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Apr 22, 2019

FX | Currencies | Dollar lower in holiday-thin trade, oil drives loonie, rouble gains

3 minutes

Reusable US dollar
The U.S. dollar has regained some strength in recent weeks.
Getty Images
The dollar was little changed against a basket of currencies in thin holiday-impacted trading on Monday, while a jump in the price of oil on news that Washington will end sanctions waivers for major Iranian oil importers boosted the Canadian dollar and the Russian rouble.
The dollar index, which measures the greenback against six major currencies, was 0.19% lower at 97.28. The index hit a two-week high of 97.485 late last week.
Against the Japanese yen the dollar was about flat, while the euro was 0.10% higher against the greenback.
Financial markets in Australia, Hong Kong and many major countries in Europe are closed on Monday for the Easter holiday. Currency trading continues globally but volume is expected to be light.
“With much of the market still out on Easter and Passover related holidays there is not a whole lot to chew on to start the week,” said Brad Bechtel, global head of FX at Jefferies, in New York.
The greenback has found support in recent weeks on the back of a gradual rise in U.S. 10-year Treasury yields and signs of strength in the world’s top economy, including better-than-expected retail sales in March, following a weak start to the year.
Traders will be keenly watching the U.S. GDP report due Friday for further clues on the health of the U.S. economy, analysts said.
On Monday, crude oil prices were the biggest driving force in currency markets, analysts said.
Brent crude topped $74 a barrel on Monday, the highest since November, as the White House said U.S. President Donald Trump has decided to eliminate all waivers issued to eight economies that had allowed them to buy Iranian oil without facing U.S. sanctions.
With the jump in the price of oil, one of Canadas major exports, the Canadian dollar rose 0.36% against its U.S. counterpart.
The rouble hit its highest level against the euro since last April and a one month-peak versus the dollar on Monday, driven by the jump in oil prices and local month-end taxes that boost demand for the Russian currency.
Sterling was a shade lower at $1.2982, dipping below the $1.30 handle and nearly 0.4 percent off a two-month low of $1.2945 hit last month. The currency is now at its least volatile in years as investors await a breakthrough in Britain’s European Union divorce process.

Source: CNBC

Bond Yields Report on Monday 22, 2019 | Treasury yields move higher ahead of home sales data

Holly Ellyatt

U.S. government debt yields were little changed Monday as investors continued to monitor economic data.
The yield on the benchmark 10-year Treasury note rose to 2.57% while the yield on the 30-year Treasury bond rose to 2.977%. Bond yields move inversely to prices.
Bond traders could see a quieter day Monday as markets re-open following the Easter break. Existing home sales data for March, due 10.00 a.m. ET, will be in focus for traders.
The Chicago Fed’s monthly update on economic activity suggested a pickup in March led by employment-related indicators. The Chicago Fed National Activity Index (CFNAI) rose to –0.15 in March from –0.31 in February. Three of the four broad categories of indicators that make up the index increased from February. However, the Chicago Fed said that three of the four categories made negative contributions to the index in March.

Source: CNBC

Wall Street Closing Report on Monday 22, April 2019 | Stocks end the day little changed as Wall Street braces for a corporate earnings deluge

