Daily Market Updates & Trading Signals By Option Banque

[Option_Banque]

New Zealand Unemployment Plunges Unexpectedly

New Zealand employment unexpectedly fell for the first time in three years in the third quarter, pushing up the nation’s jobless rate and sending the currency lower.

Employment dropped 0.4 percent from the second quarter and the unemployment rate rose to 6 percent from 5.9 percent, Statistics New Zealand said Wednesday in Wellington. Economists had forecast a 0.4 percent increase in employment, according to the median estimate in a News survey.

Economic growth has weakened after a plunge in dairy prices curbed farm incomes and dented business confidence, while record immigration is keeping a lid on wages.

Reserve Bank Governor Graeme Wheeler last week kept the official cash rate at 2.75 percent after three reductions, but said further easing is likely to be required to return inflation to his 2 percent target midpoint next year.

The New Zealand dollar fell half a U.S. cent after the release and bought 66.62 cents at 1 p.m. in Wellington.

 

[Option_Banque]

BoJ Looks Concerned Over Plunging Oil Prices

The Bank of Japan board expressed worries that the recent drop in crude oil prices could delay 2% CPI and blamed firms for a slow rise in wages amid record profits, the minutes of the bank’s Oct. 6-7 policy meeting released Thursday showed.

The discussion came three weeks before the BoJ pushed back the timing for hitting its inflation target.

Many members believed the year-on-year rise in the CPI would accelerate as the base effect of last year’s plunge in crude oil prices dissipated and would reach around 2% “around the first half of fiscal 2016″ because the output gap and inflation expectations were “likely to improve steadily and increase.”

At the Oct. 6-7 meeting, the BoJ board decided by an 8 to 1 vote to leave the bank’s policy target unchanged, as largely expected, although the risk of a technical recession was growing amid slowing global and domestic demand.

 

[Option_Banque]

Crude Oil Jumps In Asia Ahead Of Rig Count Data

Crude oil prices rose on Friday in Asia with investors looking ahead to rig count data in the U.S.

On the New York Mercantile Exchange, WTI crude for December delivery rose 0.20% to $45.444 a barrel.

Investors turn to Friday’s weekly U.S. oil rig count from oil services firm Baker Hughes (N:BHI) for further indications on production trends throughout the nation. Last week, the firm reported that U.S. oil rigs fell by 16 over the previous week to 578, for its ninth consecutive weekly decline.

At its current level, the domestic rig count is at its lowest since June, 2010. Since August, drillers nationwide have taken nearly 100 oil rigs offline, providing further signals that production is about to fall sharply.

Overnight, U.S. crude futures fell steadily on Thursday extending losses from the previous session, as energy traders continued to digest a bearish supply report on nationwide inventory levels from the last week of October.

On the Intercontinental Exchange (ICE), Brent crude for December delivery wavered between $48.10 and $48.99 a barrel before closing at $48.05, down 0.52 or 1.05% on the day. North Brent Sea futures have also appreciated by roughly 1% in value over the last month.

Meanwhile, the spread between the international and U.S. domestic benchmarks of crude stood at $2.75, above Wednesday’s level of $2.30 at the close of trading.

 

[Option_Banque]

Japan Wages Rise For Seventh Straight Month

Regular wages in Japan rose for a seventh consecutive month as the government of Prime Minister Shinzo Abe presses businesses to boost salaries.

Base pay climbed 0.4 percent in September from a year earlier, the labor ministry said Monday. Overall labor cash earnings, which include overtime and special payments, increased by 0.6 percent and wages adjusted for inflation advanced 0.5 percent.

The central bank needs to see higher earnings so Japanese consumers can buy more to help sustain price gains in a nation that has been dogged by two decades of stagnation. Abe is depending on businesses to pour more of their profits into capital spending and salaries as he tries to expand by one-fifth an economy that has recently struggled to grow at all.

 

[Option_Banque]

Gold Bulls Gain Strength After China’s CPI News

Gold prices gained in Asia as consumer prices in China rose less than expected, setting the stage for further easing.

