Monthly Archives: October 2018

Dollar Mixed Ahead Of U.S. Weekly Jobless Claims

At 8:30 am ET Thursday, U.S. weekly jobless claims for the week ended October 6 are due. Ahead of the data, the greenback traded mixed against its major rivals. While the greenback rose against the franc, it dropped against the yen. Against the pound and the euro, it held steady.

The greenback was worth 112.53 against the yen, 0.9956 against the franc, 1.3100 against the pound and 1.1506 against the euro as of 8:25 am ET.

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UK Retail Sales Decline On Food Sales

UK retail sales dropped more-than-expected in September reflecting the biggest decline in food store sales in almost two years, figures from the Office for National Statistics revealed Thursday.

Retail sales including auto fuel fell 0.8 percent month-on-month in September, due mainly to a large decline of 1.5 percent in food stores, which was the largest food store sales fall since October 2015.

Economists had forecast retail sales to fall 0.4 percent offsetting August’s 0.4 percent rise. A similar bigger decline was last seen in March. At the same time, non-food store sales gained 0.1 percent.

Sales volume excluding auto fuel also dropped 0.8 percent on month, following a 0.5 percent rise in August. Economists had forecast a 0.4 percent fall for September.

On a yearly basis, overall retail sales volume growth slowed to 3 percent from 3.4 percent in August. Likewise, sales excluding auto fuel, grew at a slower pace of 3.2 percent versus 3.6 percent a month ago.

In three months to September, retail sales volume increased 1.2 percent from the previous three months.

ONS Head of Retail Sales Rhian Murphy said, “Retail continued to grow in the three months to September with jewellery shops and online stores seeing particularly strong sales.”

“This was despite a stark slowdown in food sales in September, following a bumper summer.”

Although September’s retail sales figures were weaker than expected, sales still rose strongly over third quarter as a whole, Ruth Gregory, an economist at Capital Economics, said.

And with sustained rises in real pay now in prospect, this should pave the way for a gradual recovery in consumer spending growth in the year ahead, Gregory added.

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Yen Slides After BoJ Kuroda’s Comments

The Japanese yen slipped against its most major counterparts in the European session on Thursday, after the Bank of Japan Governor Haruhiko Kuroda offered an upbeat view on Japanese economy and continued to back low rate strategy to attain inflation goal.

“Japan’s economy is expected to continue expanding moderately,” Kuroda said at meeting with regional branch managers.

Short- and long-term interest rates will be kept at their current “very low” levels for a longer period, he said, adding that the central bank would only make necessary policy adjustments to sustain the economy’s momentum to achieve the price target.

European shares were mixed amid a flurry of earnings and as the EU leaders decided to take more time to clinch a divorce deal at a crunch summit in Brussels.

Investors digested developments over Brexit talks, as Prime Minister Theresa May assured that the U.K. would work “intensively over the next days and weeks” to get a deal on separation.

Data from the Ministry of Finance showed that Japan posted a merchandise trade surplus of 139.6 billion yen in September.

That exceeded expectations for a deficit of 45.1 billion yen following the 444.6 billion yen shortfall in August.

Exports were down 1.2 percent on year, while imports advanced 7.0 percent.

The yen showed mixed trading against its major counterparts in the Asian session. While it fell against the greenback, it climbed against the euro, the franc and the pound.

The yen retreated to 147.75 against the pound and 113.46 against the franc, from its early highs of 147.09 and 112.93, respectively. On the downside, 150.00 and 115.00 are likely seen as the next support levels for the yen against the pound and the franc, respectively.

Having climbed to more than a 5-week high of 129.12 against the euro at 2:15 am ET, the yen reversed direction and eased to 129.73. The yen is likely to find support around the 131.00 level.

Data from Destatis showed that Germany’s wholesale prices rose at a slower pace in September.

Wholesale price inflation slowed to 3.5 percent from 3.8 percent in August.

The yen declined to an 8-day low of 80.45 versus the aussie, after rising to 80.00 at 7:00 pm ET. The yen is seen finding support around the 82.00 level.

