Trading & Investment Trading Institute – TIE Institute Indian rupee falls on report a minister urges devaluation; Finance Ministry denies

The Indian rupee fell abruptly on Thursday after a television channel reported that the commerce ministry will propose a devaluation in the unit to promote dwindling exports, but trimmed losses after a finance ministry denial.

The rupee <inr=d2>weakened 0.28 percent to 67.0750 to the dollar before paring losses after the central bank stepped in to prevent a sharp fall. At 0540 GMT (01:40 a.m. EDT), it was trading at 66.9550, lower than Wednesday’s close of 66.8875/8975.

© Reuters. An employee poses with the bundles of Indian rupee notes inside a bank in Agartala

The finance ministry denied that the government was discussing a possible devaluation of the rupee, whose floating exchange rate is managed by the Reserve Bank of India.

There was no truth to reports of a rupee devaluation, Shaktikanta Das, economic affairs secretary at the finance ministry was quoted by financial newswire Newsrise, a partner of Reuters, as saying.

Das also said the rupee’s value was determined by the market and that there was no plan to change policy on the currency’s valuation.

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India’s commerce ministry is responsible for trade policy but not for exchange rate policy, which is the domain of the RBI. The central bank does, however, consult with the finance ministry on its exchange rate policy.

Commerce Minister Nirmala Sitharaman also tweeted saying she had not told a reporter the government was discussing a devaluation but did not deny whether the ministry was mulling such a proposal to the government.

Sitharaman, who does not hold cabinet rank and is not widely recognized as a policy authority outside her area of responsibility, recently called on the RBI to cut interest rates by two percentage points.

Those remarks came at a sensitive time, as the RBI is under a new chief, former deputy governor Urjit Patel, and a key new body – a six-member Monetary Policy Committee – has yet to be appointed.

Three of the MPC’s members would be “external” candidates. A replacement as deputy governor has yet to be chosen, and it is possible Patel could find himself heading a panel with dovish leanings.

Government officials say the MPC, in which the RBI governor has the casting vote in the event of a tie, should be staffed up in time for Patel’s first policy meeting on Oct. 4.

A drop in inflation last month to just over 5 percent – in line with the RBI’s near-term target – has opened the door to a possible rate cut next month or in December, say economists.

The Indian rupee has been one of worst performers in Asia so far this year on subdued dollar inflows and persistent RBI intervention to bolster forex reserves.

Thursday’s sudden fall in the rupee triggered the central bank to call forex dealers to check on their positions, reported Newsrise agency.

India’s export lobby has called loudly for lower interest rates and a weaker rupee to restore the international competitiveness of Asia’s third-largest economy, whose growth continues to run at just over 7 percent but has been dented by poor export performance.

However, the RBI has been quite adamant it won’t follow such a policy, instead letting market forces decide the currency movement and only intervening to contain any sharp volatility.

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TIE Institute Trading Tampa , Oil rises on smaller-than-expected build in U.S. crude stocks

Oil prices rebounded on Wednesday after falling by as much as 3 percent in the previous session, as data from an industry group showed a smaller-than-expected build in U.S. crude stockpiles.

The American Petroleum Institute (API) reported a crude build of 1.4 million barrels for the week ended Sept. 9, smaller than the 3.8 million barrel rise expected by analysts. The U.S. government will issue official inventory data later on Wednesday.

© Reuters. Refinery workers walk inside the LyondellBasell oil refinery in Houston

Brent crude futures were trading at $47.39 per barrel at 0704 GMT, up 29 cents, or 0.6 percent, from the last settlement.

U.S. West Texas Intermediate futures were up 38 cents, or 0.9 percent, at $45.28 a barrel.

“Long suffering oil bulls will now turn nervously to the U.S. EIA’s commercial crude inventory numbers to be released this evening in New York,” said OANDA’s senior market analyst Jeffrey Halley. “It was an unexpected undershoot in these numbers last week that set off the rally in crude last week.”

The price rally was short lived as crude prices tumbled on Tuesday after the International Energy Agency (IEA) said slowing oil demand growth amid growing inventories and supplies could signal that the market will be oversupplied at least through the first half of 2017.

“Oil came under heavy selling after the IEA released its monthly report showing it expected the surplus in the market to persist well into 2017,” Australian bank ANZ said in a note. “Weaker oil prices are likely to weigh on the sector, with investor appetite remaining weak.”

