2024-01-31 23:28

Copyrighted Image by: Reuters. By Ketki Saxena Investing.com – The Canadian dollar weakened against its US counterpart today, hit by risk-off sentiment after Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) earnings disappointed, and following a less-dovish-than-hoped-for Fed. A rate decision from the US Federal Reserve was the main driver of action for the USDCAD pair today, overshadowing a better than expected Canadian GDP print. . The Federal Reserve held its benchmark rate steady in a range of 5.25% to 5.50%, as had been widely expected. However, in its monetary policy statement it signalled it would not cut rates “until it has gained greater confidence that inflation is moving sustainably toward 2%”, fanning risk aversion and helping boost the USD. Odds of a rate cut in March dropped to roughly 55% following the announcement - compared to nearly 80% expectations for a March rate cut, which peaked earlier in the month. Meanwhile, the Canadian November GDP came in at 0.2% month over month vs. the forecast of 0.1%. Preliminary estimates showing annualized growth of 1.2% in the fourth quarter, helping the Canadian economy avoid a technical recession in the second half of 2023. However, analysts at Monex Canada note that today’s upside surprise belies further weakness in the Canadian economy. They write that “any expansion was likely modest, and forward-looking indicators suggest that this strength should fade over coming months. “The output gap is set to remain negative and should continue to weigh on inflation too, which in our view keeps the BoC on track to cut rates in April.” Looking ahead for the pair USD/CAD Monex Canada analysts “continue to look for USDCAD to trade higher as the underlying weakness in economic growth becomes apparent once again… loonie strength is likely to prove temporary as a consequence.” https://www.investing.com/news/forex-news/canadian-dollar-weakens-as-fed-decision-overshadows-domestic-gdp-data-3289080

2024-01-31 14:15

Copyrighted Image by: Reuters. Investing.com -- Oil prices settled lower Wednesday, following an unexpected build in U.S. crude inventories, but snapped a three-month losing streak as a cocktail of geopolitical tensions kept global crude supply risks elevated. By 14:30 ET (19.30 GMT), the U.S. crude futures settled 2.5% lower at $75.85 a barrel, though was up 5.9% on the month, while the Brent contract dropped 1.4% to $81.71 a barrel, though added 6.1% in January. U.S. crude inventories spring upside surprise as output rebound Inventories of U.S. crude unexpectedly rose by 1.23M barrels for the week ended Jan. 29, confounding expectations for a draw of 217,000 barrels, according to Wednesday data from the Energy Information Administration. The surprise build in crude stockpiles followed a rebound in U.S. production following weather-related disruptions. Crude oil production averaged 13.3 million barrels per da during the week ending Jan. 26, up by 700,000 barrels per day from the previous week, the EIA said. Gasoline inventories, one of the products that crude is refined into, increased by roughly 1.16M barrels against expectations of a build of 1.48M barrels while distillate stockpiles unexpectedly fell by more than expected 2.5M barrels, compared to expectations for a draw of 425,000 barrels. Chinese manufacturing activity disappoints Manufacturing activity in China, the world's second-largest economy, contracted for a fourth straight month in January, in the first official snapshot of how this crucial market–China is the biggest importer of oil in the world–has started the new year. The official purchasing managers' index rose to 49.2 in January from 49.0 in December, an improvement but still below the 50-mark that separates growth from contraction. A quick return to above-trend economic growth in China was behind the bullish forecasts of oil demand growth for 2024 from both the International Energy Agency and the Organization of Petroleum Exporting Countries earlier this month. The International Monetary Fund on Tuesday lifted China's growth forecast this year to 4.6% from 4.2% in October, but there must still be doubt about this recovery given a property downturn, local government debt risks, deflationary pressures and weak global demand. Elsewhere, the eurozone barely registered any growth in the fourth quarter, while Germany, the dominant economy in the region, looks set to record a technical recession in the first quarter of 2024. U.S.’s Middle East response awaited That said, losses are relatively minor and the market as a whole is on course to register a first monthly gain since September as flaring tensions in the Middle East heightened supply concerns. The U.S. has vowed to take "all necessary actions" to defend its troops following a deadly drone attack in Jordan. The Biden administration has accused Iran of backing the militants who committed the attack, and while Tehran has denied involvement, Iranian oil exports are potentially vulnerable via potentially greater enforcement of sanctions. “The market is trading cautiously ahead of the potential U.S. response to the recent assault in Jordan and how Iran will react in turn,” analysts at ING said, in a note. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVEST2024 to get a limited time discount on our Pro+ subscription plans. Click here to find out more, and don't forget to use the discount code when checking out! https://www.investing.com/news/commodities-news/crude-oil-falls-on-weak-chinese-manufacturing-data-fed-decision-eyed-3288426