On the Comex division of the New York Mercantile Exchange, gold for December delivery rose 0.37% to $1,092.10 a troy ounce.

Silver for December delivery gained 0.57% to $14.495 a troy ounce.

Copper for December delivery fell 0.20% to $2.225 a pound.

In China, consumer prices for October rose 1.3% year-on-year, below the 1.5% gain expected, while producer prices eased 5.9%, less than the 5.9% fall seen.

Overnight, gold futures were relatively unchanged on Monday, hovering near three-month lows as investors continued to digest last week’s robust U.S. jobs report which strengthened hawkish arguments for a December interest rate hike from the Federal Reserve.

Investors continued to react to last week’s vigorous U.S. national employment report when the Department of Labor reported that nonfarm payrolls in October surged by 271,000, considerably above estimates of a 190,000 gain. The unemployment rate, also inched down to 5.0%, its lowest since April, 2008, while average hourly wages soared 0.4%, considerably above forecasts of a 0.2% increase.

 

[Option_Banque]

EUR/USD Surges After ECB Hints At Purchase Of Municipal Bonds

EUR/USD fell mildly on Wednesday before paring the losses on a choppy day of trading, amid reports that the European Central Bank may consider purchasing municipal bonds throughout the euro zone as a mechanism for spurring economic growth.

The currency pair traded between 1.0706 and 1.0774 before settling at 1.0742, up by 0.0018 or 0.17% on the session. It came one day after the euro tumbled to a six-month low against the dollar amid increasing likelihood that the Federal Reserve will raise short-term interest rates when it meets next in December. After nearly reaching 1.15 in mid-October, the euro has lost more than 5% against the dollar. EUR/USD likely gained support at 1.0519, the low from April 13 and was met with resistance at 1.1496, the high from Oct. 15.

On Wednesday morning, Reuters reported that the ECB is exploring the possibility of purchasing municipal bonds in the City of Paris and several cities in Germany in an effort to expand the scope of its €1.1 trillion quantitative easing program. After selling more than $75 billion in bonds in 2014, European cities and regions currently have nearly $500 billion in bonds in circulation, according to data obtained by Reuters. The ECB could approve further stimulus measures when its Governing Council meets next in early-December.

 

[Option_Banque]

Crude Oil Holds Range Ahead Of US Rig Count News

Crude oil prices ebbed between small gains and losses in Asia on Friday with investors noting bulging stockpiles in the U.S. as a long-term bearish signal.

Ahead on Friday comes U.S. rig count data from Baker Hughes (N:BHI) that will set the tone.

On the New York Mercantile Exchange, WTI crude for December delivery was nearly flat at $41.66 a barrel.

Overnight, U.S. crude futures fell sharply on Thursday, as a stronger than expected inventory build last week and bearish supply forecasts from OPEC sent prices crashing down to their lowest level since late-August.

On the Intercontinental Exchange (ICE), Brent crude for January delivery wavered between $45.29 and $47.07 a barrel, before closing at $45.21, down 1.40 or 3.00% on the day. North Sea Brent futures have also closed lower in six of the last seven trading days. Since surging above $53 a barrel on October 12, brent futures have tumbled by more than 13%.

On Thursday morning, the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Report that crude inventories nationwide increased by 4.2 million barrels for the week ending November 6. At 487.0 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years. While analysts only anticipated a slight build of 0.75 million barrels, investors anticipated a much sharper increase after the American Petroleum Institute reported a weekly gain of 6.3 million barrels on Tuesday evening.

Within the report, motor gas inventories decreased by 2.1 million barrels while distillate fuel inventories increased by 0.4 million last week. Meanwhile, crude production for the week increased by 25,000 barrels per day to 9.185 million. Crude output still remains considerably below its level from this spring when it surged above 9.6 million bpd to reach its highest level in more than 40 years.

The report was issued one day later than usual this week due to the Veterans Day holiday.

 

[Option_Banque]

Asian Stocks Plunge Amid US Rate Hike Speculations

Asian shares fell on Monday as investors increasingly think the Federal Reserve will hike rates in December and domestic conditions in China and Japan remain patchy and on concern of new strikes to follow the deadly weekend attacks in Paris.