Gains in crude prices could also be capped by rising crude exports from Libya after the country’s National Oil Corporation (NOC) said on Tuesday it would immediately start working to resume crude exports from ports seized in recent days by forces loyal to eastern commander Khalifa Haftar.

Libyan production could be raised to 600,000 barrels per day (bpd) from about 290,000 bpd within a month, further adding to the global crude supply glut.

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Oil prices fall as U.S. drillers add rigs, traders cut long positions – TIE Institute in Tampa

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© Reuters. Rigging equipment is pictured in a field outside of Sweetwater Texas

Crude prices fell over 1.5 percent on Monday after U.S. oil drillers added rigs and producers adapt to cheaper crude, with speculators cutting positions betting on further price hikes.

International benchmark Brent crude oil futures (LCOc1) were trading at $47.19 per barrel at 0645 GMT (02:45 a.m. EDT), down 82 cents, or 1.71 percent, from their previous settlement.

U.S. benchmark West Texas Intermediate crude futures (CLc1) were down 86 cents, or 1.87 percent, at $45.02 a barrel.

Traders said the price falls on Monday and Friday were a result of increasing oil drilling activity in the United States, which indicated that producers can operate profitably around current levels.

“The idea that we will continue to bounce off the $50 per barrel handle is proving correct,” said Matt Stanley, fuel broker, Freight Investor Services (FIS) in Dubai, pointing toward “the dynamic of shale oil” as the main reason to have pulled prices back down.

“Each dollar is being used far more efficiently and, as a result, $50 oil appears much more palatable,” Barclays (LON:BARC) bank said in a note to clients.

U.S. drillers added oil rigs for a tenth week in the past 11, according to a Baker Hughes rig count report on Friday. It was the longest streak without rig cuts since 2011.

Oil’s near six-percent price decline since Sept. 8 partly reverses a 10-percent rally seen early in the month to around $50 per barrel.

The market was also under pressure from expectations of another flood of refined product exports from China later this year, as demand in Asia’s biggest economy and oil consumer stutters.

Speculative oil traders also became less confident of higher oil prices, cutting their net long U.S. crude futures and options positions for a second consecutive week last week, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Traders said they were still eyeing statements regarding a potential freezing of oil output closely, although a broad agreement to meaningfully rein in oversupply was not currently expected.

Even if exporters agree on freezing output around current levels, analysts said that would do little to raise prices as most exporters are pumping out oil at or near record levels, and have adapted to do so at lower prices.

“Producers and service companies … are well positioned to return to growth mode at much lower prices,” Barclays said.

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Gold prices flat in Asia on profit taking as Fed rate hike views dip – TIE Institute

Gold prices held mostly steady in Asia on Wednesday as investors took profits after a rally spurred by diminished expectations for a Fed rate hike this month.

Gold for December delivery on the Comex division of the New York Mercantile Exchange traded between small gains and losses around $1,353.75 a troy ounce.

Overnight, gold prices extended gains from Europe’s session in North American trade on Tuesday, touching a more than one-week high amid reduced expectations that the Federal Reserve will raise interest rates at its policy meeting later this month.

According to Investing.com’s Fed Rate Monitor Tool, investors are pricing in an 18% chance of a rate hike at the Fed’s September 20-21 meeting in wake of last week’s disappointing U.S. employment data.

© Reuters.  Gold mostly flat in Asia

Investors returning from the long Labor Day weekend looked ahead to fresh economic data for more hints on the timing of a U.S. rate hike.

The U.S. Institute of Supply Management released data on August service sector activity that came in at 51.4, well below the 55.0 expected.

The data takes on extra importance after the ISM manufacturing survey published last week showed a shocking contraction in activity.

While expectations for a near-term rate hike have been scaled back, investors still believe the Fed will hike rates at least once before the end of the year, most likely in December.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.

 

Crude oil futures – weekly outlook: July 11 – 15 – TIE Institute

Oil futures ended Friday’s session close to two-month lows as concerns over the global economic outlook combined with data showing that the U.S. oil rig count rose for the fifth time over the past six weeks weighed.