2024-01-31 09:47

Copyrighted Image by: Reuters. Investing.com - The U.S. dollar edged higher in early European trade Wednesday, on course for its biggest monthly gain since September, while the euro retreated after weak inflation data. At 04:45 ET (09:45 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 103.352, on track to register gains of over 2% this month. Dollar on course for strong monthly gains The dollar has been in demand this month as traders dialled back expectations on when the Federal Reserve will start cutting interest rates given strong U.S. economic data and pushback from central bankers. The greenback has also been helped by the escalating geopolitical tensions in the Middle East, which have weighed on risk sentiment amid fears of a wider regional conflict. The U.S. central bank is widely expected to keep interest rates unchanged, and thus the focus is likely to be on Fed Chair Jerome Powell’s post meeting press conference to see if he flags cuts are coming. “Given U.S. data releases – most recently the December JOLTS data showing job openings expanding – there seems little reason for tonight’s FOMC communication to push the market to price any more than the current 130bp of rate cuts for this year,” said analysts at ING, in a note. “This should be a neutral/positive development for the dollar.” There is more labor data to study Wednesday, in the form of the ADP private payrolls for January, ahead of Thursday’s weekly initial jobless claims and then Friday’s widely-watched monthly payrolls report. Euro retreats on soft inflation data In Europe, EUR/USD traded 0.1% lower at 1.0829, after regional German and French consumer prices data pointed to falling inflation, increasing the possibility of the European Central Bank cutting interest rates earlier than expected. French CPI fell 0.2% on the month in January, resulting in the annual rate falling to 3.1% from 3.7% in December. The German CPI release is due later in the session, but the individual states have started reporting their figures. They have all indicated sharp falls in the annual figures, suggesting inflation is on the retreat in the eurozone’s dominant economy. At the same time, German retail sales slumped 1.6% on the month in December as consumers remained under pressure. These figures “keep the door open for an April ECB rate cut,” ING added. “That is not our house view, but does mean that EUR/USD should end the week heading into Friday’s U.S. jobs data on the soft side.” GBP/USD traded 0.1% lower at 1.2683 ahead of the Bank of England's policy meeting on Thursday. British house prices rose this month more than expected, with Nationwide Building Society stating house prices in January increased by 0.7% from the month before after being flat in December. Yen set to hefty monthly drop In Asia, USD/JPY fell 0.1% to 147.43, with the yen gaining slightly but set to drop almost 5% this month, heading for its largest monthly drop since June 2022 as the Bank of Japan maintained its ultra-easy monetary policy. USD/CNY edged higher to 7.1759, with the yuan set to drop around 1% for the month, with China's manufacturing activity in January contracting for a fourth straight month. https://www.investing.com/news/forex-news/dollar-set-for-hefty-monthly-gain-ahead-of-fed-decision-3287877

2024-01-30 22:03

Copyrighted Image by: Reuters Investing.com -- U.S. crude stockpiles fell much more than expected last week, the API reported Tuesday, just as markets brace for the U.S. response to a deadly drone on its forces earlier this week. Crude Oil WTI Futures, the U.S. benchmark, traded at $77.78 a barrel following the report after settling up 1.4%% at $77.82 a barrel. U.S. crude inventories fell by about 2.5 million barrels for the week ended Jan. 26, compared with a draw of about 6.7M barrels reported by the API for the previous week. Economists were expecting a decline of about 867,000 barrels. The fall in supplies come as concerns about disruptions to global inventories from rising geopolitical tensions remain front and center after U.S. President Joe Biden said he has made a decision about how to respond to the deadly drone attack in Jordan. The API data also showed that gasoline inventories increased by 600,000 barrels last week, while distillate stocks fell by 2.1M barrels. The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies decreased by about 867,000 barrels last week. https://www.investing.com/news/commodities-news/oil-inventories-fall-by-more-than-expected-25m-barrels-last-week-api-3287527

