recent hawkish comments from Fed Vice Chairman Stanley Fischer and New York Fed President William Dudley have raised expectations that Yellen might shift to a less cautious stance, though some investors remain doubtful.

“While recent Fed officials have signaled that rates could rise as early as September, Mrs. Yellen’s reputation as a policy dove has kept many traders skeptical that she’ll echo last week’s hawkish Fed comments,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington

EUR/USD dropped 0.4% to 1.1264.

USD/JPY rose 0.2% to 100.40

GBP/USD, on the other hand, rose to a three-week high at $1.3227.

Oil dropped yesterday after an unexpectedly large inventory build in the world’s biggest oil consumer renewed worries about oversupply.
Brent fell 91 cents or 1.8%, to close at $49.05.

Gold eased in cautious trade as investors await views from the US Fed chief at the end of the week to set the tone on chances of a rate hike this year.

U.S. stocks were lower after the close on Wednesday, as losses in the Healthcare, Basic Materials and Technology sectors led shares lower.

 

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Market Review, August 24, 2016

The dollar moved lower yesterday, as focus turns to Yellens speech later this week.

Market watchers are waiting to see if Yellen will restate the hawkish view of the economy expressed by Fed officials in recent weeks or echo the minutes of the Fed’s July meeting, which indicated that officials are divided on when to raise rates.

According to Investing.com’s Fed Rate Monitor Tool, investors are pricing in an 18% chance of a rate hike by September, up from 12% at the start of last week. December odds were at around 50%

Gold prices were on the positive side moving away from the prior session’s two-week low as the U.S. dollar weakened with markets in wait and see mode ahead of a speech by Federal Reserve Chair Janet Yellen later this week that could provide clues about the timing of a U.S interest rate hike.

Oil prices fell sharply for the second day in a row, retreating further from the highest levels in nearly two months as market players shifted their focus to weekly data from the U.S. on stockpiles of crude and refined products. API reports showed a surprising stockpile build, pushing prices down 1% in Asian session.

US stocks were higher after the close, as gains in the Basic Materials, Oil & Gas and Technology sectors led shares higher.

 

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Market Review, August 23, 2016

The dollar pared gains against the other major currencies in subdued trade yesterday, but hopes for a possible U.S. rate hike before the end of the year still lent support to the greenback.

The dollar remained supported after Federal Reserve Vice Chair Stanley Fischer on Sunday noted the strong gains of U.S. labor market under the current economic expansion that is close to the Fed’s goals of maximum employment and price stability.

Gold prices declined amid indications the Fed could raise interest rates as soon as next month. Gold for December delivery settles at $1,340.45, down 0.42%.

Oil settled down more than 3 percent yesterday, retreating from last week’s two-month highs, on worries about burgeoning Chinese fuel exports, more Iraqi and Nigerian crude shipments and a rising U.S. oil rig count.

US stocks were mixed and pretty flat as gains in the Financial secor led shares higher while losses in the Oil & Gas sector led shares lower.

 

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Market Review, August 22, 2016

On Friday the dollar remained broadly higher against the other major currencies, as the previous session’s U.S. data continued to support and as comments by San Francisco Federal Reserve Bank President John Williams reignited some hopes for a near-time rate hike.

“The dollar had taken a pretty big tumble in the first part of this week, so people had gotten short the dollar and now they’re just buying back,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York.

Foreign exchange traders could be bracing for a period of cautious, sideways trading next week, ahead of Fed chair Janet Yellen’s appearance at a closely-watched speech next Friday in Jackson Hole, Wyoming.

Any rate hikes by the Fed this year are viewed as bullish for the dollar as investors pile into the greenback in order to capitalize on higher yields.

EUR/USD dropped 0.3%, USD/JPY added 0.36%.

Gold fell sharply due to a stronger dollar, as investors await a highly-anticipated appearance from Janet Yellen for more clarity on the Federal Reserve’s uncertain interest rate outlook.
Gold for December delivery settled at $1,346.25, down 0.81% on the session.

Oil prices settled steady to higher on Friday, with US cride posting its biggest weekly gain since March after surging nearly 25 in a little over two weeks, a rally analysts cautioned was not justified by fundamentals.

U.S. stocks pared sharp losses on Friday, remaining near all-time record-highs amid wavering, volatile oil prices and diverging comments from key Federal Reserve policymakers on the possibility of a near-term interest rate hike.

 

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Market Review, August 19, 2016

The dollar remained close to seven-week lows yesterday, after data showing a larger than expected fall in jobless claims as dovish Federal Reserve meeting minutes continued to weigh.

EUR/USD was near seven-week peaks, up 0.19%, USD/JPY edged higher by 0.16% and the GBP/USD advanced by 0.82%.

The pound was boosted after data showing that the UK retail sales rose more strongly than expected in July, as consumers shrugged off the Brexit vote.

Amid a weak dollar, gold inched up, settling at $1,357, up 0.61% (Gold for December delivery).

Brent crude futures surged above $50, while hitting its highest level in nearly two months, as global oil prices continued to rally on the prospects that major producers could reach a deal to stabilize worldwide energy markets at a closely-watched meeting next month. Brent settled at $50.80, up 1.91% on the day.
WTI closed at $48.17, 2.88% higher on the session.

Wall Street closed slightly up as Brent oil’s rise above $50/barrel bossted energy shares and an upbeat outlook lifted Wal-Mart to 14-month high.

 

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Market Review, August 18, 2016

The US dollar edged lower yesterday against the euro, yen and Swiss franc, after minutes from the Federal Reserve’s July’s meeting showed general agreement that more data was needed before the next rate increase from the central bank.

Analysts said the minutes disappointed traders who expected the Fed to take a more hawkish tone. Those expectations were bolstered Tuesday, when New York Fed President William Dudley and Atlanta Fed President Dennis Lockhart signaled a potential rate increase before the end of the year.

Ahead of the release of the Fed minutes, gold inched down in a cautious trade but gained in the Asian session as investors noted trade data out of Japan that signaled continued weak demand a mulled the latest FOMC minutes as suggesting a divided committee on the timing of any rate hike.

Crude hit five-week highs, as investors reacted to an unexpected decline in domestic stockpiles last week along with further signals that Saudi Arabia could ramp up production to a new all-time record in August. WTI closed at $46.76, up 0.39%, Brent settled at $49.78, up 1.10% on the day.

US stocks were flat yesterday, as markets disregarded the minutes from the Fed, which portrayed a committee largely split on the timing of the US central bank’s next interest rate hike.

 

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