Crude oil futures were slightly higher Monday morning ahead of OPEC's meeting in Vienna. The cartel is expected to discuss its supply quota plan with Russia. "Given rising OPEC production over recent months, there will be some concerns by member countries over slipping compliance," analysts at ING Bank wrote in a note Monday morning. WTI crude oil was up 10 cents at $48.47 a barrel. The Chicago Fed National Activity Index for July will be published at 8.30 am ET. Economists are looking for growth consensus of 0.22, up from 0.13 in the previous period. Six-month Treasury bills auction will be at 11.30 am ET.
BRAZIL: Interest Rate Forecast For 2017 Kept Unchanged At 7.50% Per Year
Economists polled by the Brazilian central bank kept unchanged their estimates for the country's benchmark interest rate (Selic) by year-end and for 2018 at 7.50%, both for the second week in a row. Meanwhile, average interest rate estimates for 2017 remained at 9.91%. For 2018, the forecast for the average interest was lowered for the fourth week in a row, to 7.30%, from 7.41% last week. In July, the Brazilian central bank's Monetary Policy Committee (Copom) cut the country's benchmark interest rate to 9.25%, from 10.25%, in line with market expectations, and reduced its forecasts for inflation in 2017 and 2018. The interest rate cut announcement came after Brazil posted in June its first monthly deflation in eleven years, and also the strongest month-on-month price decrease since the introduction of the country's current currency, the real, in the 1990s. Also, the Brazilian central bank monetary policy committee believes that in its next meeting it could cut Selic by one percentage point again in September if economic conditions allow such decision, according to the minutes of the most recent meeting.
Crude oil futures slipped Monday as OPEC gathered in Vienna to discuss their supply quota plan with Russia. Saudi Arabia is trying to cajole smaller cartel members to limit production in an effort to re-balance the global oil market. OPEC oil supply is set to fall by 419,000 barrels per day (bpd) this month, a company that tracks OPEC shipments said today. Sept. WTI oil was down $1.14, or about 2.4%, to settle at $47.37/bbl. Traders are looking forward to comments from Federal Reserve Chair Janet Yellen at the Fed's economic policy symposium in Jackson Hole, Wyoming, on Friday. They will keep an eye on her remarks for clues about the outlook for monetary policy.
Japan's supermarket sales remained flat in July, the Japan Chain Stores Association reported Tuesday. Supermarket sales showed nil growth in July. Before store adjustment, supermarket sales slid 0.1 percent. On a monthly basis, supermarket sales advanced 6.2 percent in July.
Japan Manufacturing PMI Climbs To 52.8 In August - Nikkei
The manufacturing sector in Japan continued to expand in August, and at a faster pace, the latest survey from Nikkei revealed on Wednesday with a Manufacturing PMI score of 52.8. That's up from 52.1 in July, and it moves farther above the boom-or-bust line of 50 that separates expansion from contraction. Individually, output, new orders, new export orders, employment, input prices and stocks of purchase all expanded at an accelerated rate. Future expectations remained positive, although the optimism was weaker.
Malaysia's consumer price inflation eased at a faster-than-expected pace in July, figures from the Department of Statistics showed Wednesday. The consumer price index rose 3.2 percent year-over-year in July, slower than the 3.6 percent climb in June. Meanwhile, economists had expected the inflation to moderate to 3.4 percent. Transport costs grew notably by 7.7 percent annually in July and prices of food and non-alcoholic beverages increased by 4.2 percent. In contrast, clothing and footwear prices dropped 0.4 percent. On a monthly basis, consumer prices edged down 0.1 percent from June, when it decreased by 0.2 percent.
Crude oil prices rose Wednesday after the government said crude oil prices dropped for the eighth consecutive week. U.S. crude-oil inventories were down 3.3 million barrels last week, the Energy Information Administration reported. That's in line with yesterday's report from the American Petroleum Institute. Gasoline supplies fell by 1.2 million barrels. WTI light sweet crude oil was up 47 cents at $48.20 a barrel. In economic news, the IHS Markit flash manufacturing purchasing managers index fell to 52.5 from 53.3 in July, while the services PMI rose to a 28-month high of 56.9, up from 54.7 in July.
Japan's leading index improved less than initially estimated in June, latest figures from the Cabinet Office showed Thursday. The leading index, which measures the future economic activity, climbed to 105.9 in June from 104.7 in May. The reading for June was revised down from 106.3. However, the latest score was the strongest since June 2015, when it marked 106.2. Meanwhile, the coincident index that reflects the current economic activity rose to 117.1 in June from 115.8 in the prior month. The flash score for June was 117.2. The lagging index also improved from 116.5 in May to 117.4 in June.
Oil prices were flat in early trade, retaining majority of their gains from the prior session following another reported decline in U.S. crude inventories, which is seen as an indication of a tighter market. U.S. WTI crude futures traded at $48.31 per barrel, falling by 10 cents. Meanwhile, Brent crude futures traded at $52.48 per barrel, edging down by 9 cents from their last settlement. According to traders, the ongoing declines in the U.S. commercial crude storage levels were an indication of a gradually tightening market, although another increase in output capped gains. ANZ bank said that another solid drawdown in U.S. crude oil stockpiles should result in oil prices being well supported. However, it noted that there was a tinge of cautiousness as U.S. oil production continue to escalate. Production of crude in the U.S. reached 9.53 million bpd in the previous week, its peak level since July 2015 and 13 percent higher than their recent trough in 2016. Nonetheless, U.S. crude and gasoline stocks fell last week, according to the EIA. Crude inventories slid by 3.3 million barrels in the week ending August 18 to 463.17 million barrels, falling 13.5 percent from their peak levels in March.
Ichimoku indicator analysis of USDX for August 24, 2017
The US dollar index got rejected as expected after back testing the broken channel and cloud resistance. I expect the dollar index to push lower towards 91.60 over the coming weeks.
Show full picture Red lines - bearish channel The dollar index is trading below the 4 hour Kumo. Yesterday we back tested the broken channel and the Kumo cloud. The rejection is a bearish sign. Support is at 93.10 and the next one at 92.90. Resistance is found at 93.40 and the next one at 93.55.
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