The Nikkei 225 fell 0.97%, while the S&P/ASX 200 dropped 0.81% and the Shanghai Composite declined 0.46%.

In Japan, quarter-on-quarter third quarter GDP fell 0.2%, compared to an expected 0.1% drop, while the year-on-year pace slumped 0.8%, compared to a 0.2% drop seen.

Earlier in New Zealand, retail sales quarter-on-quarter in the third quarter rose 1.6%, beating an expected 1.3% gain.

In the week ahead, investors will be turning their attention to Wednesday’s minutes of the Fed’s latest policy meeting for fresh indications on the prospects of a December rate hike.

Market players will also be looking ahead to U.S. data on inflation, building permits and manufacturing activity for further clues on the strength of the economy.

On Monday, the European Central Bank President Mario Draghi is to speak at an event in Madrid. The U.S. is to release data on manufacturing activity in the New York region.

Last week, U.S. stocks were lower after the close on Friday, as losses in the Consumer Services, Technology and Consumer Goods sectors led shares lower.

At the close in NYSE, the Dow Jones Industrial Average lost 1.16%, while the S&P 500 index declined 1.12%, and the NASDAQ Composite index declined 1.54%.

 

[IGLive]

easyJet on fifth year of record profits

17 November 2015: Earnings at easyJet were in line with it’s own forecasts and are the fifth time in a row that it has seen record numbers. The company is celebrating 20 years of operation with a further push into the lucrative business market.

 

[Option_Banque]

Crude Oil Pulls Back Sharply After US Stockpiles Data

Crude prices rebounded strongly in Asia on Wednesday as industry data showed a drop in U.S. stockpiles last week.

On the New York Mercantile Exchange, WTI crude for December delivery traded up 0.95% to $41.05 a barrel.

The American Petroleum Institute said crude stocks last week fell by 482,000 barrels, the first drop in weeks. Separately, Wednesday’s government report could show an inventory build of 1.6 million barrels for the week ending on Nov. 13. Last week, U.S. supply levels increased for the seventh straight week pushing crude inventories near their highest levels in at least 80 years.

Overnight, crude futures fell sharply on Tuesday erasing most of their gains from the previous session, as energy traders shifted their focus away from the Paris terrorist attacks back to longstanding concerns related to the supply glut on global energy markets.

On the Intercontinental Exchange (ICE), Brent crude for January delivery wavered between $43.51 and $45.10 a barrel, before closing at $43.59, down 0.97 or 2.20% on the day. On Monday, North Sea brent futures fell to $43.15, their lowest level since Aug. 26, before rallying amid a flurry of French airstrikes in Syria.

 

[Option_Banque]

Yen Rallies After Positive Trade Balance Data

The yen gained in Asia on Thursday as the the trade balance swung into positive territory and investors looked ahead to the Bank of Japan.

USD/JPY changed hands at 123.51, down 0.10%, while AUD/USD traded at 0.7120, up 0.15%.

In Japan, the trade balance widened to a surplus of ¥112 billion in October, the first positive result in seven months.

Imports fell 13.4% year-on-year, while exports declined 2.1%.

The Bank of Japan will release its latest monetary policy views at 0330 GMT followed by a 0630 GMT press conference by Governor Haruhiko Kuroda. The central bank is expected to hold policy steady on asset buying, but may highlight risks to meeting its 2% sustained inflation target.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.02% at 99.65.

Overnight, the dollar held steady at seven-month highs against the other major currencies on Tuesday, after the release of mixed U.S. housing sector data, as hopes that the Federal Reserve will raise interest rates at its meeting next month continued to support the greenback.

The minutes of the latest Federal Open Market Committee meeting showed Wednesday broad support for the decision to include a reference to the next meeting in the statement, though members generally agreed it was prudent to wait to raise rates until it had more information.

A trio of policymakers from the Federal Reserve sent further indications that the U.S. Central Bank will raise short-term interest rates when it convenes next at a meeting in mid-December.

