Archives of “September 2019” month

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Russian oil minister Novak: oil prices are back to balanced levels

  
Analysis, Crude

Brent crude is trading at $61

The Russian oil minister Novak is on the wire saying that oil prices are back to bounce levels.  He also adds that:
  • Oil prices are stable around $60 per barrel
The price of Brent crude is currently trading at $61 per barrel. That is down $0.85 or -1.37% on the day.
WTI crude oil futures meanwhile are trading down $0.46 or -0.82% at $55.45

A look at the US-China trade war and its impact on markets

  
  Analysis
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The impact escalation will have

The impact escalation will haveThe focus of the market on the China-US trade war is acute due to China’s and the United States economic weight. In 2018 the US’s GDP was above $20 trillion and China’s GDP over $14 trillion, which makes them the world’s two largest economies by nominal GDP.

Furthermore, consider that when you add these two countries GDP together, they account for more than 40% of the world’s entire GDP. So, the first point to grasp is that the significance of a US-China trade war is really a global growth problem.

When you factor in the alliances and trade partners of both countries, the legitimate concern is that a China-US trade war spills over across the entire globe and slows down the entire world economy.

Trade between the US and China

(more…)

US dollar share of currency reserves falls to lowest since 2013

  
  Analysis
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Dollar still overwhelms the field

Dollar still overwhelms the field
The US dollar share of global currency reserves fell to 61.63% of the total in Q2, according to the IMF. That’s down from 61.86% in Q1 and is the lowest since 61.27% in Q4 of 2013.
In terms of the total value, there was no selling of US dollars. They totaled $6.79 trillion compared to $6.74 trillion in Q1. Instead, it was the growth in reserves of other currencies that tilted the balance.
In particular, yen reserves grew to 5.41% of the total, which is the most since 2001. Chinese yuan reserves also hit 1.97% from 1.95% while the euro rose to 20.35% from 20.23%.

Eurozone August unemployment rate 7.4% vs 7.5% prior

  
  Analysis
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latest data released by Eurostat

unemployment eurozone
The latest unemployment figures from the eurozone are showing a continued steady decline in unemployment numbers. The worry here would have been if employment levels start to fall due to a slowdown in manufacturing etc. However, no concerns like that seen in the data and EURUSD at 1.0932 – remember there are some decent option levels at 1.0900 level on the EURUSD

Saudi Arabia’s head says attacks on oil facilities were an act of war by Iran

  
Analysis, Politics
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Saudi Arabia’s Crown prince in an interview on US TV

  • Said oil prices could spike to “unimaginably high numbers” if the world does not come together to deter Iran
  • said he would prefer a political solution to a military one
  • agreed with U.S. Secretary of State Mike Pompeo that the attacks were an act of war by Iran
  • a war between Saudi Arabia and Iran would collapse the global economy
US Sunday evening futures trade in oil is open, a little higher to begin the week.

China’s Vice com min (weekend comments) urges ‘calm and rational’ resolution to trade war

  
  Analysis
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Types … A, S, space,  I ,F

trump phone tweet
Vice Commerce Minister Wang Shouwen speaking on on Sunday said hopes China and the US will resolve their trade dispute “with a calm and rational attitude”,
I suspect they won’t. Maybe something stop gap will be reached, buy a few soybeans sort of thing, but the issues are deep and we’ve already been disappointed many, many times.
Ministerial-level talks begin in Washington on October 10-11.

Here is what’s on the economic calendar in Asia today

  
  Analysis
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2245 GMT New Zealand Building permits for August

  • prior -1.3% m/m

2301 GMT UK data – Lloyds Business barometer for September

  • prior 1

2350 GMT Bank of Japan Summary of Opinions from the most recent monetary policy meeting.

  • The ‘summary’ is out well ahead of the minutes and adds a bit more info to the post-meeting statement.

2350 GMT Japan

August Retail Sales y/y,

  • expected is 0.7%, prior was -2.0%

Retail Sales m/m,

  •  expected is 2.4%, prior was -2.3%

Industrial production for August preliminary

  • y/y, expected is -0.5%, prior was 1.3%
  • m/m, expected is -3.9%, prior was 0.7%

0100 GMT – New Zealand – ANZ business survey for September

  • Business Activity Outlook prior -1 (a drop of 6 points)
  • Business Confidence prior -52 (a drop of 8 points)
  • Business Confidence is a concern for NZ policy makers – low confidence flows through to less business investment and job creation.

0100 GMT Australia monthly inflation guide for September

Melbourne Institute

  • prior 0.0% m/m, 1.7% y/y
  • This is only a monthly guide, albeit a good one. Official CPI data from OZ in only once a quarter.

0100 PMI data from China for September

  • manufacturing expected 49.6, prior 49.5
  • non-manufacturing expected 54.0, prior 53.8
  • composite prior 53.0

0110 GMT Bank of Japan Japanese Government Bond buying operation

  • 1 – 3, 3 – 5 years remaining until maturity

0130 GMT Australia private sector credit for

  • expected 0.3% prior 0.2% m/m
  • expected 3.0% prior 3.1% y/y

0145GMT back to China for the Caixin / Markit Manufacturing PMI

  • expected 50.2, prior 50.4
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