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Market Review, November 30, 2016

The dollar regained its positive momentum yesterday, however limited, as trades braced for a meeting by the Organization of the Petroleum Exporting Countries (OPEC) later in the day which could spark volatility in financial markets and weigh on the U.S. currency.

The dollar reached once again the 113 levels against the yen on on robust revised U.S. GDP data but had failed to sustain the gains as U.S. yields, a key driver of the dollar recently, initially pulled back from 16-month highs before rising in Asia on Wednesday.

The rate hike talks and the stronger dollar, dampen gold price. The Fed is expected to raise interest rates next month and bolster the U.S. currency. This will make commodities a bit more expensive for global buyers.

Oil prices have edged up overnight ahead of an OPEC meeting later in the day, with members of the producer cartel trying to thrash out an output cut to curb oversupply that has seen prices more than halve since 2014. Traders said markets were jittery, and that prices could sharply swing either way depending on developments at the Organization of the Petroleum Exporting Countries (OPEC) meeting in Vienna. Oil dropped nearly 4 percent the previous session over disputes between Saudi Arabia, Iran and Iraq regarding details of the planned cut.

U.S. stocks were higher after the close on Tuesday, as gains in the Healthcare, Financials and Utilities sectors led shares higher.

 

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Market Review, November 29, 2016

Yesterday we saw the dollar start the morning off weaker, as the greenback was taking a pause, since Sunday, from the recent bullish momentum that has started since the elections.
As the trading day proceeded, the dollar clawed back some losses.

Political risks helped drag down the euro from its nearly two-week high of $1.0686 touched overnight. It last traded at $1.0599, down 0.2 percent from late Monday’s North American levels. Worries about Italy’s banking system have been mounting ahead of a Dec. 4 referendum on constitutional reform, which could unseat the government of Prime Minister Matteo Renzi.

Volatile crude oil prices ahead of this week’s oil producers’ meeting kept investors’ risk appetite in check as scepticism is affecting the markets. The Organization of the Petroleum Exporting Countries (OPEC) will gather in Vienna on Wednesday to discuss a planned output cut in an effort to curb a supply glut.

U.S. stocks were lower after the close on Monday, as losses in the Oil & Gas, Financials and Healthcare sectors led shares lower.

 

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Market Review, November 28, 2016

After rallying without pause for the bigger part of the month, the USD gave in to gravity overnight and pulled away from 14-year highs together with the US Treasury yields.

USD/JPY eased and is now back to to trading under the 112 levels.
EUR/USD is 1.065.

The dollar has surged virtually without a rest since Republican Donald Trump was elected president earlier this month, triggering a spike in Treasury yields on heightened expectations of enlarged fiscal spending and inflation.

The easing USD has given gold the chance to recover as investors are focused on the recent declines as an opportunity to buy. After reaching $1,170 last week, the precious metal is currently trading at $1,191.

Crude oil prices rebounded in Asia on Monday as investors bet nervously on a a down-to-the-wire decision by OPEC to curb output as proposed. U.S. crude oil prices rose 0.24% to $46.17 a barrel on the New York Mercantile Exchange. Global benchmark Brent futures gained 0.29% to $48.38 a barrel.

 

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Market Review, November 25, 2016

The USD held steady against the other major currencies yesterday, eventhough the trading volumes remained low due to Thanksgiving holiday.

Oil prices edged higher as uncertainty over a planned OPEC-led output cut and thin liquidity due to the U.S. Thanksgiving holiday weighed.  A strong dollar, in which oil is traded, makes fuel purchases more expensive for holders of other currencies, potentially curbing demand.

Gold fell through the key psychological level of $1,200 on Wednesday, pressured lower by the strong dollar. The precious metal touched lows of US$1,179.75, a level not seen since February 8.
Gold prices could now come under siege, which will likely see falls to as low as $1168.13 and beyond.

 

Les marchés actions américains ont ouvert en léger recul mardi, malgré la possibilité de voir la Banque centrale européenne (BCE) augmenter temporairement ses rachats d'actifs mensuels et en dépit du net rebond des mises en chantier en avril aux Etats-Unis. Quelques minutes après le début des échanges, le Dow Jones perdait 0,16%, le Standard & Poor's 500 0,13% et le Nasdaq 0,03%. /Photo d'archives/REUTERS/Carlo Allegri

Market Review, November 24, 2016

The USD hovered at a fresh 14-year high against the other major currencies yesterday, after the release of mixed US data failed to ease optimism over the strength of the economy.

Durable goods and Manufacturing PMI were above expectations while Initial jobless claims and New home sales disappointed.

The dollar has remained supported since the expectations for the President-elect Donald Trump’s plans to ramp up fiscal spending and cut taxes will spur economic growth and inflation. Faster growth would spark inflation, which in turn would prompt the Fed to tighten monetary policy a faster rate than had previously been expected. Fed Chair Janet Yellen on Thursday reiterated that a rate hike “could well become appropriate relatively soon.”

US crude oil stock fell last week after three weeks of builds. Crude oil prices were relatively steady after the data, as the market continues to ready for next week’s meeting of the Organization of the Petroleum Exporting Countries.

Gold prices fell to the lowest levels since February on Wednesday after the dollar surged to fresh 14-year highs as upbeat U.S. economic reports underlined expectations for higher interest rates.

U.S. stocks were mixed after the close on Wednesday, as gains in the Industrials, Telecoms and Oil & Gas sectors led shares higher while losses in the Utilities, Technology and Consumer Goods sectors led shares lower.