Appearing on a panel alongside New York Fed president William Dudley and Cleveland Fed president Loretta Mester, Atlanta Fed president Dennis Lockhart indicated that disruptions in the global financial markets have subsided enough for the Fed to strongly consider a rate hike in December. The Fed’s benchmark
Federal Funds Rate has remained at its current level between zero and 0.25% for nearly seven years since December, 2008.

 

[Option_Banque]

Gold Rises In Asia Amid Political Risk

Gold prices gained in Asia on Friday with investors seeing some support on political risk, but an expected Federal Reserve rate hike next month weights.

On the Comex division of the New York Mercantile Exchange, gold for December delivery traded up 0.32% to $1,081.30 a troy ounce.

Silver for December delivery gained 0.06% to $14.230 a troy ounce. Copper for December delivery rose 0.18% to $2.076 a pound.

Gold futures surged by more than 1% on Thursday amid a weaker dollar, as investors covered short positions one day after the precious metal fell to fresh five-year lows.

Thursday’s rally halted an extended skid where gold tumbled approximately nearly 10% since peaking above $1,185 an ounce in mid-October. On Wednesday, gold slipped below $1,065 after the minutes from the Federal Open Market Committee’s October meeting provided further indications that the U.S. central bank could raise short-term interest rates when it meets again next month.

Last week, initial jobless claims in the U.S. fell by 5,000 to 271,000, in line with consensus analysts’ forecasts of 270,000 claims for the week ending on Nov. 14. At 270,750, the four-week average is up by 7,500 versus the same reading from October. Gold has been in freefall since a robust U.S. jobs report for October provided the hawks on the Federal Reserve with ammunition for a December rate hike.

 

[Option_Banque]

Commodities Start The Week On Downward Trajectory

Commodities started the week on a downward trajectory, with oil and industrial metals retreating with gold as the dollar cemented its gains. Materials shares led losses across Asia, while bonds in the region fell.

Crude extended its drop below $42 a barrel and gold slid a second day as comments from Federal Reserve officials about the prospect of a December interest-rate hike bolstered the greenback.

Copper touched the lowest level since 2009, and BHP Billiton Ltd. shares were the biggest drag on a index of Asian commodity producers. Guotai Junan International Holdings Ltd. plunged in Hong Kong after the brokerage said its chairman can’t be contacted. Australian 10-year bond yields rose to a one-week high.

The kiwi dollar slipped 0.7 percent to 65.21 U.S. cents. ASB Bank Ltd. altered their forecast for New Zealand’s benchmark rate, predicting key borrowing costs will be reduced to 2 percent by August next year. The bank previously expected the official cash rate would fall to 2.5 percent and then remain on hold.

Australia’s dollar also retreated, losing 0.7 percent. The Korean won weakened 0.4 percent, while the Malaysian ringgit was down 0.5 percent.

The euro slipped a second day, dropping 0.3 percent to $1.0614 following Friday’s 0.8 percent slide. A purchasing managers’ index of euro-zone factories due Monday will probably come in unchanged at 52.3 for November, according to the median of economists’ estimates compiled by Bloomberg. A similar measure for Germany is forecast to drop to 52 from 52.1, still above the 50 threshold between expansion and contraction.

 

[Option_Banque]

Gold Steady As Investors Look Cautious Ahead Of Fed Meeting

Gold held mostly steady in Asia on Tuesday with investors set for volatility ahead of the Federal Reserve’s December meeting.

On the Comex division of the New York Mercantile Exchange, gold for December delivery traded between small gains and losses at around $$1,068.40 a troy ounce.

Silver for December delivery was quoted flat at $14.085 a troy ounce. Copper for March delivery rose 0.27% to $2.021 a pound.

Gold dropped considerably to retreat to near five-and-a-half year lows, as the Federal Reserve spooked markets by holding an unscheduled meeting on Monday mornings to discuss the possibility of raising a key rate charged to commercial banks on loans.

On Monday morning, the Federal Reserve Board of Governors scheduled a closed-door meeting, held under expedited procedures, to review the discount rates charged by its regional banks.

