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Apr 25, 2019

FX | Dollar Report on April 25, 2019 | Swedish crown falls to 17-year low after central bank delays rate hike

Natasha Turak

Reusable euro coin
Sean Gallup | Getty Images
The Swedish crown plummeted to a 17-year low on Thursday after the country’s central bank delayed its next interest rate hike.
The Riksbank began normalising policy in December due to a strong economy but it has since joined its counterparts in Europe and Canada in adopting a cautious outlook.
Still, its message of restraint and concern about weak inflationary pressure caught some investors off guard.
The crown sank 1.4 percent versus the dollar to 9.55, its lowest since August 2002 and was headed for its biggest daily loss versus the euro since November.
“This extraordinary monetary policy stance continues to whack the crown and the [Riksbank] change in tone seems warranted,” said Societe Generale analyst Kit Juckes.
The central bank said at its previous meeting that it planned to tighten policy in the second half of this year but Nordea Markets Analyst Torbjorn Isaksson said the bank was unlikely to hike until 2020 or possibly later.
Inflation in Sweden has lost steam despite getting a boost from a currency that has weakened steadily over the last six years.
The euro languished near a 22-month low, weighed down by ailing growth in Germany and the spectre of political uncertainty in Spain.
A surprise drop in German business morale has highlighted the divergence between economic data in the United States and the euro zone. The euro has recently traded in a fairly narrow range but expectations of price swings in next month’s elections for the European Parliament have risen according to implied volatility gauges.
The European Central Bank in March pushed out the timing of its first post-crisis rate hike until 2020 and that is impacting the euro. It suffered its worst day in over six weeks on Wednesday, falling 0.6 percent to a 22-month low of $1.1141. It traded flat on Thursday at $1.1154.
“Political uncertainties combined with economic concerns are a rather bad cocktail for the euro,” Antje Praefcke, an analyst at Commerzbank, wrote in a note to clients.
A polarised election in Spain on Sunday could further dampen the euro’s prospects.
The greenback rallied to a 23-month high of 98.189 against a basket of key rivals largely propelled by the euro’s weakness. The index last traded 0.15 percent lower at 98.027.
Investors will watch the release on Friday of U.S. gross domestic product data for the first three months of 2019, for signs of whether the United States remains stronger than other leading economies.

Source: CNBC

Bonds Yields Report on April 25, 2019 | US Treasury yields unchanged after of jobless data

Silvia Amaro

U.S. Markets Overview: Treasurys chart

US 3-MOU.S. 3 Month Treasury2.429-0.0050.00
US 1-YRU.S. 1 Year Treasury2.4250.000.00
US 2-YRU.S. 2 Year Treasury2.3320.0120.00
US 5-YRU.S. 5 Year Treasury2.330.0140.00
US 10-YRU.S. 10 Year Treasury2.5340.0120.00
US 30-YRU.S. 30 Year Treasury2.9440.0030.00
Investors are tracking earnings, with bond traders weighing up whether the Federal Reserve could perhaps return to a more hawkish stance if conditions look to be improving for large businesses in the country.
The number of Americans filing for unemployment benefits rose by the most in 19 months last week, the Labor Department said Thursday.
Initial claims for state unemployment jumped 37,000 to a seasonally adjusted 230,000 for the week ended April 20, according to the government report, the largest increase since early September 2017.
In terms of auctions, the U.S. Treasury is set to sell $32 billion in seven-year notes Thursday, $50 billion in four-week bills and $35 billion in eight-week bills.

Source: CNBC

Wall Street Closing Report on April 25, 2019 | Dow falls more than 100 points as 3M suffers biggest drop in more than 30 years

Fred Imbert

The Dow Jones Industrial Average dropped on Thursday as a sharp decline in 3M shares dragged the 30-stock index.
The Dow fell 109 points as shares of 3M dropped 13.2% after the company reported earnings that were much lower than analysts had expected. The company also slashed its full-year outlook and announced plans to cut 2,000 jobs worldwide. 3M shares were on pace for their worst day since Oct. 19, 1987, also known as Black Monday.
CEO Mike Roman said the quarter was “disappointing,” noting: “We continued to face slowing conditions in key end markets which impacted both organic growth and margins, and our operational execution also fell short of the expectations we have for ourselves.”
The S&P 500 and  Nasdaq Composite fared better than the Dow, however, as Facebook and Microsoft jumped on strong quarterly numbers.
The S&P 500 climbed 0.1%, led by gains in the health care and communications services sectors. The Nasdaq, meanwhile, rose 0.3% and hit an intraday record.
Traders work under monitors displaying 3M Co. signage on the floor of the New York Stock Exchange (NYSE) in New York.
Michael Nagle | Bloomberg | Getty Images
Facebook shares rose more than 5% after its first-quarter numbers showed promising growth in Stories and ads.
“We believe investors will continue to gain comfort with the incremental financial risk created by content and privacy concerns,” Guggenheim Partners analyst Michael Morris wrote in a note. “The company is proactively and definitively addressing these issues while expanding core monetization and new initiatives.”
The analyst also raised his price target on Facebook to $220 per share from $200.
Microsoft, meanwhile, climbed more than 3% as its better-than-expected earnings were driven by a 41% surge in its commercial cloud revenue business. That growth was led by Azure, which saw sales skyrocket by 73%.
Amazon, Ford Motor, Starbucks and Mattel are among the companies scheduled to report after the bell Thursday.
More than 170 S&P 500 companies have reported quarterly results so far, according to FactSet. Of those companies, 78% have posted better-than-expected earnings. “The company is proactively and definitively addressing these issues while expanding core monetization and new initiatives.
“With the earnings season approaching the halfway mark, the news has been good enough to keep bulls committed to their positions and there have been few examples of genuinely troubling news,” said Michael Shaoul, chairman and CEO of Marketfield Asset Management, in a note.
“The worst we could say is that investors are drawing in some cases on hope to a greater degree than normal, particularly in the key semiconductor sector where a strong second half rebound has been priced into many issuers, but this seems unlikely to be a factor over the near term,” Shaoul added.
Wall Street ended Wednesday’s session lower on the back of mixed corporate results. Earlier this week, the S&P 500 notched an all-time closing high and remains about half a percent below its intraday record.
—CNBC’s Silvia Amaro contributed to this report.

