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News shaping
the markets today
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Japan's consumer price inflation fell to 0.2% in August, from July’s 0.3%, lending support to the USD/JPY in forex trading this morning.
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Gold prices dropped to a one-week low on Thursday on strength in the US dollar and better-than-expected economic data.
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Initial jobless claims in the US declined to 860,000 in the week ending September 12, versus 893,000 in the prior period. However, the latest numbers were higher than the consensus view of 850,000 claims, which sent US stocks lower on Thursday.
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The Bank of England announced plans to hold interest rates at 0.1% and maintain its current asset-purchase programs. Concerns over the Brexit negotiations exerted pressure on the GBP/USD forex pair.
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The ADP reported that private companies in Canada had shed 205,400 jobs in August, which sent the CAD/USD to a one-week low in yesterday’s forex trading session.
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What’s happening: Crude oil closed higher on Thursday as Saudi Arabia stressed full compliance with output cuts.
What happened: Oversupply concerns seemed to be easing this week following a decline in US crude stockpiles and Hurricane Sally forcing offshore oil production and dozens of refineries to remain closed in the Gulf of Mexico region.
While making aggressive price cuts in a bid to gain market share, Saudi Arabia kept the pressure on OPEC+ members to remain compliant with production cuts.
Why it matters: The OPEC+ (Organization of the Petroleum Exporting Countries and its allies) held a meeting on Thursday to discuss their current output reduction commitments.
The group had pared output cuts to 7.7 million bpd (barrels per day) starting August, from record cuts of 9.7 million bpd. The group had warned members who were not complying with their quota limits to compensate for their increased production.
Saudi Arabia’s energy minister Prince Abdulaziz bin Salman, who is chairman of the JMMC (Joint Ministerial Monitoring Committee), stressed on the importance of full compliance with agreed production cuts.
The JMMC issued a recommendation to the OPEC to extend the compensation system (scheduled to expire in September) until December. Saudi Arabia’s energy minister later went on record to say that he had secured commitments from compliance laggards to compensate production cuts by the end of December.
A higher-than-expected decline in crude stockpiles also helped oil record gains yesterday.
WTI (West Texas Intermediate) crude for October delivery surged 2% to close at $40.97 per barrel on the NYMEX (New York Mercantile Exchange) on Thursday. US crude has surged more than 9% so far this week, rising above the $41 level.
November Brent crude jumped 2.6% to settle at $43.30 per barrel on ICE Futures Europe.
Domestic supplies of natural gas rose by 89 billion cubic feet in the week ending September 11, versus the consensus estimate of a rise of 77 billion cubic feet. October natural gas dipped 9.9% to settle at $2.042 per million British thermal units, following a 4% decline on Wednesday.
What to watch: The JMMC is scheduled to hold its monthly meeting on October 19, with the OPEC Conference and OPEC+ meeting set to take place on November 30 and December 1, respectively. Markets will keep an eye on news related to OPEC+ members complying with the production cuts, following another warning from the JMMC Chairman.
Investors also await Baker Hughes’s weekly report on crude oil rigs. Oil rigs in the US fell to 180 in the September 11 week, from 181 in the prior week.
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European stocks will be in focus today, ahead of the current account report from the region.
Context: European stocks closed lower on Thursday as markets reacted to updates from various central banks around the world.
Details: European markets begun the previous session lower as investors got a first chance to react to the Federal Reserve’s announcement of maintaining interest rates at zero till 2023.
On Thursday, the Bank of England kept interest rates unchanged, while maintaining its existing asset-purchase program. However, the bank warned that the outlook for the economy remained “uncertain” and that it is considering negative interest rates.
Meanwhile, the Bank of Japan maintained its monetary policy on Thursday.
The pan-European Stoxx 600 index fell 0.5%, with banking sector leading the decline on Thursday.
London’s FTSE 100 index slipped 0.47%, while the German DAX 30 fell 0.36% and the French CAC 40 recorded a 0.7% decline.
What to watch: Markets await current account data from the Eurozone. The current account surplus increased to €17.26 billion in June, versus €15 billion in the year-ago month.
Other Markets: US indices trading closed lower on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.47%, 0.84% and 1.27%, respectively.
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Support & Resistances
for Today
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| Technical Levels |
News Sentiment |
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EUR/USD - 1.1843 and 1.1849 |
Positive |
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WTI Crude Oil - 40.94 and 41.06 |
Negative |
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Natural Gas - 1.960 and 1.970 |
Negative |
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FTSE 100 – 6,054.89 and 6,067.39 |
Positive |
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German DAX 30- 13,213.85 and 13,241.10 |
Positive |
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Futures at 0400 (GMT)
| EUR/USD (1.1849, -0.01%) |
Dow ($27,745, -0.27%) |
Brent ($43.35, 0.1%) |
| GBP/USD (1.2948, -0.20%) |
S&P500 ($3,345, -0.19%) |
WTI ($40.99, 0.1%) |
| USD/JPY (104.85, 0.10%) |
Nasdaq ($11,084, 0.08%) |
Gold ($1,959, 0.5%) |
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Italy’s industrial new orders and current account, South Africa's SACCI business confidence index, Bank of Russia’s interest rate decision, Russia's unemployment rate, retail trade, real wages and gross domestic product, Canada’s retail sales and wholesale sales as well as the US current account, University of Michigan's consumer sentiment index and CB’s leading index.
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ADS Securities London Limited “ADSS” is an execution-only service provider. This material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or investment objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by ADSS that any particular investment, security, transaction or investment strategy is suitable for any specific person. To the extent that any content in this material is construed as investment research, you must note and accept that the content was not prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. This material may contain links to third party websites, and any content, or use of your personal data by any third party websites is not the responsibility of ADSS or any member of the ADSS Group.
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