The discount rate is the interest rate charged to commercial banks on loans they receive from their regional Federal Reserve Bank lending facilities, also known as the discount window. When the Fed increases the discount rate, it makes the borrowing costs for banks more expensive, decreasing the money supply in the system.

The discount rate differs from the Federal Funds Rate, which is the rate banks lend to one another on overnight loans for funds maintained at the Federal Reserve. In February, 2010, the Fed increased the spread between the discount rate and the top of the target range of the Federal Funds Rate to 50 basis points. It came nearly two years after the Fed reduced the spread to 25 points in March, 2008, in an effort to bolster liquidity.

 

[Option_Banque]

Yen Holds Range As BoJ Meeting Minutes Looms

The yen held steady ahead of central bank board meeting minutes for last month and corporate service prices with investors closely monitoring events in the Middle East after Turkey shot down a Russian jet fighter overnight.

USD/JPY was flat at 122.52, while AUD/USD changed hands at 0.7271, up 0.21%.

In Japan come the minutes of the October policy meeting as well as the corporate services price index for October, seen up 0.6% year-on-year. In Australia, third quarter construction work done is due with a fall of 2.1% seen quarter-on-quarter.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.01% to 99.68.

Overnight, the dollar trimmed losses against the other major currencies on Tuesday, despite the release of a weak U.S. consumer confidence report, as data showing that the U.S. economy grew more than initially estimated in the third quarter supported the greenback.

The U.S. Conference Board said its index of consumer confidence sank to a 12-month low of 90.4 this month from a reading of 99.1 in October, whose figure was revised from a previously reported 97.6. Analysts expected the index to rise to 99.5 in November.

The report came shortly after the U.S. Commerce Department said gross domestic product grew at an annual rate of 2.1% in the three months to September, in line with expectations.

Preliminary data initially pegged U.S. growth at 1.5% in the third quarter. The U.S. economy grew 3.9% in the second quarter. The upbeat growth data added to expectations that the Federal Reserve is on track to raise interest rates next month.

 

[Option_Banque]

AUD/USD Slides Down After Worse Than Expected Capital Spending

The Australian dollar fell on Thursday in Asia after downbeat capital spending data for privaet new capital.

AUD/USD traded at 0.7233, down 0.26%, while NZD/USD changed hands at 0.6584, up 0.09%, reversing an earlier decline after trade data. USD/JPY traded at 122.60, down 0.12%.

In Australia capital expenditure data for the third quarter with private new capital expenditure plunged 9.2%, compared to a 3.0% drop seen.

Earlier, in New Zealand, the trade balance for October showed a deficit of NZ$963 million month-on-month and NZ$3.24 billion year-on-year, both slightly better than expected.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.02% to 99.81.

Overnight, the U.S. dollar rallied to a fresh eight-month high against a basket of six other major currencies on Wednesday, after a deluge of mostly upbeat U.S. economic data reinforced the case for a Fed rate hike next month.

The U.S. Commerce Department reported on Wednesday that new home sales rose by 10.7% to 495,000 units last month.

The report came shortly after the U.S. Department of Labor said first time jobless claims declined by 12,000 last week to 260,000 from the previous week’s revised total of 272,000. Analysts expected jobless claims to fall by 2,000 last week.

A separate report showed that durable goods orders jumped 3.0% in October, easily surpassing forecasts for 1.5%. Core durable goods orders, excluding volatile transportation items, rose 0.5%, beating expectations for an increase of 0.3%.

The upbeat data added to already growing expectations the Federal Reserve will raise rates for the first time in nearly a decade at its December 15-16 meeting.

 

[Option_Banque]

Gold Rises In Low Liquidity Trading On Thanksgiving Day

Gold ticked higher in Asia on Friday as investors awaited further cues from the U.S. where markets were shut overnight for Thanksgiving.

Gold for December delivery on the Comex division of the New York Mercantile Exchange rose 0.09% to $1,071.00 a troy ounce.

Silver futures for December delivery fell 0.11% to $14.230 a troy ounce.

Elsewhere in metals trading, copper dropped 0.14% to $2.087 a pound after surging on Thursday, along with other base metals such as nickel and zinc, as China regulators were said to consider a probe into metal short-selling in the local market.