Fred Imbert

Xinhua | Wang Ying via Getty Images | Xinhua News Agency
Halliburton and Kimberly-Clark are among the companies that reported better-than-expected quarterly results on Monday morning. Their shares rose 0.3% and 6.1%, respectively.
So far, the majority of corporate earnings reports have topped expectations. FactSet data shows 76.5% of the S&P 500 companies that have posted earnings have surpassed analyst estimates. Analysts came into the season with low expectations, forecasting a 4.2% drop in profits.
"First-quarter earnings are coming in slightly better, so it's removed some of the concern from the market," said Robert Pavlik, chief investment strategist at SlateStone Wealth. "But not enough to move investors out of the sidelines."
"I think that's one of the reasons the market is consolidating," he said.
Sentiment was also muted on Monday after the South China Morning Post reported China's policy-making committee will pursue structural changes to its economy, rather than add stimulus. Chinese stocks closed sharply lower overnight, with the Shanghai Composite losing 1.7% while the Shenzhen A Shares index declined 1.5%.
Wall Street also focused on the oil market as U.S. crude rose 2.7% after the Trump administration said it will not allow the purchase of Iranian oil by some countries. The move could take about 1 million barrels per day out of the oil market. Energy shares rose along with oil prices. The Energy Select Sector SPDR Fund (XLE) traded 2% higher, led by Marathon Oil and Devon Energy.
Investors came into Monday's session after a mixed weekly performance. The Dow and Nasdaq posted marginal gains last week, while the S&P 500 snapped a three-week winning streak.
Still, the major indexes remain within striking distance of record highs set last year. The Dow and Nasdaq are both 1.6% below their all-time highs while the S&P 500 is 1.2% away from reaching its intraday record.
John Davi, chief investment officer at Astoria Portfolio Advisors, said positioning in stocks is "still fairly light," adding: "A better-than-expected earnings season is probably needed for people to get more comfortable."
Still, "companies are doing OK relative to what was priced into the market," he said. "I think we probably break the all-time high and then we consolidate more towards the summer."
On the data front, existing home sales for March fell 4.9% to a seasonally adjusted annual rate of 5.21 million. The drop last month came after an 11.2% surge in February.
—CNBC's Holly Ellyatt contributed to this report

Source: CNBC

Opinion | A brutal Sunday for Trump

By Jennifer Rubin

Rudy Giuliani, an attorney for President Trump, speaks in Portsmouth, N.H. Charles Krupa/AP) (Charles Krupa/AP)

