Oil slips closer to six-year low on Japan data, oversupply

Posted by Forexsq 56 days ago (http://www.reuters.com)
img Oil fell towards six-year lows on Monday on data showing the economy of Japan, the world's third-biggest oil consumer, contracted in the second quarter.

The global oversupply picture was exacerbated by another weekly jump in U.S. oil rig additions on Friday, hinting at growing production, and news that Oman produced a record-breaking 1 million barrels per day in July.

U.S. crude CLc1, or West Texas Intermediate (WTI), for September was trading 65 cents lower at $41.85 a barrel at 1155 GMT, close to its lowest level in more than six years.

Brent futures LCOc1 briefly reversed losses on news that Kuwait's 200,000-barrel-per-day Shuaiba refinery had been shut down following a fire.

Brent for October reached an intra-day high of $49.44 a barrel shortly after news of the fire but had fallen back to $49.05 by 1155 GMT, down 14 cents on its previous close. The Brent September contract expired on Friday.

Over the past two weeks, U.S. crude prices have fallen by more than 10 per

China efforts to slow yuan currency fall hoist Europe shares, bond yields

Posted by Forexsq 60 days ago (http://www.reuters.com)
img European shares rallied on Thursday as calm returned to global markets after China's central bank said there was no basis for further depreciation of its yuan currency following a sharp devaluation this week.

U.S. stock futures ESc1 were up 0.3 percent, with shares having recouped a lot of their falls in the previous session already. The global rally in equities started on Wall Street in late trade on Wednesday, with major indexes ending roughly flat after falling in early trade.

The perkier mood in riskier assets soured investor appetite for safe-haven government bonds, which had benefited from a sharp sell-off in equity and commodity markets prompted by the devaluation that saw the yuan slide around 4 percent.

The People's Bank of China (PBOC) said there was no basis for more yuan depreciation in light of strong economic fundamentals, even though the yuan dropped for the third straight day.

The PBOC set its guidance rate at 6.4010 per dollar prior to the market opening,

What a Weaker Chinese Yuan Means for the World

Posted by Forexsq 61 days ago (http://www.bloomberg.com)
img The steepest slide in the yuan in two decades is a game changer. The last time the currency moved this much -- 1994 -- China's economy ranked as the world's eighth largest, just behind Canada's, and few outside its borders would have even been able to put a name to the currency.

Now, the nation's move to allow the market a greater say in setting the yuan level is roiling currencies, commodities and stocks the world over and reshaping the global economic outlook.

Can the Fed still lift off if the greenback keeps strengthening? Bank of America Merrill Lynch analysts are among those who think the yuan devaluation clouds the picture for Janet Yellen.

It was like money for jam -- borrow cheaply offshore, somehow get the funds to China to earn a hefty interest-rate margin, and sell out later with a currency gain to boot. A sustained yuan downturn would kill the carry trade.

Even putting aside a weaker yuan, deepening factory-gate deflation and the likely spillover to export pri

China Starts Currency War Again

Posted by Forexsq 62 days ago (http://www.bloomberg.com)
img China devalued the yuan in a move that rippled through global markets, as policy makers stepped up efforts to support exporters and boost the role of market pricing in Asia’s largest economy.

The central bank cut its daily reference rate by 1.9 percent, triggering the yuan’s biggest one-day drop since China ended a dual-currency system in January 1994. The People’s Bank of China called the change a one-time adjustment and said its fixing will become more aligned with supply and demand.

The announcement suggests policy makers are now placing a greater emphasis on efforts to combat the deepest economic slowdown since 1990 and reduce the government’s grip on the financial system. Authorities had been propping up the yuan to deter capital outflows, protect foreign-currency borrowers and make a case for official reserve status at the International Monetary Fund.

“The one-off devaluation of the fix and allowing more market-based determination takes us into a new currency regime,” s

U.S. economy gains 215,000 jobs in July

Posted by Forexsq 66 days ago (http://money.cnn.com)
img America's economy is in good but not great shape this year.

The U.S. economy added 215,000 jobs in July. Economists surveyed by forexSQ predicted the economy would add 216,000 jobs. Anything above 200,000 is considered very solid.

The unemployment rate stayed the same at 5.3%, which is its lowest point since April 2008, according to the Labor Department. That's considered near full employment.

"Job growth is quite strong," says Jim O'Sullivan, chief economist at High Frequency Economics, a research firm in New York. "This pace of employment growth is clearly strong enough to keep the unemployment rate trending down."

Wage growth -- the missing piece to America's economic progress -- remained sluggish in July. Average hourly earnings only rose 2.1% compared to the prior year. Wage growth is the reason many Americans haven't felt the benefits of the economy's recovery. The Federal Reserve wants to see annual wage growth closer to 3.5%.