Prices received another boost amid reports that Chinese smelters are planning a meeting to consider taking action against falling prices.

Copper is down more than 10% so far this month as expectations of higher interest rates in the U.S. and slower global economic growth, especially in China, weighed.

Overnight, gold prices were little changed on Thursday, as trading conditions remained thin with markets in the U.S. closed for the Thanksgiving Day holiday

Trade volumes were expected to remain light on Thursday, with Comex floor trading scheduled to remain closed for Thanksgiving. An abbreviated session was slated for Friday.

On Wednesday, prices shed $3.80, or 0.35%, after upbeat U.S. economic data reinforced expectations for a Fed rate hike next month.

Gold futures are down more than 6% so far in November amid expectations for a December liftoff in U.S. interest rates. Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

 

[Option_Banque]

AUD/USD Slides Down Amid Release Of Mixed Economic Data

The Aussie fell in Asia on Monday after mixed data on the state of demand in the economy, though a slightly upbeat signal was seen in private sector credit.

AUD/USD traded at 0.7175, down 0.22%, while USD/JPY changed hands at 122.78, down 0.02%, after strong retail sales offset weaker industrial output.

Australia’s business inventories for the third quarter, rose 0.1% as expected month-on-month, while company gross operating profits gained 1.3%, better than the 1.0% seen quarter-on-quarter, and housing credit for October rose 0.6% as expected and private sector credit rose 0.7%, better than the 0.6% month-on-month gain seen.

Also in Australia, the MI inflation gauge showed a reading of 0.1%.

Earlier, in Japan, industrial production for October rose 1.4% month-on-month, below the 1.9% gain seen, while retail sales jumped 1.8%, well above the 0.8% year-on-year increase expected.

New Zealand business confidence for November compiled by ANZ Bank came in at 14.6%, down from the 15% seen, but well above the 10.5% in October.

In the week ahead, investors will focus on Friday’s U.S. nonfarm payrolls report for November, the last jobs report before the Federal Reserve decides on interest rates at its December 15-16 meeting.

 

[Option_Banque]

AUD/USD Plunges Despite Favorable Growth Data

The Aussie dipped on Wednesday despite upbeat GDP data as expectations for a Federal Reserve rate hike grew.

The Aussie fell 0.10% to 0.7315 in an otherwise light regional data day, while USD/JPY changed hands at 122.88, up 0.01%.

In Australia, GDP data for the third quarter showed a 0.9% gain, beating an 0.8% increase seen quarter-on-quarter and putting the annual pace at 2.5%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.02% to 99.89.

Overnight, the dollar pushed slightly lower against the other major currencies on Tuesday, after data showed that U.S. |manufacturing activity entered contraction territory last month, but hopes for a December rate hike by the Federal Reserve continued to support the greenback.

The Institute of Supply Management reported on Tuesday that its manufacturing PMI fell to a six-year low of 48.6 in November from 50.1 the previous month, confounding expectations for a rise to 50.5. But speculation that the Fed will raise interest rates at its December 15-16 meeting continued to lend broad support to the greenback.

Investors were eyeing a string of U.S. economic reports this week, including nonfarm payrolls, for further indications on the strength of the economy, as the Fed has said that any decision on interest rates will depend on data.

 

[Option_Banque]

USD/JPY Hits Weekly High At 123.35 Amid US Job Data

The USD/JPY pair advanced to its highest this week, reaching 123.35 on the back of strong US employment data, as the ADP survey showed that the private sector added 217K new jobs during November, beating expectations of a 190K advance.

The pair holds to its gains ahead of the US opening, and the 1 hour chart shows that the price is well above its 100 and 200 SMAs, whilst the technical indicators have resumed their advances and head sharply higher near overbought territory, all of which favors additional gains on a break above 123.40, the immediate resistance.

In the 4 hours chart, the technical outlook is also bullish, as the technical indicators extend their bounce further into positive territory.

Support levels: 122.60 122.20 121.70

Resistance levels: 123.40 123.75 124.40