Jennifer Rubin
Opinion writer covering politics and policy, foreign and domestic
The full impact of Robert S. Mueller III’s report is beginning to register with both Democrats and President Trump’s apologists. If the Sunday shows were any guide, it’s going to be tough sledding for Trump’s spin squad.
Kellyanne Conway on ABC’s “This Week” chose simply to lie about the report. She denied the report left the decision on obstruction up to Congress. She danced away when presented with Trump’s explicit statement that he never wanted to fire Mueller and with the report’s findings that he told then-White House counsel Donald McGahn to fire Mueller. A small snippet of the exchange demonstrates her abject dishonesty in lying about a report documenting Trump’s lies:
[MARTHA] RADDATZ: I do want to talk about Russian interference, but I want to get a clear answer on Don McGahn. Do you believe Don McGahn when he says the president tried to get him to fire Bob Mueller?
CONWAY: I believe the president was frustrated about the investigation from the very beginning and knew it was ill-conceived. And I would remind everybody of something that gets zero coverage, which is, days before …
RADDATZ: Please answer that question, Kellyanne. It’s the only question …
CONWAY: You’ve got to ask Don McGahn and the president. I can only talk about …
RADDATZ: It is in the Mueller report and Don McGahn said he’s telling the truth, under oath …
CONWAY: I don’t believe — I don’t believe it amounts to obstruction of justice and if it had, then Mueller would have said this is obstruction of justice …
RADDATZ: But do you believe Don McGahn?
CONWAY: I believe that Don McGahn is an honorable attorney who stayed on the job 18 months after this alleged incident took place and that, if he were being asked to obstruct justice or violate the constitution or commit a crime — help to commit a crime by the president of the United States, he wouldn’t have stayed. I certainly wouldn’t stay. The president is — was rightly frustrated and trying to, like everybody else tries to do, make an ill-conceived, illegitimate investigation that’s produced no collusion, no criminal conspiracy, no indictment, no impeachment of this president.
He was trying to make it go away because he says, on page 61 — on page 61 of Volume 2 — people should read it — the — Mueller admits that the president is rightly frustrated that he thinks this ill-conceived investigation is going to affect his ability to go forward with foreign policy and his domestic agenda. He’s been under a cloud from day one even though on January 6 …
“Frustration” is no defense to obstruction of justice. In fact, it is a motive.
When guests behave as Conway did, it is best for the host to explicitly state the guest is not answering the question and/or is lying.
That’s what Fox News’s Chris Wallace did with Rudolph W. Giuliani when he tried to assert that Trump was exonerated on obstruction. (“But, Mayor, that’s not true. The Mueller report makes a clear, especially on the issue of … obstruction … that he’s leaving it to Congress.”)
At other times, the Trump team just attacked Mueller, whose work they were touting just days ago:
WALLACE: Obstruction of justice can be motivated by a desire to protect noncriminal personal interests to protect against investigations for underlying criminal liability falls into a gray area, or to avoid personal embarrassment.
Mueller says the injury to the justice system is just as great. It doesn't matter whether there was an underlying crime. It's still obstruction.
GIULIANI: Well, when did Mueller become god? Mueller says the injury to the justice system is still as great — there was no injury, by the way. We’re talking about an inchoate crime. We’re talking about something that didn’t happen.
And then there is the tactic of confessing to conduct that all but the Trump cult would consider to be a betrayal of one’s country and our democracy. On “Meet the Press,” Giuliani tried to condone using WikiLeaks, a Russian cut-out, to win the election:
Why did the president trumpet WikiLeaks so many times?
Because they were putting out things that were true and very, very damaging to Hillary Clinton. Of course, of course you would want things that are —
