Tag Archive: OIL

FX Daily, January 10: Yen Short Squeeze Extended

Sparked by fears that the BOJ took a step toward the monetary exit by reducing the amount of long-term bonds it is buying, there is an apparent scramble to cover previously sold yen positions. The dollar finished last week near JPY113.00. It fell to about JPY112.35 yesterday, near the 50% retracement of the greenback's bounce from the late-November lows near JPY110.85.

Read More »

Petro-Yuan? Really?

The launch of futures on Bitcoins was rushed so quickly through the regulatory channels that the anticipation was short-lived. And as the recent price action amply demonstrates, the existence of a derivative market has not tamed the digital token's volatility. It is still the early days, but Bitcoin futures do not look likely to change the world.

Read More »

The Economy Likes Its IP Less Lumpy

Industrial Production rose 3.4% year-over-year in November 2017, the highest growth rate in exactly three years. The increase was boosted by the aftermath of Harvey and Irma, leaving more doubt than optimism for where US industry is in 2017. For one thing, of that 3.4% growth rate, more than two-thirds was attributable to just two months.

Read More »

FX Daily, December 12: UK Front and Center, but Sterling is Laggard in Today’s Move Against the Dollar

The US dollar is trading with a lower bias against most of the major and emerging market currencies. The upside surprise in Sweden's inflation is helped the krona recover from its recent slide. It is the strongest of the majors, gaining 1.1% against the dollar and nearly as much against the euro, which is in a third of a cent range below $1.18.

Read More »

Industrial Production Still Reflating

Industrial Production benefited from a hurricane rebound in October 2017, rising 2.9% above October 2016. That is the highest growth rate in nearly three years going back to January 2015. With IP lagging behind the rest of the manufacturing turnaround, this may be the best growth rate the sector will experience. Production overall was still contracting all the way to November 2016, providing the index favorable base comparisons that won’t last past...

Read More »

Globally Synchronized Downside Risks

Oil prices were riding high after several weeks of steady, significant gains. It’s never really clear what it is that might actually move markets in the short run, whether for crude it was Saudi Arabia’s escalating activities or other geopolitical concerns. Behind those, the idea of “globally synchronized growth” that is supposedly occurring for the first time since before the Great “Recession” while it may not have pushed oil investors to buy...

Read More »

FX Weekly Preview: Thumbnail Sketch of the Week’s Big Events

Busiest week of Q4. Fed, BOJ, and BOE, only the last is expected to change policy. Flash EMU CPI and US jobs. Positive developments in Italy, less so in Spain.

Read More »

The Gold-Backed-Oil-Yuan Futures Contract Myth

On September 1, 2017, the Nikkei Asian Review published an article titled, “China sees new world order with oil benchmark backed by gold”, written by Damon Evans. Just below the headline in the introduction it states, “China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into gold in what analysts say could be a game-changer for the industry”. Not long after the Nikkei piece was released ‘the story’ was...

Read More »

FX Daily, October 05: Sterling and Aussie Weakness Featured in the Otherwise Becalmed FX Market

The US dollar is mostly little changed as the broad consolidation that has emerged this week continues. The two powerful forces that have emerged--expectation of a Fed hike at the end of the year and European political challenges--appear to have reached a tentative equilibrium.

Read More »

FX Daily, September 26: Weekend Election and North Korea Rhetoric Helps Greenback Remain Firm

The US dollar is firmer against most major currencies today. The implications the Jamaica coalition in Germany is understood to be less likely to support a new vision for Europe in the aftermath of Brexit and the Great Financial Crisis. The euro's low for the year was set at the very start near $1.0340. The first quarter or so was spent consolidating the gains in H2 16. It was trading below $1.06 in early April.

Read More »

Harvey’s Muted (Price) Impact On Oil

The impact of Hurricane Harvey on the Gulf energy region is becoming clear. There have been no surprises to date, even though the storm did considerable damage and shuttered or disrupted significant capacity. Most of that related to gasoline, which Americans have been feeling in pump prices.

Read More »

Moscow Rules (for ‘dollars’)

In Ian Fleming’s 1959 spy novel Goldfinger, he makes mention of the Moscow Rules. These were rules-of-thumb for clandestine agents working during the Cold War in the Soviet capital, a notoriously difficult assignment. Among the quips included in the catalog were, “everyone is potentially under opposition control” and “do not harass the opposition.” Fleming’s book added another, “Once is an accident. Twice is coincidence. Three times is an enemy...

Read More »

FX Daily, August 09: North Korea lets EUR/CHF Collapse

The bellicose rhetoric from the US and North Korean officials is the main driver today. We would qualify that assessment by noting that first, the market moves are rather modest, suggesting a low-level anxiety among investors. Second, pre-existing trends have mostly been extended. Turning to Asia first, the Korea's equity market fell 1.1%. The Kospi has fallen for the past two weeks (~2.2%).

Read More »

FX Daily, August 01: The Most the Dollar Can Hope for on Turn Around Tuesday is Consolidation

After taking a step lower in the North American session yesterday, the dollar is consolidating today. The euro is holding above $1.18, and the dollar held JPY110.00. Global equities are mostly higher, while bonds are mixed. Asia-Pacific yields were mostly higher, while European rates are a little lower. The US 10-year yield is flat just below 2.30%.

Read More »

Progress in St. Petersburg

Expectations going into the OPEC monitoring meeting in St. Petersburg were low. The OPEC agreement to reduce output appeared to be fraying. June output appeared to have increased in several countries, and private sector estimates suggest output rose further in July. Russia expressed reluctance to extend the agreement further.

Read More »

FX Daily, July 26: Quiet Fed Day without Yellen

By definition, the Federal Reserve Open Market Committee meeting is the highlight of the day. Without a press conference, and following last month's rate hike, there is practically no chance of a new policy initiative either on the balance sheet or the Fed funds target.

Read More »

Oil Update

OPEC meets on July 24. Nigeria and Libya may be pressured to cap output although they were exempt from quotas. US exports and refining appear to be the driving force behind the 13.8 mln barrel decline in inventories. Mexico has reportedly made two large oil finds.

Read More »

Retail Sales Conundrum

Retail sales were thoroughly disappointing in June. Whereas other accounts such as imports or durable goods had at least delivered a split decision between adjusted and unadjusted versions, for retail sales both views of them were ugly. Seasonally-adjusted first, spending last month was down for the second straight time. Worse than that, estimated sales were just barely more than in January.

Read More »

Wholesale: No Acceleration, No Liquidation

In the same way as durable goods orders and US imports, wholesale sales in May 2017 were up somewhat unadjusted but down for the third straight month according the seasonally-adjusted series. As with those other two, the difference is one of timing. In other words, combining the two sets, seasonal and not, we are left to interpret a possible recent slowing in activity.

Read More »

FX Daily, July 06: Stocks and Bonds Mostly Heavier, while Dollar Hovers Little Changed

The US dollar is narrowly mixed against the major currencies after being confined to tight ranges through the Asian session and European morning. Equities are nursing small losses, and interest rates are pushing higher. The yield on the 10-year German Bund reached 50 bp for the first time since early 2016. Oil prices have steadied after yesterday's slide.

Read More »