FOREX

Forex

Forex – The U.S. dollar edged higher against the yen and commodity currencies pared losses on Monday, after traders viewed a strike by Kuwaiti oil and gas workers as supportive of oil prices and anticipated low volatility this week. The dollar was last up 0.07 percent against the yen after slumping to a session low, which was near a 17-month low touched a week ago. The safe-haven yen had earlier rallied, while commodity currencies plunged, after a plan to cap oil production at current levels fell apart on Sunday when Saudi Arabia demanded that Iran join in at a meeting in Doha.

The U.S. dollar rose against the Euro on Wednesday on fears that comments from the European Central Bank on Thursday could hurt the European currency, while some riskier commodity currencies remained near multi-month highs on greater relief over China's economy. The Australian and Canadian dollars eased slightly from recent multi-month highs against the greenback, but still hovered not far from those levels on appetite for riskier assets. Analysts said growing reassurance about China's economic situation, following strong data on the world's second-biggest economy in recent weeks, has boosted sentiment. The Aussie and Canadian dollars, which are both commodity-linked currencies, were near recent highs despite lower oil prices Wednesday.

The Euro steadied on Friday after a volatile overnight session following the European Central Bank meeting as markets were caught between the ECB's steady stance for now and expectations of further stimulus down the road. The European currency was on track for a slight weekly gain against its U.S. counterpart, while the dollar index, which tracks the greenback against a basket of six major rivals, was poised for a modest loss. The index last stood at 94.53, down about 0.2 percent for the week. ECB President Mario Draghi said the central bank's policy of printing money and keeping borrowing costs at rock bottom was working, adding that interest rates would stay at current record lows for a long time.

 

INDICES

Indices

Indices - A dive in oil prices sent stock markets lower on Monday after producers meeting in Qatar failed to agree on a plan to curb global supply, quashing the more optimistic tone that had prevailed for much of the past week. Japan's Nikkei index led the way, tumbling more than 3 percent after a devastating earthquake in the southwest of the country, with signs from a summit in Washington that other Group of 20 governments oppose intervention to weaken the yen also playing a role. Losses in Hong Kong and Shanghai ranged around 1 percent and oil prices were down 3 percent. Still, the falls on European markets eased as morning trade progressed and Wall Street was set to open only a third of a percent lower, helped by a gain for Morgan Stanley after its profits sank but beat forecasts.

Stock markets stabilised on Wednesday as expectations of support from the European Central Bank offset a decline in the price of oil. Oil prices fell after market worries rescinded after Kuwaiti workers ended a three-day strike that had halved the nation's crude output. That revived the bearish mood brought last weekend when major producers failed to agree on a cut in output. Global stock markets initially fell, but the FTSEurofirst 300 index of top European shares recovered to edge into positive territory. U.S. equity futures also rose.

Asian shares slid from a 5 1/2-month high on Friday on disappointing earnings from U.S. blue chip companies, but Japanese shares surged after a media report about a possible Bank of Japan policy change weakened the yen. Japan's Nikkei erased earlier losses to end the day up 1.2 percent, reaching an 11-1/2 week high and extending the week's gains to 4.3 percent.

 

COMMODITIES

Commodities

Commodities - Gold steadied on Monday as the dollar fell against a basket of major currencies, world stock markets edged higher, and oil prices pared earlier losses that had been triggered by the failure by oil producers to agree on an output freeze. The U.S. Federal Reserve raised interest rates in December but has slowed its expected pace of subsequent increases in response to risks a slowdown in the global economy could be more severe than anticipated. Gold steadied on Wednesday as a firmer tone to the U.S. dollar held gains in check, though silver extended gains to an 11-month peak, boosted by technical momentum and perceptions it is undervalued versus gold. Gold fell more than 1 percent on Friday as the dollar advanced versus the yen and the Euro, putting the metal on track to post its second straight weekly loss, while silver was set for its third consecutive weekly rise. The dollar was up 2 percent against the yen on speculation the Bank of Japan was considering applying negative rates to its lending program for financial institutions, effectively starting to pay banks to borrow its cash. Goldman Sachs maintained its bearish view on gold and other commodities on Friday, and reiterated its recommendation to short gold.