And you knew this was a — but you at the time even sort of knew that these were stolen by foreign —
I didn't.
— folks.
I did not. I knew WikiLeaks had them. It’d be like the Pentagon Papers. I mean, Pentagon Papers were stolen. They were stolen from the, from the, from the Department of Defense. My god, that’s horrible. During, during and about a war —
This is a foreign adversary though. This is a foreign adversary, someone who many —
What's the difference between a spy and a foreign adversary?
One works for the United States of America and one doesn't.
Well, wait a second. Wait a second.
Doesn't one work for the United States of America and one doesn't?
Clearly, stealing classified documents is theft. Now, there were overriding reasons for it, but it’s still theft. Legally, it’s the same thing. Morally, it’s the same thing. And the reality is, here’s the thing that’s really interesting about it. And I don’t want to dispute this too much. But everything they put out about Hillary Clinton was true. They didn’t make things up. They shouldn’t have stolen it. But the American people were just given more information about how deceptive, how manipulative her people and her campaign were. …
But in 2016, I'm just curious. In 2016, the intelligence services knew that WikiLeaks was not a journalistic enterprise anymore. It may have started that way. That it was serving as a front for essentially foreign adversary intelligence dumps.
Why did the president think it was ethical to essentially trumpet what WikiLeaks was doing?
Well, if I’m, if I’m — even in law enforcement, if I’m running an investigation and all of a sudden evidence is given to me about the criminality of the person I’m investigating, even if it comes from a, from a questionable source, I’m going to use that information. And there was nothing, nothing to suggest that this was manufactured evidence. Everything printed about —
CHUCK TODD: But does it bother you at all that a foreign adversary wanted to manipulate our elections?
Sure it does. Absolutely.
So why participate in helping in their manipulation?
Nobody's participating in it.
Trumpeting WikiLeaks is participating in it.
No, it is not. It is not. That’s not at all participating in it. …
But of course holding up the fruits of hacked material obtained by a Russian cut-out is “participating” in the plot, just as his campaign team attending a meeting in Trump Tower with the hope of getting dirt on Hillary Clinton from the Russians constituted “participating” in a foreign government’s interference with our election.
Let’s not gloss over what Giuliani in essence is saying: Yeah, why not let a foreign power help him win?! (Someone should ask Trump if he intends to ask Russia to help him out again in 2020.) No, in a democracy we — not a foreign dictator — get to pick our leaders. (In case you think this might have been a slip of the tongue, Giuliani repeated this argument on CNN’s “State of the Union.” He told Jake Tapper that “there’s nothing wrong with taking information from Russians.”)
In short, Giuliani acknowledges that Trump, just as Mueller said in the report, eagerly looked to Russia to help win the presidency. If Trump really cannot acknowledge that such conduct is a betrayal of our sovereign country, he has no business being its president. It’s ironic for a president who was obsessed with Democrats’ trying to delegitimize his presidency to defend himself by acknowledging he looked to Russian hackers to win the election.
The administration is trapped in its own spin. Having claimed vindication by the report, Trump and his flunkies now must deny what is in it, avoid answering questions for which there is no good answer and/or deny that getting help from a hostile power betrays our country. That might get the administration through a news cycle or two, but at some point a significant majority of Americans may conclude Trump is a menace to our Constitution — to our sovereignty — and must be ejected before he can do more harm.
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Crude Oil Price Report on Monday 22, April 2019 | Oil surges 3% to nearly 6-month highs as US aims to cut Iran's crude exports to zero