The yen reversed from an early 2-day high of 73.56 against the kiwi, falling to 73.99. If the yen slides further, 82.00 is likely seen as its next support level.

On the flip side, the yen held steady at 112.46 against the greenback, after having recovered from an 8-day low of 112.73 hit at 8:45 pm ET. At yesterday’s close, the pair was worth 112.64.

The yen advanced to a 2-day high of 86.14 against the loonie from yesterday’s closing value of 86.50. The next possible resistance for the yen is seen around the 85.00 region.

Looking ahead, U.S. weekly jobless claims for the week ended October 6 and leading index for September are scheduled for release in the New York session.

At 12:15 pm ET, Federal Reserve Governor Randal Quarles speaks about the economic outlook at the Economic Club of New York luncheon.

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Gold Holds Steady Despite Strong Dollar

Gold prices held steady on Thursday, even as the dollar hit a one-week high on hawkish Fed minutes.

Spot gold was little changed at $1,223.65 an ounce while U.S. gold futures eased marginally to $1,226.70.

A sell-off in Asia added some appeal to gold, which is seemingly resuming its safe-haven status.

Asian markets ended mostly lower, with China’s Shanghai Composite index ending down nearly 3 percent, as core lending data disappointed and the yuan hit its weakest level in almost two years, testing the government’s ability to maintain financial stability amid slowing economic growth.

The U.S. Treasury Department has decided not to label China a currency manipulator, but Secretary Steven Mnuchin said that China’s lack of transparency over its currency and recent weakness in the yuan are of “particular concern” for the United States and “pose major challenges to achieving fairer and more balanced trade.”

Separately, the Trump administration moved to withdraw from an international treaty on postal rates in a move aimed at pressuring Beijing.

European stocks edged higher in cautious trade, while U.S stock futures point to a lower opening.

U.S. Treasury yields climbed back toward seven-year highs after minutes from the Federal Reserve’s September meeting indicated that the U.S. central bank is staying the course on rate hikes, despite Trump calling it the “biggest threat” to his presidency.

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Oil Extends Losses After Big Rise In Stockpiles

Oil prices fell on Thursday to extend losses from the previous session after data showed an unexpected rise in U.S. inventories.

Global benchmark Brent crude for December delivery was down 80 cents or 1.0 percent at $79.25, after having ended below the $80-a-barrel threshold for the first time in nearly a month on Wednesday.

U.S. West Texas Intermediate crude futures for November delivery were down 1.02 percent at $69.04 a barrel, after tumbling 3 percent in the previous session to settle below $70 for the first time in a month.

U.S. crude oil inventories rose by 6.5 million barrels last week, the U.S. Energy Information Administration (EIA) said in its weekly report on Wednesday.

That marked the fourth straight weekly build and was almost triple what analysts had forecast. In the previous week ending Oct. 5 also, there was a large build of 6.0 million barrels.

Gasoline stocks fell by 2.0 million barrels last week, compared to expectations for a draw of 1.07 million barrels, while distillate inventories dropped by 0.8 million barrels, compared to forecasts for a decrease of 1.3 million.

Analysts expect global oil demand to grow at a slower pace this year and next in the wake of ongoing trade dispute between the U.S. and China.

The material has been provided by InstaForex Company – www.instaforex.com

Portugal’s Producer Prices Rise At Steady Pace

Portugal’s producer prices increased at a steady pace in September, figures from Statistics Portugal showed Thursday.

Producer prices advanced 4.7 percent year-on-year in September, the same rate as seen in August.

Excluding volatile energy prices, producer prices gained 1.9 percent. Energy prices surged 15.7 percent.

Month-on-month, producer price inflation came in at 0.3 percent in September versus 0.2 percent in August. The same 0.3 percent was posted in September 2017.

In the third quarter, producer price inflation advanced to 4.6 percent from 2.9 percent a quarter ago.

The material has been provided by InstaForex Company – www.instaforex.com