"Wage growth numbers are still tame,

Dollar swings up, stocks dip after solid U.S. jobs data

Posted by Forexsq 66 days ago (http://www.reuters.com)
img The dollar gained and Wall Street stock futures extended losses as U.S. jobs data came near enough to expectations to bolster bets the Federal Reserve will raise rates for the first time in nearly a decade this year.

The data showed 215,000 jobs were added in July, slightly below a Reuters poll of 223,000 jobs, but the unemployment rate held at a seven-year low of 5.3 percent and there were signs that wages were beginning to pick up.

U.S. stock futures extended earlier losses, dropping 0.2 percent on the day SPc1. The Dow Jones industrial average was set for its seventh day of losses - its worst run in four years.

The U.S. dollar jumped against a basket of other currencies .DXY, climbing 0.4 percent on the day to a four-month high of 98.271.

U.S. Treasury yields were flat at 2.23 percent as were European benchmark German yields.

European stocks .FTEU3 moved up slightly after the data, although the index remained down 0.3 percent on the day.

The prospect of higher ra

Payrolls in U.S. Climbed 215,000 in July in Broad-based Gain

Posted by Forexsq 66 days ago (http://www.bloomberg.com)

Employers added 215,000 jobs in July and the unemployment rate held at a seven-year low of 5.3 percent, signs of further progress in the U.S. labor market that’s keeping the Federal Reserve on the path toward raising interest rates as soon as next month.

The gain in payrolls last month followed a 231,000 advance in June that was bigger than previously estimated, a Labor Department report showed Friday in Washington. While the data also showed a pickup in hours worked, average hourly earnings climbed a less-than-forecast 2.1 percent from a year earlier, indicating little momentum in wage growth.

The persistent pace of hiring this year indicates companies are sanguine about prospects for demand in the face of a tempered global growth outlook. Better job security that leads to bigger wage gains could encourage consumers to spend more freely and provide more momentum for the economy.

“Trend job growth is rock solid,” said Ryan Sweet, a senior economist at Moody’s Analytics In

ISM and Manufacturing PMI leak for July

Posted by Forexsq 70 days ago (http://uk.businessinsider.com)
img ISM's latest manufacturing report for July leaked on Monday morning.

The reading came in at 52.7, below the consensus forecast of 53.5 that was also the prior month's print and a year-to-date high. A reading above 50 indicates expansion, and so despite the slowdown, US manufacturing is still in good shape.

The employment measure fell to 52.7 from 55.5. New orders increased slightly to 56.5 from 56.0. Production jumped to 56.0 from 54.0.

The report had been scheduled for release at 10:00 a.m. ET. After the numbers crossed the wires, the Institute for Supply Management published the report on their website.

A respondent in the survey for the report noted a "summer slow-down", and others bemoaned lower oil prices with the expectation that they'll fall further.

In a note to clients after the data, Capital Economics' Adam Collins wrote, "Looking ahead, the manufacturing sector will probably continue to struggle as the dollar has appreciated further recently and overseas dema

RBA Holds Rates, Omits Reference to Need for Currency Drop

Posted by Forexsq 70 days ago (http://www.bloomberg.com)
img Australia left its interest rates unchanged and omitted a reference to the need for the local dollar to fall further. The currency jumped more than 1 percent.

Central bank Governor Glenn Stevens and his board kept the cash rate at a record-low 2 percent, as predicted by markets and economists following reductions in May and February.

Stevens said in Tuesday’s statement the exchange rate “is adjusting to the significant declines in key commodity prices” after it fell through 73 U.S. cents in July. It is the first time in 18 months that he hasn’t signaled the currency was too high.

“It does look like they’ve watered down their jawboning of the currency,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada in Sydney. “If you draw a longer bow it kind of waters down their easing bias because part of the reason you have such a bias is to keep pressure on the currency.”

Australia has so far had little success in stimulating industries a

Gold prices will plunge to 350 dollar an ounce

Posted by Forexsq 73 days ago (http://money.cnn.com)
img Gold's big plunge may have only just begun.

A prominent gold forecaster predicts the yellow metal will drop to a mere $350 an ounce, a level unseen since 2003. It's dramatically lower than what most experts are currently calling for.

But Claude Erb's prediction might have merit. Back in 2012, Erb, a former commodities trader at TCW Group, co-authored a landmark research paper with Duke University professor Campbell Harvey that was early to predict gold's downfall. At the time, gold was fetching north of $1,600 an ounce. Now it's trading below $1,100.

The paper used historical analysis to show that if gold is an inflation hedge -- as many people believe -- then it's extremely expensive at current levels.

"Gold is no more or less volatile than stocks or anything else. It can be wildly overvalued, and it's very overvalued right now," Erb told CNNMoney.