Sugar futures on ICE rallied sharply for the second straight session on Monday, on chart-based buying and a lack of producer selling while all eyes focused on impeachment proceedings against top grower Brazil's president. Coffee futures also rose while cocoa jumped after a large trade encouraged buying, as the 19-market Thomson Reuters Core Commodity Index also rose. Sugar futures surged to a three-week high on Wednesday, creating a potentially bullish formation on fund and chart-based buying, amid a lack of producer selling as Brazilians wait to see if their president will be removed from office. Cocoa futures nudged up to a one-month high, as funds bought against a backdrop of tightening global supplies, while coffee prices also firmed. Cocoa futures on ICE rose to multi-month highs on Friday, after data showed bean processing in Asia rose and traders focused on expectations for lower output in West Africa, helping the New York market see its biggest weekly jump in 11 months. Sugar futures turned lower after reaching a three-week high on Friday, as buying momentum fell to the sidelines and top grower Brazil's currency weakened, though the sweetener finished its second straight week higher. Coffee prices extended the prior session's move lower.

 

ENERGY

Crude Oil

Crude Oil - Oil prices slid on Monday after a plan by major oil producers to freeze production was scuttled, but a Kuwaiti oil industry strike helped the market pare losses and settle off the day's lows. The strike crippled more than 60 percent of Kuwait's crude output, lending support to price benchmarks such as Brent and Dubai. Crude prices tumbled as much as 7 percent earlier on Monday after oil majors from the Organization of the Petroleum Exporting Countries and non-OPEC Russia failed to reach agreement on a plan to freeze output at a meeting in Doha, Qatar.

Oil prices rose 4 percent on Wednesday after a smaller-than-expected build in U.S. crude inventories offset glut worries stirred by the end of a Kuwaiti strike, and as oil bulls bet that major crude producers would meet again to try to curtail output. Moscow, however, denied media reports that Russia planned to host such a meeting; the previous Sunday, Russia and OPEC nations failed to reach an agreement on freezing production at a meeting in Doha, Qatar. The US EIA inventories figure showed a 2.08million barrel build in stockpiles vs a 3million forecast.

Oil prices rose on Friday and notched their third straight week of gains as market sentiment turned more upbeat amid signs a persistent global supply glut may be easing. Strong gasoline consumption in the United States, increasing signs of declining production around the world and oilfield outages have underpinned a return to investment in the sector. Brent futures ended the session up 1.3 percent per barrel, while U.S. crude oil settled up 1.3 percent a barrel. Both contracts jumped as much as 3 percent during the session. Brent has surged 4.5 percent this week and U.S. crude 8.4 percent as both benchmarks notched a third week of gains.

Natural Gas

Natural Gas – U.S. natural gas futures climbed on Monday as power generators burned more of the relatively cheap fuel despite forecasts for heating demand to decline over the next two weeks. To prevent stockpiles from hitting peak capacity levels at the end of the April-October injection season after utilities left record amounts of fuel in storage following a warm winter, analysts said prices will have to remain low this year to pressure producers to cut output and encourage power generators to burn even more gas instead of coal.

U.S. natural gas futures on Wednesday traded within a few cents of unchanged on steady forecasts for less heating demand than normal over the next two weeks. After prices soared nearly 8 percent on Tuesday to a 10-week high on technical buying, front-month gas futures on the New York Mercantile Exchange for May were down 0.96 percent per million British thermal units at 10:45 a.m. EDT (1445 GMT).

U.S. natural gas futures climbed over 3 percent on Friday to a 10-week high on rising power sector usage and production declines. With stockpiles at record highs after a warm winter, analysts said prices will have to remain low in 2016 to pressure producers to cut output and encourage power generators to continue burning gas instead of coal. Drilling for gas held steady during the week ended April 15, according to a report by oil services company Baker Hughes.

 

The information set forth herein was obtained from sources which we believe to be reliable, but its accuracy cannot be guaranteed. It is not intended to be an offer, or the solicitation of any offer, to buy or sell the products or instruments referred herein. Any person placing reliance on this commentary to undertake trading does so entirely at their own risk.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD steady below 1.0800 after US PCE meets expectations

EUR/USD steady below 1.0800 after US PCE meets expectations

EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips.  Fed Chair Jerome Powell set to speak ahead of the weekly close.

EUR/USD News

GBP/USD hovers around 1.2620 in dull trading

GBP/USD hovers around 1.2620 in dull trading

GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.

GBP/USD News

Gold price sits at all-time highs above $2,230

Gold price sits at all-time highs above $2,230

Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.

Gold News

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.

Read more

Key events in developed markets next week

Key events in developed markets next week

Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.

Read more

Majors

Cryptocurrencies

Signatures