Author: train2invest Admins

Oil prices rose for a third straight session on Monday, buoyed by forecasts of a widening supply deficit in the fourth quarter after Saudi Arabia and Russia extended cuts and by optimism about a recovery in demand in China.

Brent crude futures rose 71 cents, or 0.8 per cent, to $94.64 a barrel by 0622 GMT while U.S. West Texas Intermediate crude futures were at $91.55 a barrel, up 78 cents, or 0.9 per cent.

“China’s stimulus policy, resilient U.S. economic data, and OPEC+’s ongoing output cuts are the bullish factors that support the oil market’s upside movement,” CMC Markets analyst Tina Teng said, referring to a reserve ratio cut by China’s central bank last week to boost liquidity and support its economy.

Traders will be watching decisions and commentary by central banks, including the U.S. Federal Reserve, this week on interest rate policies, as well as key economic data out of China.

Brent and WTI have climbed for three consecutive weeks to touch their highest levels since November and are on track for their biggest quarterly increase since Russia’s invasion of Ukraine in the first quarter of 2022.

The Saudi and Russian output cuts could push the market into a 2 million barrels per day (bpd) deficit in the fourth quarter, and a subsequent drawdown in inventories could leave the market exposed to further price spikes in 2024, ANZ analysts said in a note.

Saudi Arabia and Russia extended supply cuts to the end of the year as part of the OPEC+ group’s plans. Chinese refineries have also ramped up output, driven by strong export margins.

“It seems like prices will easily find a home above the $90 a barrel level, which means the focus might shift to the demand outlook from the world’s two largest economies,” said Edward Moya, an analyst at OANDA.

Global oil demand growth is on track to hit 2.1 million bpd, ANZ said, in line with forecasts from the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC).

Markets will be laser focused on the U.S. Federal Reserve this week, which is expected to keep the Fed funds target range unchanged at 5.25% to 5.50% after it was raised by 25 basis points in the last meeting. The bigger unknown is what the Fed will do at its next get together in November. Investors will be examining the policy statement, the Summary of Economic Projections and Chair Jerome Powell’s press conference for clues on that front.

In Canada, the headliner will be August inflation on Tuesday. Economists are not expecting a lot of relief in consumer prices.

“It should echo the themes of the U.S. effort—a meaty headline, juiced by gas prices, and sticky core inflation,” BMO chief economist Douglas Porter said in a note Friday. “We expect the headline result to land just north of the U.S. at a yearly pace of almost 4%, an unhelpful result for taming inflation expectations.”

Bank of Canada Deputy Governor Sharon Kozicki will speak the same day as CPI, and then the meeting deliberations from September 6 will be released just minutes before the Fed decision. “The latter may shine some light on how close a call the ‘skip’ decision was, and what is key for the next decision. Perhaps helping to solve the Canadian case, retail sales will be released on Friday, including a preliminary estimate for August. We suspect that sales saw moderate gains over the summer, despite consumer sentiment reportedly swooning. Even with unemployment rising, forest fires intruding, and gas prices reviving, it looks like the dog still wasn’t barking,” said Mr. Porter said.

Here’s the daily rundown of the economic reports and corporate earnings that will be grabbing the market’s attention in the week ahead:

Monday, September 18

815 am ET: Canadian housing starts for August. Consensus is for 1% drop to an annualized rate of 252,500

830 am ET: Canadian industrial product price index and raw materials price index for August

830 am ET: Canadian construction investment for July

10 am ET: U.S. NAHB Housing Market Index

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Tuesday, September 19

Euro area consumer prices for August

830 am ET: Canadian consumer price index for August. Consensus is for a 0.2% rise from the previous month, or up 3.8% year over year

830 am ET: Canadian household credit for July

830 am ET: U.S. housing starts and building permits.

145 pm ET: BoC Deputy Governor Sharon Kozicki speaks at the University of Regina

Earnings include: AutoZone Inc.

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Wednesday, September 20

Inflation reports from Germany and UK

130 pm ET: Bank of Canada Summary of Deliberations for the Sept. 6 policy decision

2 pm ET: FOMC policy announcement and Summary of Economic Projections

230 pm ET: Fed Chair Jerome Powell’s press briefing

Earnings include: FedEx Corp.; General Mills Inc.

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Thursday, September 21

Bank of Japan Monetary Policy Meeting through Friday

830 am ET: Canada’s new housing price index for August. BMO expects a 1% year over year decline.

830 am ET: U.S. initial jobless claims for previous week.

830 am ET: U.S. current account deficit

830 am ET: U.S. Philadelphia Fed Index

10 am ET: U.S. existing home sales.

