2019-11-11 • Updated
During the past week, the US dollar index (DXY) continued consolidation.
Recent releases weren’t very optimistic: manufacturing PMI and home sales both declined. Donald Trump threatened to shut down the US government over funding for a border wallon Wednesday. The market is concerned that the Congress won’t easily raise the debt ceiling and deliver on tax reform.
There will be a lot of economic updates in the coming days: the US will release consumer confidence on Tuesday, ADP employment report and preliminary GDP for the second quarter on Wednesday, core PCE price index and personal spending on Thursday and NFP together with ISM manufacturing PMI on Friday. All in all, we’ll get a pretty much new information about America’s economic health. The quality of these statistics will be very important for further direction of the greenback. Another important driver of the market will be the speech of the Federal Reserve Chair Janet Yellen at Jackson Hole on Friday evening (August 25).
The greenback remains within the overall downtrend. A close above 93.50 is needed for the DXY to start reversing up. Next resistance levels will be at 94.00 and 94.50. A break below 93.00 will lead to 92.50 and 92.00.
China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
The past several weeks have been a real triumph for the bulls in the oil market. The Brent spot price grew by 8.5% during the last month.
Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.
Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.
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