OIL: US Court Tariff Ruling Eases Oil’s Demand Worries, EIA Data Out Later
May-29 04:39
Crude is up sharply during today’s APAC session following a rise of around 1.5% yesterday. News that the US Court of International Trade blocked most of the proposed tariffs saying that the President had overstepped his authority has boosted risk appetite and driven a relief rally in oil prices. The market had been concerned that increased protectionism would weigh on global energy demand. The USD index is up 0.2% after 0.3% on Wednesday.
- WTI is up 1.3% to $62.66/bbl, close to the intraday high of $62.72, and slightly above the 50-day EMA. A clear break above would open $64.19, 21 May high. The benchmark is up 1.8% this week and at its highest since May 21. But OPEC’s meeting on the weekend could push prices down again if another large output increase is decided for July.
- Brent is now 1.4% higher this week after rising 1.1% to $65.64 today, just short of resistance at $66.05, 50-day EMA.
- Most of the US tariffs have now been put on hold with the appeal possibly to be heard by the US Supreme Court. A lengthy national security review may be required for tariffs to go ahead. Either way there is likely to be an extended delay.
- Attention will be on the official EIA inventory data after Bloomberg reported that US crude inventories fell 4.24mn barrels last week, according to people familiar with the API data. But gasoline demand will also be a key part of the release.
- Later the Fed’s Barkin, Goolsbee, Kugler and Daly and BoE’s Bailey appear. Revised Q1 US GDP and jobless claims print.
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CNH: USD/CNH Tests Sub 7.2700, Outperforms Firmer USD Index Levels
Apr-29 04:38
USD/CNH sits a touch up from session lows. We were last near 7.2740, against earlier lows of 7.2692. Still, CNH is up close to 0.15%, while onshore spot has risen close to 0.20% and tracks near similar levels to USD/CNH. This is outperforming the stronger USD trend against the majors so far today. The BBDXY index is up around 0.20%.
- For USD/CNH technicals we are close to the 100-day EMA, while further south is the 200-day at 7.2535.
- BBG reported that a survey of exporters pointed to a greater conversion of earnings back into local currency (see this link). Also note that the holiday period kicks off this Thursday and runs through to next Monday (the Labor day holiday period). Such flows may also be more prominent near end April as well.
- In the cross asset space, equity sentiment is very steady, the CSI 300 remaining sub 3800 at this stage.
- Tomorrow, we get the PMI prints, with market expectations skewed towards weaker prints.
CANADA: NDP Leader Singh Poised To Lose Own Seat And Party Status In House
Apr-29 04:38
- New Democratic Party Leader Jagmeet Singh is running in third place in his own riding according to Elections Canada data as of 12:35am EST Tuesday.
- Data shows Singh with about 4K votes, Conservative candidate with 8.4K and Liberal Wade Chang with 9.3K votes, with 48% of polls reporting.
- NDP reduced to seven seats in preliminary polling, short of what's needed to be an official party in the House of Commons.
GOLD: Gold Gives Back Overnight Gains
Apr-29 04:27
- Gold finished the US trading session higher by +0.73% at YS$3,343.98, having been as low as $3,268.23 earlier in the day yet couldn’t hold onto those gains during the Asian trading day dropping back to $3,314.40.
- The overnight move had been supported by a weaker USD and weaker than expected data.
- The Dallas Fed. Manufacturing Activity fell to its lowest in 5 years with survey respondents showing executives describing the current situation as chaos as supply line disruptions decimate activity.
- This has reduced expectations for Wednesday’s data which sees employment data, inflation and growth.
- Gold had started the week in the Asian trading session on the back foot, trending downwards before the Texas data which has refocused attention on the possibility that already the trade war may be showing up in US data.
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