2024-01-30 13:58

Copyrighted Image by: Reuters. Investing.com -- Oil prices cut losses to settle higher Tuesday as simmering geopolitical tensions kept supply risks elevated at time when a stronger outlook on global growth helped boost crude demand hopes. By 14:30 ET (19.30 GMT), the U.S. crude futures settled higher at $77.82 a barrel and the Brent contract jumped 0.8% to $82.47 a barrel. Healthier global growth output boost demand hopes, but China concerns linger The global growth outlook was given a boost, helping to ease concerns about crude demand. The International Monetary Fund lifted its forecast for global growth, projecting 3.1% in 2024, up from 2.9%. Still, the cloud of economic weakness hanging over China is expected to continue to fuel demand concerns. "We see downside risk to our China 2024 oil demand growth forecast of nearly 0.5 million barrels per day on a Q4/Q4 basis," Goldman Sachs said in a recent note,, citing conversations with China consumers and its China oil demand nowcast. Iranian exports vulnerable as Biden makes decision on U.S. response to drone attack The ongoing tensions in the Middle East were ratcheted up a notch after U.S. President Joe Biden said he has made a decision about how to respond to the deadly drone attack in Jordan. The Biden administration has accused Iran of backing the militants who committed the attack, while Tehran has denied involvement in the attack. Fed meeting in focus In the U.S., the world’s largest consumer of crude, traders are keeping an eye on the latest two-day policy-setting by the Federal Reserve, which starts later in the session. The Fed is widely expected to keep interest rates unchanged on Wednesday, but traders will be looking for clues as to when Fed officials think rate cuts are in order, as high interest rates weigh on economic activity. On the supply side, the American Petroleum Institute is scheduled to provide its estimate of U.S. crude stockpiles later in the session, after last week’s hefty 6.7 million barrel decline following weather-related supply disruptions, with production in North Dakota, hit hard. The Organisation of Petroleum Exporting Countries, and allies, known as OPEC+, is due to meet later this week, but a change of the group's oil policy for April is unlikely at this point. Upgrade your decision-making with InvestingPro+! Using discount code “INVEST2024” receive an additional 10% off the InvestingPro+ yearly subscription. Click here and don't forget the discount code. https://www.investing.com/news/commodities-news/oil-prices-settle-higher-as-healthier-global-growth-outlook-eases-demand-concerns-3287060

2024-01-30 09:34

Copyrighted Image by: Reuters. Investing.com - The U.S. dollar traded in a tight range early in the European session Tuesday ahead of the start of the latest two-day Federal Reserve policy meeting, while the euro weakened At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 103.340, only marginally removed from the six-week high of 103.82 it touched last week. Dollar stable as Fed meeting starts Traders have appeared to be reluctant to push the dollar around ahead of the start of the Federal Reserve's two-day policy meeting, which concludes on Wednesday. That said, the escalating geopolitical tensions in the Middle East, with the U.S. vowing to take "all necessary actions" to defend its troops following a deadly drone attack in Jordan by Iran-backed militants, meant the greenback retained underlying support. The U.S. central bank is widely expected to keep interest rates unchanged, meaning Fed Chair Jerome Powell’s post policy meeting press conference is likely to attract the most attention as traders seek clues as to when the officials will decide to start cutting interest rates. Traders currently see a 50-50 chance that the Fed cuts interest rates in March, with expectations having drifted substantially from levels in December when the U.S. central bank estimated cuts of around 150 basis points in 2024. Tuesday's economic calendar includes data on JOLTS job openings, which kicks off a week of domestic jobs data, culminating in the January U.S. payrolls report on Friday. The data will give further indications of the state of the world's largest economy. Euro slips lower ahead of eurozone GDP In Europe, EUR/USD traded 0.1% lower at 1.0824, after data showed that the German economy contracted in the fourth quarter, raising the potential that woes of the region’s largest economy could drag the whole eurozone into recession. German GDP fell 0.3% on the quarter in the final quarter of 2023, an annual drop of 0.2%. Although numbers out of France, Italy and Spain were more encouraging, eurozone GDP is still expected to contract 0.1% in the fourth quarter, a second consecutive negative quarter. “As we have seen over recent weeks, investors have sunk their teeth in 2024 easing cycles, and the European Central Bank pushback against aggressive rate cut expectations has not proved effective,” said analysts at ING, in a note. “Eurozone data this week will not help that pushback, given what should be a combination of weak activity data and softer inflation figures for January.” GBP/USD traded 0.3% lower at 1.2675 ahead of the Bank of England's policy meeting later this week, with the central bank expected to keep interest rates on hold on Thursday. Data released earlier Tuesday by market researcher Kantar showed that British grocery price inflation declined at a slower rate in January, with annual grocery price inflation at 6.8% in the four weeks to Jan. 21, down from a re-stated 6.9% in the previous four-week period. Yuan sentiment still negative In Asia, USD/JPY fell 0.1% to 147.36, with the yen gaining slightly after Japan's jobless rate fell to 2.4% in December from the previous month, government data showed on Tuesday, just under the forecast of 2.5%. USD/CNY traded marginally lower at 7.1782, although sentiment towards the yuan remains quite pessimistic ahead of Wednesday’s release of official purchasing managers' index data. “The Evergrande headlines yesterday serve as a reminder that there are no quick fixes for the property sector and the measures announced by policymakers to support local equity markets, such as restrictions on short-selling, are not proving effective,” ING added. https://www.investing.com/news/forex-news/dollar-marginally-lower-tight-ranges-ahead-of-fed-meeting-3286700