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Wednesday, 22 March 2017

Oil off 1% on inventory build-up

Oil Wednesday extended overnight losses as industry data showed a build-up in U.S. crude stocks. U.S. crude was off 65 cents, or 1.35%, at $47.59 at 08:00 ET. Brent crude shed 73 cents, or 1.43%, to $50.23. American Petroleum Institute weekly data Tuesday showed an increase of 4.5 million barrels in U.S. crude stocks to 533.6 million. Energy Information Administration figures are forecast to show a rise in crude inventories of 2.8 million barrels. U.S. oil output has risen to 9.1 million barrels a day from 8.5 million in June of last year. High inventories and the increase in U.S. production are undermining the impact of agreed output cuts by major producers. OPEC and non-OPEC producers are cutting output by 1.8 million barrels a day in the first half.

Gold rises to 3-week high as doubts grow over Trump's policies

Gold prices traded at a three-week high during North American hours on Wednesday, as investors grew concerned that the Trump administration will fail to deliver on its pro-growth promises. Comex gold futures touched a session high of $1,249.05 a troy ounce, the highest since February 28. It was last at $1,247.95 by 8:55AM ET (12:55GMT), up around $1.50, or about 0.1%. It settled higher for the fourth session in a row on Tuesday, as risk-averse investors sought safer investments amid a weak dollar and tumbling U.S. equities. Meanwhile, spot gold was up $2.95 at $1,247.60 per ounce. Headlines from Washington will continue to be in focus, as House Republicans are expected to vote on repealing and replacing the Affordable Care Act on Thursday, with the votes needed for passage in doubt. The Freedom Caucus, a key group of House Republicans, threatened to issue a formal statement of opposition to the Obamacare replacement bill, which would delay the vote, unless the language in the bill changes dramatically. Investors see the Trump administration's struggles to push through the healthcare overhaul as a sign he may also face setbacks delivering on the promises for tax cuts, regulatory reform and infrastructure spending. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 99.62 in New York morning trade, after falling to a seven-week low of 99.45 overnight. Meanwhile, U.S. Treasury yields traded lower, with the benchmark 10-Year note yield extending its decline to a three-week low of 2.396%. The greenback, along with Treasury yields, have been on the retreat since the Fed raised interest rates on Wednesday last week, but stuck to its outlook for two more hikes this year, instead of three expected by the market. Also on the Comex, silver futures for May delivery shed 3.6 cents, or about 0.2%, to $17.54 a troy ounce. Meanwhile, platinum slumped 0.2% to $970.05, while palladium added 0.6% to $792.17 an ounce. Elsewhere in metals trading, copper futures dropped 1.7 cents, or 0.6%, to $2.602 a pound.

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Tuesday, 21 March 2017

Forex - Dollar index extends losses, touches 6-week lows

The dollar extended losses against the other major currencies on Tuesday, pressured lower by the view that the Federal Reserve won’t accelerate the pace of monetary tightening. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.49% at 99.67 at 09.19 ET, its weakest since February 6. Chicago Fed President Charles Evans said Monday the Fed is on track to raise rates twice more this year, underlining the view that the central bank will stick to a gradual pace of tightening after last week’s rate hike. The dollar was also on the defensive after G20 financial leaders dropped a pledge to keep global trade free and open from a policy statement at the weekend, following opposition from the increasingly protectionist Trump administration. The move renewed uncertainty over U.S. trade relations and by extension the Trump administration’s concerns over the strong dollar. The euro hit six-week highs as concerns over the French presidential elections eased, with EUR/USD advancing 0.59% to 1.0802, its highest level since February 2. Opinion polls showed that Emmanuel Macron consolidated his status as frontrunner in France's presidential election in a televised debate on Monday against his main rival, far-right anti-EU leader Marine Le Pen. Le Pen has pledged to take France out of the euro and hold a referendum on EU membership. Sterling rose to three-week highs, with GBP/USD up 0.75% to 1.2452 after data showing that the annual rate of inflation in the UK rose to the highest since September 2013 in February. The euro was slightly lower against the pound following the inflation report, with EUR/GBP down 0.16% at 0.8674. The dollar was little changed against the yen, with USD/JPY at 112.54 after falling as low as 112.29 overnight, its weakest since February 28. Meanwhile, the Canadian dollar hit the day’s highs after stronger-than-expected domestic retail sales data and as prices of oil, a major Canadian export, rose. USD/CAD was down 0.49% at 1.3283, not far from the two-week lows of 1.3275 set on March 16.

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