Tom DiChristopher, Weizhen Tan

Oil prices surged about 3% at midday on Monday, hitting fresh 2019 highs, after the Trump administration announced that all oil buyers will have to end imports from Iran in just over a week or be subject to U.S. sanctions.
The administration said the State Department will cease granting sanctions waivers to any country still importing Iranian crude or condensate, an ultra-light form of crude oil, after May 2.
Brent crude futures shot up more than 3% to $74.52 per barrel around midday, sailing past last week’s 2019 high at $72.27 and hitting the highest level since Nov. 1, 2018. Brent, the international benchmark for oil prices, was last up $2.26, or 3.1%, at $74.23 per barrel.
U.S. West Texas Intermediate crude futures rose $1.75, or 2.7%, to $65.75 per barrel, after earlier hitting $65.92, the highest level since Oct. 31, 2018. WTI had been trading sideways after hitting a five-month high at $64.79 nearly two weeks ago.

Crude futures first hit new 2019 highs following report by the Washington Post on the Trump administration’s new policy.
The surprise move is driving the breakout in oil prices, said Michael Bradley, equity strategist at investment bank Tudor Pickering Holt.
“Crude markets were taken by surprise today as the Trump administration indicated it WON’T renew waivers that lets countries purchase Iranian oil without facing U.S. sanctions,” he said in a research note. “Many expected that the US would take tougher action on the waiver front, but most DIDN’T expect an announcement of zero waivers.”
The U.S. reimposed sanctions in November on exports of Iranian oil after U.S. President Donald Trump unilaterally pulled out of a nuclear accord struck in 2015 between Iran and world powers. Washington, however, granted eight of Iran’s biggest oil buyers exemptions that allowed them limited purchases for an additional six months.
The eight buyers are China and India — Iran’s biggest customers — as well as Japan, South Korea, Turkey, Italy, Greece, and Taiwan. The waivers have allowed Iran to continue exporting about 1 million barrels per day, down from roughly 2.5 million bpd last year.
The decision to end the waivers comes as oversupply is rapidly draining from the oil market following several months of production cuts led by Saudi Arabia. The top oil exporter is spearheading an effort by OPEC and other producers, including Russia, to keep 1.2 million barrels per day off the market.
“The market reaction you’re seeing right now is because we are in a tight situation supply-wise because of the efforts of Saudi Arabia over the past several months,” John Kilduff, founding partner at energy hedge fund Again Capital, told CNBC’s “Squawk Box” on Monday.
Brent prices have risen by 38% and U.S. crude is up nearly 45% this year following a collapse in the cost of crude in the final months of 2018.
In a statement, the White House said the U.S. will work with OPEC members Saudi Arabia and the United Arab Emirates “to take timely action to assure that global demand is met as all Iranian oil is removed from the market.”
Saudi Energy Minister Khalid al-Falih said the kingdom will “coordinate with fellow oil producers to ensure adequate supplies are available to consumers while ensuring the global oil market does not go out of balance.”
“In the next few weeks, the Kingdom will be consulting closely with other producing countries and key oil consuming nations to ensure a well-balanced and stable oil market, for the benefits of producers and consumers as well as the stability of the world economy,” Falih said in a statement.
OPEC and its allies are scheduled to meet at the end of June to decide whether to lift the production caps or continue suppressing output.
A spokesperson for China’s Foreign Ministry and Turkey’s minister of foreign affairs denounced the U.S. policy towards Iran following the announcement.
Of the buyers of Iranian oil, India could suffer the most from Washington’s move, said Daryl Liew, head of portfolio management at financial services company Reyl Singapore.
“I think India is probably one of the key potential countries that might suffer from a higher oil price, in terms of their current account deficit, for example. And that’s going to be basically putting pressures on inflationary pressures as well,” Liew said, speaking on CNBC’s “Street Signs” on Monday.
Meanwhile, major OPEC oil producer Libya’s capital Tripoli was hit by a series of airstrikes and explosions over the weekend, in escalating violence that could threaten oil supply further.
The country has been torn by conflict since the fall of dictator Muammar Gaddafi in 2011. Libya is on the cusp of full-scale civil war after an eastern military leader ordered his forces into Tripoli, the seat of a rival, United Nations-recognized government.
The situation in Libya could lead to a rapid drop in oil production, said Kang Wu, head of analytics for Asia at S&P Global Platts.
“Libya is producing 1.1 million barrels per day. If things go wrong, immediately somewhere around 300,000 to 400,000 barrels per day of oil may be affected,” he said.
“A lot depends on how Saudi Arabia will react to the situation — they have surplus capacity — but supply concerns will keep pressure on oil prices in the short term,” Wu added.
— Reuters contributed to this report.

Source: CNBC

Gold Price Report | Gold holds steady on weaker dollar, US-Iran tensions

Tom DiChristopher

Reusable Gold Bullion
Gold steadied on Monday, holding above a near four-month low touched the previous session on support from a weaker dollar and expectations the United States would further restrict Iranian oil exports.
Spot gold was little changed at $1,275.26 per ounce. On Thursday, it touched $1,270.63, its lowest since Dec. 27. The market was closed on Friday.
U.S. gold futures for June delivery rose 0.1 percent to $1,277.20 an ounce.
“They (U.S.) have taken an aggressive move by not extending the waivers. There are some geo-political risks and a bit of safe-haven demand” for gold, said Bob Haberkorn, senior market strategist at RJO Futures.
He said a weaker dollar and lower equities were also supporting bullion.
Oil topped $74 a barrel on Monday, the highest since November, as the United States was set to announce a further clampdown on Iranian oil exports.
Wall Street equities were trading lower, weighed down by technology shares, which helped bullion accumulate safe-heaven bids.
“There is some risk aversion in the marketplace to start the trading week, as the U.S. is ratcheting up its economic sanctions on Iran,” said Jim Wyckoff, senior analyst with Kitco Metals in a note.
The dollar was down 0.2 percent, making bullion cheaper for investors holding other currencies.
On the technical front, gold’s break below key support levels, including the 100- and 50-day moving averages last week, signalled a further downside to prices, analysts and traders said.
“Technically, the gold bears have the overall near-term technical advantage,” Wyckoff said.
Meanwhile, speculators switched to a net short position in COMEX gold in the week to April 16, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, dropped to 751.68 tonnes on Thursday, the lowest levels seen since Oct. 26.
Among other metals, silver rose 0.6 percent to $15.01 per ounce.
Platinum fell 0.1 percent, to $899.81 per ounce and Palladium was down 0.7 percent to $1,412.61, having earlier climbed to its highest in more than two weeks at $1,429.91 an ounce.

Source: CNBC