10 am ET: U.S. leading indicator

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Friday, September 22

Japan consumer prices and manufacturing purchasing managers indexes

Euro area purchasing managers index; UK consumer confidence, retail sales and PMIs

830 am ET: Canadian retail sales for July. Consensus is for a rise of 0.4%, accelerating from June’s 0.1% – and a rise of 0.3% when excluding autos.

945 am ET: S&P Global PMIs for September.

More Canadian grocery workers may go on strike at the end of the month, according to reporting from CBC Radio-Canada.

Employees at Real Canadian Superstore, No Frills, and Extra Foods in Manitoba have voted to walk the picket lines once their contract expires on Sept. 28 if negotiations for a new deal fail. All three stores are owned by Loblaw.

Related: Loblaw’s Q2 strong at every level

UFCW Local 832 represents the nearly 4,000 workers and said 97% voted to authorize a strike.

According to the union, Loblaw workers were treated like heroes during the COVID-19 pandemic when stores were staffed enough to stay open, but since then, wages have stagnated.  

After seeing record profits from Loblaw over the past year, workers say they want more compensation. The union also said working conditions at stores have deteriorated.

https://www.supermarketnews.com/retail-financial/loblaw-workers-approve-action-strike#:~:text=UFCW%20Local%20832%20represents%20the,since%20then%2C%20wages%20have%20stagnated.

The United Auto Workers union went on strike at three plants owned by the Big Three automakers – General Motors, Ford and Stellantis – after the two sides did not reach a new labor deal on Thursday night.

The workers are striking at a GM plant in Wentzville, Missouri; a Stellantis plant in Toledo, Ohio; and a Ford plant in Wayne, Michigan. Plants that were not called upon to strike will work without a contract, UAW President Shawn Fain said.

“The UAW Stand Up Strike begins at all three of the Big Three,” the union said in a post on X, formerly known as Twitter, shortly after midnight on Friday.

UAW strikes at GM, Ford, Stellantis plants after no new contract reached | Fox Business

Published: 9/15/2023 12:24 AM ET

China’s industrial production and retail sales growth improved more than expected in August, official data revealed on Friday.

Industrial production posted an annual increase of 4.5 percent, the National Bureau of Statistics reported. Output was expected to climb moderately by 3.9 percent in August after rising 3.7 percent in July.

Likewise, growth in retail sales improved to 4.6 percent in August from 2.5 percent in the previous month. This was also better than economists’ forecast of 3.0 percent.

During January to August period, fixed asset investment increased 3.2 percent from the same period last year, data showed. However, the rate was slightly weaker than the expected 3.3 percent.

Published: 9/15/2023 6:05 AM ET

Gold prices inched higher on Friday, as the dollar retreated after refreshing a six-month high on strong U.S. data released overnight.

Spot gold rose 0.4 percent to $1,918.38 per ounce, while U.S. gold futures were up 0.4 percent at $1,939.90.

The dollar index weakened on improved risk aversion on the back of improved China data and amid expectations that interest rates in the U.S. and Europe may have peaked.

Robust U.S. economic data failed to budge expectations that the Federal Reserve will leave its key interest rate unchanged next week.

On Thursday, the European Central Bank (ECB) piled on a 10th straight interest-rate increase but signaled a potential end to its rate-hike campaign aimed at curbing inflation.

Elsewhere, in the U.K., some recent speeches from MPC members have added fuel to the speculation that the Bank of England is starting to consider pausing interest rate hikes.

Earlier today, China reported industrial production and retail sales figures for August that topped forecasts.

Industrial production posted an annual increase of 4.5 percent, while analysts expected output to climb moderately by 3.9 percent after a 3.7 percent increase in July.

Likewise, growth in retail sales improved to 4.6 percent in August from 2.5 percent in the previous month. This was also better than economists’ forecast of 3.0 percent.

Another batch of U.S. economic data including reports on import and export prices, industrial production and consumer sentiment may sway markets in the New York session.

Published: 9/15/2023 5:51 AM ET

Oil prices rose on Friday and were on track for a third consecutive week of gains on news that Chinese refiners broke refining rate records in August.

Benchmark Brent crude futures edged up 0.2 percent to $93.94 a barrel, while WTI crude futures were up 0.3 percent at $90.44.

Both benchmarks traded at their highest level since early-November 2022 on optimism about improved demand and consumption in China and expectations for a draw in global supply for the remainder of the year.

Total refinery throughput in China was a record 64.69 million metric tons last month, data from the National Bureau of Statistics showed, up 19.6 percent from the year-ago period and marking the fastest annual growth since March 2021.

