Daily Market Update 29th September 2016
ECONOMIC DATA OF THE DAY
| Time | CY | Indicator | Forecast | Actual | Previous |
|---|---|---|---|---|---|
| TBD | TA | CBC Benchmark Interest Rate | 1.38% | -- | 1.38% |
| 15:55 | GE | Unemployment Change (000's) | -5k | -- | -7k |
| 15:55 | GE | Unemployment Claims Rate SA | 6.10% | -- | 6.10% |
| 20:00 | GE | CPI YoY | 0.60% | -- | 0.40% |
| 20:00 | GE | CPI MoM | 0.00% | -- | 0.00% |
| 20:30 | US | Initial Jobless Claims | 260k | -- | 252k |
| 20:30 | US | Continuing Claims | 2129k | -- | 2113k |
| 20:30 | US | GDP Annualized QoQ | 1.30% | -- | 1.10% |
SPEECHES
- 14:35 – JPY – Kuroda speaks at Security Association Conference
- 16:00 – EUR – Bank of Finland governor Liikanen briefing on monetary policy
- 20:00 – GBP – BOE’s Forbes on panel at conference in Frankfurt
- 20:20 – USD – Fed’s Lockhart speaks to the futures of Florida Forum
OVERNIGHT NEWS
- US:
- Durable Goods Orders dropped to 0.0% from a downwardly revised 3.6% (Exp. -1.5%). Durables Ex Transportation dropped to -0.4% (Exp. -0.5%). The data show that companies are now starting to contribute to the overall economic growth with a pick up in equipment orders. So far, only the consumer spending were driving the growth. The weakness in the headline number was largely attributable to a plunge in civilian aircraft orders, which fell by 22% in August, retracing from July’s strength, when orders in this category surged by 74%.
- OIL:
- OPEC agreed to a preliminary deal that will cut production to 32.5 million to 33 million barrels a day for the first time in eight years. Many details still have to be worked out. Targets for each country won't be set until the next meeting at the end of November. One thing's clear: Iran won't freeze output, Oil Minister Bijan Namdar Zanganeh said. The individual nation output limits will be decided at the next formal OPEC meeting in Vienna on November 30th. The invitation to participate in the production cut could also be extended to non-OPEC countries such as Russia.
- FED:
- Fed Chair Janet Yellen said in front of the House Financial Services Committee that the Fed Is focusing on reaching the 2% inflation target and not fixed timetable for raising rates but most FOMC members expect a rate increase this year and added:
- “We expect to see solid job growth continue, but we do need, if things continue on their current course, to gradually remove the accommodation that is there.”
- “Eventually continued job creation at that [recent] pace would cause the economy to overheat and would push the unemployment rate to levels lower than now,”
- the Fed is considering making to the annual bank stress tests. The tests would move to a more risk-sensitive, firm-specific approach that "would result in a significant aggregate increase in capital requirements” for the eight largest U.S. banks
FOREIGN EXCHANGE (INDICATIVE RATES)
| Currency | Last | % Change | Overnight Range |
|---|---|---|---|
| DXY | 95.43 | 0.00% | 95.37 - 95.74 |
| EURUSD | 1.1217 | 0.02% | 1.1182 - 1.1237 |
| USDJPY | 100.69 | 0.26% | 100.26 - 100.82 |
| AUDUSD | 0.7692 | 0.33% | 0.7645 - 0.7693 |
| GBPUSD | 1.3019 | -0.03% | 1.2980 - 1.3032 |
COMMODITIES (INDICATIVE RATES)
| Currency | Price USD | % Change | Overnight Range |
|---|---|---|---|
| Gold | 132.54 | -0.44% | 1318.06-1327.65 |
| Silver | 19.19 | 0.22% | 18.92-19.21 |
| Oil (BRENT) | 48.69 | 5.92% | 45.70-48.96 |
| Oil (WTI) | 47.05 | 5.33% | 44.35-47.45 |
COMMODITIES
Precious Metals: Gold prices slipped again, while Silver edged higher as holdings in ETFs backed by silver climbed to the highest since created a decade ago. The main support for Gold will be at the 100d MA at 1310, then 1300 before seeing a lot of stops.
Oil:Brent soared almost 6% after OPEC agreed to cap crude production for the first time in 8 years, catching many traders by surprise. Output to be cut by as much as 750k barrels from August levels with individual quotas to be confirmed at official Vienna meeting and Iran will not have to freeze production. EIA report showing a forth consecutive drop in stockpile further boosted oil prices.
FOREX NEWS
- U.S. stocks finally posted broad gains, pulled by OPEC's production agreement. The S&P 500 climbed 0.5% to 2,171.37 with Energy standing out to lead the march with 4.3% rise.
- Nike Inc. Was down by 3.8% after it reported an 8% jump in quarterly sales however slowing future orders raised concern its stock price.
- Tempur Sealy International Inc., a mattress company, dropped 22.4% after it lowered its 2016 guidance by around 5% as sales in the current quarter were weaker than expected.
- uropean stocks gained, attributed to a better performing banking sector, which was lifted as Deutsche Bank’ CEO seemed to comfort the market. The STOXX 6000 index gained 0.7% to 342.57. In London the FTSE 100 firmed by 0.6% to 6,849.38.
- Deutsche Bank recouped 2% after CEO John Cryan personally ruled out a possible capital call. In addition, the bank’s balance sheet received a boost after it sold its British insurance business Abbey Life for £935mln, which is estimated to boost the capital ratio by 10bps.
- Royal Bank of Scotland advanced 1% after the bank agreed to pay $1.1bln to settle claims that it sold toxic mortgage-backed securities to credit unions that later failed.
U.S. Stocks Rise as Crude Surges Amid OPEC Plan to Cut Output
Oil and gas producers in the S&P 500 Index posted the biggest jump since January as crude futures surged more than 5 percent. Equities had earlier swung between gains and losses as oil prices whipsawed amid optimism for an agreement and mixed data on stockpiles. The afternoon rally in energy overshadowed a 3.8 percent drop in Nike Inc. and AT&T Inc.’s 1.5 percent retreat that dragged down phone companies.
Read More at bloomberg.com