Source: CNBC

Table of Spot Prices as of the close of trading in New York on Thursday, April 25, 2019

Spot Prices as of the close of trading in New York
Thursday, April 25, 2019

Oil Price Report on April 25, 2019 | US crude falls 1%, settling at $65.21, as oil prices pull away from 6-month highs

Tom DiChristopher

Reusable: Rusted oil jacks Texas 150326
Rusted out “pump-jacks” in the oil town of Luling, Texas.
Getty Images
Oil prices turned lower heading into Thursday’s settlement, after Brent crude earlier touched $75 per barrel for the first time in nearly six months.
Crude futures earlier drew support as quality concerns halted some Russian crude exports to Europe and the United States prepared to tighten sanctions on Iran.
Wednesday’s report of a bigger-than-expected build in U.S. crude inventories last week to their highest since October 2017 was weighing on the U.S. benchmark, analysts said.
U.S. West Texas Intermediate crude settled 68 cents lower at $65.21 per barrel, down 1% and slipping further from this week’s 2019 high at $66.60.
Brent crude futures were down 17 cents at $74.40 around 2:30 p.m. ET (1830 GMT). They earlier hit a session high of $75.60, their strongest since Oct. 31.
Poland and Germany suspended imports of Russian crude via the Druzhba pipeline due to contamination.
The pipeline can ship up to 1 million barrels per day, or 1 percent of global crude demand. About 700,000 bpd of flow was suspended, according to trading sources and Reuters calculations.
“We consider the quality issues with Russian crude oil as a supply disruption that is happening at the same time sanctions on Iran and Venezuela are impacting supply,” said Andy Lipow, president of Lipow Oil Associates in Houston.
U.S. attempts to drive Iranian oil exports down to zero also boosted prices.
The United States this week said it would end all exemptions for sanctions against Iran.
Iran has been under U.S. sanctions for more than six months, but several major buyers, including China and India, were given temporary exemptions until this week. Beginning in May, those countries have to halt oil imports from Tehran or face sanctions.
The U.S. decision comes amid supply cuts led by OPEC since the start of the year aimed at propping up prices.
Still, Brian Hook, U.S. special representative for Iran and senior policy adviser to the secretary of state, said on Thursday “there is plenty of supply in the market to ease that transition and maintain stable prices.”
Consultancy Rystad Energy said Saudi Arabia and its main allies could replace lost Iranian oil.
“Saudi Arabia and several of its allies have more replacement barrels than what would be lost from Iranian exports,” said Rystad’s head of oil research, Bjoernar Tonhaugen.
“Since October 2018, Saudi Arabia, Russia, the UAE, and Iraq have cut 1.3 million bpd, which is more than enough to compensate for the additional loss,” he added.

Source: CNBC

Gold Price Report on April 25, 2019 | Gold firms as weak data puts focus back on growth risks

Jeff Daniels

Reusable: Gold bars 001
Gold inched higher on Thursday as weak economic data rekindled fears over global growth, while bullion’s recovery from four-month lows and an improved technical picture prompted some investors to cover their short positions.
Spot gold was up 0.1 percent at $1,276.43 per ounce. U.S. gold futures settled $0.30 higher at $1,279.70.
World equity markets slipped as a surprise deterioration in German and South Korean economic data brought back to the fore concerns about a global downturn.
“The correction in (stock) markets has provided some support for gold. But the (gold) market is still looking for catalysts for a significant move and there is not much momentum in either direction,” Capital Economics analyst Ross Strachan said.
“Gold is awaiting bigger developments. We’ve got U.S. GDP and that’s expected to have a significant impact on the dollar.”
U.S. gross domestic product data will be released on Friday, with the economy forecast to have grown by 2.1 percent in the first quarter.
Gold has recovered after hitting a four-month low of $1,265.90 an ounce this week, despite expectations that prices could fall towards the 200-day moving average around $1,251, analysts said.
“Gold prices are showing some resilience here. We haven’t managed to see an extension to the technical breakout we saw this week,” said Ole Hansen, commodity strategist at Saxo Bank.
“The fact that we have managed to recover and find bids is making some shorts nervous and that is providing some support right now. The correction in global markets is also just adding to the equation.”
Data from the U.S. Commodity Futures Trading Commission showed speculators switched to a net short position in COMEX gold in the week to April 16.
The bearish sentiment in gold was also reflected in holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund. Holdings dipped 0.2 percent to 747.87 tonnes on Wednesday, the lowest since Oct. 19.
Spot gold may bounce towards resistance at $1,284, as it has found support at $1,264, Reuters technical analyst Wang Tao said.
Elsewhere, silver was steady at $14.91 an ounce, while platinum too was firm at $878.84.
Palladium dipped 0.1 percent to $1,416 an ounce.

Source: CNBC