Additionally, China’s aviation regulator said today that air passenger numbers in August nearly doubled from a year earlier, reaching a historical high of 63.96 million.

China announced a cut to banks’ reserve requirement ratio and the latest industrial output and retail sales growth figures for August topped forecasts, raising optimism that the country is on a path of recovery after months of feeble growth.

Canadian shares look headed for a positive start on Friday, tracking European markets and higher commodity prices following encouraging economic data from China and easing concerns about interest rates.

CGI Group, Inc.(GIB, GIB-A.TO) announced Friday a 10-year, C$380 million strategic partnership with convenience retailer Alimentation Couche-Tard (ATD.TO) to deliver managed IT services.

On the economic front, data on new motor vehicles sales and manufacturing sales, both for the month of July, are due at 8:30 AM ET.

Canadian stocks closed on a buoyant note on Thursday as investors indulged in strong buying in various sectors, reacting positively to fairly upbeat U.S. retail sales data.

The benchmark S&P/TSX Composite Index ended with a gain of 288.90 points or at 20,567.84, slightly off the day’s high of 20,576.52.

Asian stocks closed higher on Friday as investors cheered strong economic data from the U.S. and China as well as signs that the world’s biggest central banks may soon end their tightening campaigns.

European stocks are up firmly in positive territory Friday afternoon after the ECB signaled that Thursday’s rate hike could be the last raise in the current cycle. Encouraging retail sales and industrial production data from China also contribute to the positive sentiment in the markets.

In commodities, West Texas Intermediate Crude oil futures are up $0.45 or 0.5% at $90.61 a barrel.

Gold futures are gaining $8.50 or 0.43% at 1,941.30 an ounce, while Silver futures are up $0.466 or 2.03% at $23.460 an ounce.

Published: 9/14/2023 5:39 AM ET

Gold prices were subdued on Thursday after U.S. consumer inflation data came in hotter than expected, keeping bets of more Fed rate hike alive.

Spot gold slipped 0.1 percent to $1,906.85 per ounce, while U.S. gold futures were down 0.3 percent at $1,927.70.

Data showed U.S. consumer prices increased 3.7 percent year-per-year last month, slightly ahead of the estimated 3.6 percent. Core inflation rose 4.3 percent, matching expectations.

Following the report, CME Group’s FedWatch Tool currently indicates a 97.0 percent chance the Federal Reserve will leave interest rates unchanged next week.

The outlook for November remains more mixed, with the FedWatch Tool indicating a 40.8 percent chance of another quarter point rate hike.

Trading later in the day may be impacted by reaction to the ECB rate decision as well as a slew of U.S. economic data, including reports on weekly jobless claims, retail sales and producer price inflation.

The European Central Bank is likely to raise interest rates for a 10th consecutive meeting but it’s a close call, given growing concerns about growth.

The central bank will update its forecasts for growth and inflation at today’s meeting.

Oil rebounded on Thursday as expectations of a tighter global crude supply outlook for the rest of 2023 overshadowed concerns over weaker economic growth and rising U.S. inventories.

Saudi Arabia and Russia’s extension of oil output cuts will result in a market deficit through the fourth quarter, the International Energy Agency said on Wednesday before a bearish U.S. inventories report prompted a slight pullback in prices.

“That this genuinely bearish stock report only led to a brief temptation to sell speaks volumes and underlines the market mentality,” said Tamas Varga of oil broker PVM.

The tightening oil balance will remain the dominant price driver for the rest of 2023, he added.

Brent crude rose 66 cents, or 0.7 per cent, to $92.54 a barrel by 1010 GMT. U.S. West Texas Intermediate crude (WTI) was up 62 cents, or 0.7 per cent, at $89.14.

Both benchmarks touched 10-month highs on Wednesday before release of the U.S. supply report showing rising crude and refined product stocks sent prices lower.

Priyanka Sachdeva, senior market analyst at Phillip Nova, said supply fears are underpinning oil prices as producers “adamantly stick to restricted production”.

A day before the IEA report, the Organization of the Petroleum Exporting Countries (OPEC) issued updated forecasts of solid demand and also pointed to a 2023 supply deficit if production cuts are maintained.

“The oil market looks decidedly tight over the next two to three quarters as supply constraints persist amid robust demand,” ANZ Research analysts said.

In focus later on Thursday will be the latest interest rate decision from the European Central Bank.

Analyst and investor expectations had been leaning towards a pause in rate increases until Reuters reported on Tuesday that the ECB was set to raise its inflation forecast for next year to more than 3 per cent, bolstering the argument for higher interest rates.