Gold could crash more: Erb and Harvey's research suggests that gold's fair value is about $825 an ounce. That would repres

Fed Says Labor Market Improves as It Moves Toward Rate Rise

Posted by Forexsq 75 days ago (http://www.bloomberg.com)
img Federal Reserve policy makers said the labor market and housing have improved, moving closer to ending an unprecedented period of near-zero interest rates without providing a clear signal on the timing of liftoff.

“The labor market continued to improve, with solid job gains and declining unemployment,” the Federal Open Market Committee said in a statement Wednesday in Washington. It said that “underutilization of labor resources has diminished,” dropping the modifier “somewhat” to describe the change.

Chair Janet Yellen is guiding the Fed toward its first rate increase in almost a decade as the nation approaches full employment. She has said the Fed is likely to tighten this year if the economy continues to improve as she expects, with market speculation focused on a move as soon as September.

“The housing sector has shown additional improvement,” the Fed said. “Business fixed investment and net exports stayed soft.” It dropped language saying energy prices appeared to have s

Fed sees improving economy, jobs; September hike in view but not set

Posted by Forexsq 75 days ago (http://www.reuters.com)
img The U.S. economy and job market continue to strengthen, the Federal Reserve said on Wednesday, leaving the door open for a possible interest rate hike when central bank policymakers next meet in September.

Following a two-day policy meeting, Fed officials said they felt the economy had overcome a first-quarter slowdown and was "expanding moderately" despite a downturn in the energy sector and headwinds from overseas.

The central bank nodded in particular to "solid job gains" in recent months.

"On balance, a range of labor market indicators suggest that underutilization of labor resources has diminished since early this year," the Fed said in a policy statement that kept rates unchanged.

That language marks an upgrade in its view of labor conditions since its June meeting, when it said labor slack had "diminished somewhat."

The statement may strengthen expectations of a rate hike at the Fed's September meeting. The central bank has kept rates at a near-zero level since D

Crude Oil Falls Most in a Week

Posted by Forexsq 90 days ago (http://www.bloomberg.com)
img The nuclear accord reached in Vienna on Tuesday could eventually reshape global oil markets. After almost two years of talks, the holder of the world’s fourth-biggest crude reserves will benefit from an easing of international sanctions on exports in return for curbs on its nuclear program, according to an official involved in the talks.

How Much More Oil Can Iran Produce?

Iranian Oil Minister Bijan Namdar Zanganeh says the country can increase exports by 500,000 barrels a day as soon as sanctions are lifted, and then an additional 500,000 a day in the following six months. Iran produced an average of 2.8 million barrels a day this year.

Goldman Sachs Group Inc. says adding 500,000 barrels a day will take about a year because Iran must first demonstrate its compliance with the terms of the nuclear accord and revive aging wells. Further expansion will need foreign investment, BNP Paribas SA says. The country also has 30 million barrels stored on tankers that it could ship more

Jobs Report Disappoints, Participation Rate Falls to Lowest Since 1977

Posted by Forexsq 102 days ago (http://www.bloomberg.com)
img Households are feeling upbeat about employment prospects as more respondents than at any time since early 2008 said jobs were plentiful, a Conference Board report showed on Tuesday.

A separate report Friday from the Labor Department showed applications for unemployment benefits held below 300,000 for a 17th straight week. Jobless claims rose by 10,000 to 281,000 in the week ended June 27. The median forecast called for 270,000 applications.

The figures indicate corporate managers are keeping headcounts in line with stronger consumer demand while overseas markets remain feeble. At the same time, more moderate job gains may still be enough to reduce the unemployment rate, consistent with the Federal Reserve’s perceived timetable to raise borrowing costs by year-end.

“This is a softer report than people expected but it’s certainly not a game changer,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in Stamford, Connecticut, who projected a 225,000 gain.

Greek 'No' effect on Stocks and Forex market

Posted by Forexsq 98 days ago (http://www.reuters.com)
img Shares fell, the euro stumbled and yields on weaker euro zone economies' bonds rose after Greece overwhelmingly voted against conditions for a rescue package, but there was no rout and contagion was limited.

U.S. stock index futures ESc1 SPc1 indicated Wall Street would follow European and Asian share markets lower but there have been several worse days this year for markets vulnerable to events in Greece.

Analysts attributed the relatively muted reaction to expectations the European Central Bank would act to limit any damage. The ECB's governing council is holding a conference call on Monday to decide how long to keep Greek banks afloat.

"The market is, rightly or wrongly, taking a great deal of credence of the fact that the ECB has many more defense mechanisms in place than it did in 2011-12," said Andrew Milligan, head of global strategy at Standard Life Investments.

"Some of the measures we've seen already could be seen as a subtle signal by the ECB that it is ready to

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