 

 

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Market Review, November 23, 2016

The dollar gained further strength against the other major currencies yesterday, as the release of upbeat US housing sector data and as sustained optimism over the outlook of economy continued to support it.

The USD has remained supported amid expectations that President-elect Donald Trump’s plans to ramp up fiscal spending and cut taxes will spur economic growth and inflation.

Gold started the day off promising, showing signs of a possible intraday recovery, but the commodity gave up on those gains as the dollar regained ground following the housing data and the precious metal pushed back towards recent lows. Intraday range was $1,208.25 – $1,220.85.

Crude oil prices rose to their highest levels this month as a growing consensus emerged in the market that OPEC would overcome internal disputes and strike a deal to reduce crude output by the end of the month. After weeks of doubts over the resolve of the 14-member cartel, most oil market participants now believe OPEC would harm its reputation if an output cut deal were not struck next week.

U.S. stocks were higher after the close on Tuesday, as gains in the Telecoms, Consumer Services and Basic Materials sectors led shares higher.

 

 

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Market Review, November 22, 2016

The overall optimism over the US economy since Donald Trump’s election and expectations for an upcoming rate hike continue to support the dollar that is still hovering near 14-year peak against the other major currencies.

USD/CAD slid a tad lower as rising oil prices supported the commodity-currency CAD, after Russian President Vladimir Putin said he sees a “high probability” that an agreement to curb oil production will be reached at a meeting later this month.

Yesterday, oil prices rose over 3% as the dollar eased a bit and as major oil producing countries appeared to be moving closer to agreeing to limit output.

Gold prices ticked higher in European hours on Monday, but held near the lowest level since May on expectations for a Federal Reserve rate hike and fiscal stimulus by President-elect Donald Trump.

U.S. stocks were higher after the close on Monday, as gains in the Oil & Gas, Basic Materials and Utilities sectors led shares higher.

 

 

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Market Review, November 18, 2016

The dollar edged further up yesterday hovering close to a fresh 14-year peak against the other major currencies, as a fresh batch of strong US data boosted the optimism over the strength of the economy even further.

The strong data fueled further expectations for a December rate hike by the Federal Reserve, as Fed Chair Janet Yellen also warmed of the danger of waiting too long to tighten monetary policy in her testimony yesterday.
The comments came a day after Philadelphia Fed head Patrick Harker said that he was in favor of raising interest rates, while Cleveland Fed President Loretta Mester said the Fed must not overreact to market moves following the shock result of the presidential election.

Gold prices declined as sentiment moved into a bearish territory ahead of an expected Fed rate hike next month. Gold for December delivery on the Comex division of the New York Mercantile Exchange eased 0.85% to 1,206.55 a troy ounce.

Crude prices dropped in Asia on Friday with all eyes on OPEC to conclude terms at the end of the month for announced plans to trim output and weekly U.S. rig count data loomed.

U.S. stocks were higher after the close on Thursday, as gains in the Consumer Services, Financials and Technology sectors led shares higher.

 

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Market Review, November 17, 2016

The dollar climbed to a near 14-year high against the other major currencies yesterday. This aggressive surge is tied to bets on pro-growth policies under US President-elect Donald Trump.

It does seem like the market has gone a bit too far ahead of itself. It might be vulnerable for a short-term pullback as analysts cautioned the greenback is bulnerable to a letdown.

While traders have increased their expectations on the Federal Reserve raising interest rates at its Dec. 13-14 policy meeting, the dollar rally may cause Fed policy-makers to reconsider such a move because of its repercussions on U.S. exports, analysts said.
Today, Fed Chair Janet Yellen will testify before the Congress’ Joint Economic Committee, where she might raise concerns about the dollar’s surge.

While traders have increased their expectations on the Federal Reserve raising interest rates at its Dec. 13-14 policy meeting, the dollar rally may cause Fed policy-makers to reconsider such a move because of its repercussions on U.S. exports, analysts said. U.S. interest rates futures implied traders saw about a 91 percent chance the Fed would raise the target range on policy rates to 0.50-0.75 percent next month, CME Group’s FedWatch showed.

US crude stock was up 5.274mn barrels last week against a forecast of only 1.480mn, crude oil futures have dropped by 1% following the report but still, the strong build in stocks makes investors believe that OPEC will push for a consensus on oil cut.

U.S. stocks were mixed after the close on Wednesday, as gains in the Telecoms, Technology and Consumer Services sectors led shares higher while losses in the Financials, Oil & Gas and Utilities sectors led shares lower.

 

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Market Review, November 16, 2016

The dollar held strong near 11month high against the other major currencies yesterday as unexpected strong data pushed the dollar further up.

The dollar moved back above the 100 mark after stronger-than-forecast retail sales. Investing.com’s Fed Rate Monitor Tool shows 85.8% chance of December hike, up from 81.1 prior to data.

USD/JPY is currently trading at 109.150 – highest level since June.
EUR/USD is at 1.07480.

Gold prices are still under pressure as the strong dollar and the high expectation for a December rate hike are causing for a risk-on sentiment. The precious metal is currently trading at $1,230.

API reports showed a another higher-than-expected build which only added to the already bearish sentiment. This morning though, we are seeing the commodity trading around $47/barrel, up 0.79%. Investors will be turning their attention to the inventory data set for later in the day.

U.S. stocks were higher after the close on Tuesday, as gains in the Oil & Gas, Telecoms and Utilities sectors led shares higher.