On the ICE Futures Exchange in London, Brent oil for September delivery fell to an intraday low of $46.15 a barrel, a level not seen since May 11, before recovering to settle at $46.76 by close of trade, up 36 cents, or 0.78%.

Despite Friday’s gains, London-traded Brent futures dropped $3.84, or 7.13%, on the week, its worst weekly performance since mid-January, amid growing anxiety over the economic impact of Britain’s vote to leave the European Union.

The news sparked concerns that Europe will fall back into recession, putting more pressure on the global economy and undermining future oil demand prospects.

Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in August advanced 27 cents, or 0.6%, to end at $45.41 a barrel, after slumping to $44.77 earlier in the session, the lowest since May 11.

For the week, New York-traded oil futures sank $3.70, or 7.31%, its biggest weekly loss in almost six months, amid signs of an ongoing recovery in U.S. drilling activity.

Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. increased by 10 last week to 351, marking the fifth increase in six weeks.

The renewed gain in U.S. drilling activity fueled speculation that domestic production could be on the verge of rebounding in the weeks ahead, underlining worries over a supply glut.

According to the U.S. Energy Information Administration, crude oil inventories declined by a less-than-expected 2.2 million barrels last week to 524.4 million, which the EIA considered to be “historically high levels for this time of year”.

© Reuters.  Oil futures book weekly loss of more than 7%

In the week ahead, oil traders will be focusing on U.S. stockpile data on Tuesday and Wednesday for fresh supply-and-demand signals.

Meanwhile, investors will keep an eye out for monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to gauge global supply and demand levels.

Market players will also continue to monitor supply disruptions across the world for further indications on the rebalancing of the market.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Tuesday, July 12

The Organization of Petroleum Exporting Counties will publish its monthly assessment of oil markets.

The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.

Wednesday, July 13

The International Energy Agency will release its monthly report on global oil supply and demand.

The U.S. Energy Information Administration is to release its weekly report on oil and gasoline stockpiles.

Friday, July 15

Baker Hughes will release weekly data on the U.S. oil rig count.

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Gold extends rally to hit 3-month peak on dollar, Fed rate outlook – TIE Institute

Gold futures rose for the fourth straight session on Wednesday to hit a three-month high as a broadly weaker U.S. dollar coupled with ongoing expectations that the Federal Reserve will hold off on hiking interest rates until 2016 boosted the appeal of the precious metal.

Gold for December delivery on the Comex division of the New York Mercantile Exchange hit an intraday peak of $1,174.50 a troy ounce, the highest level since June 30, before trading at $1,173.00 during European morning hours, up $7.60, or 0.65%. A day earlier, gold inched up 90 cents, or 0.08%.

Prices of the precious metal have been well supported in recent sessions amid reduced expectations that the Federal Reserve will hike interest rates before the years end.

A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn’t offer investors any similar guaranteed payout.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed near a three-and-a-half week low.

Investors were looking ahead to U.S. economic reports on retail sales and producer price inflation later in the day for further clues as to the future path of interest rates.

The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.

© Reuters.  Weak dollar, delayed Fed rate hike outlook boost gold to 3-month high

Elsewhere in metals trading, copper for December delivery on the Comex division of the New York Mercantile Exchange tacked on 0.1 cents, or 0.03%, to hit $2.389 a pound during morning hours in London.

Government data released earlier showed that Chinese producer prices fell 5.9% in September, the 43rd straight monthly decline and matching the worst reading since October 2009.

Consumer prices rose 1.6% last month, below expectations for 1.8% and down from 2.0% in August.

The soft inflation data added to speculation policymakers in Beijing will have to introduce further stimulus measures to boost growth.

Trade data on Tuesday revealed that China’s imports shrank far more than expected in September, falling for the 11th straight month. A slowdown in domestic demand indicated a recovery in the broader economy remains fragile and may need further government stimulus.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

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NYMEX crude down in Asia as investors take profits on last week’s gains – TIE Institute

Crude oil prices dipped in Asia on Monday as investors took advantage of U.S. gains last week.

On the New York Mercantile Exchange, crude oil for delivery in November fell 0.98% to $45.25 a barrel.

Last week, West Texas Intermediate oil futures rose sharply on Friday, amid indications U.S. oil drillers are cutting back on production following a collapse in prices over the summer.

Industry research group Baker Hughes (NYSE:NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. decreased by four last week to 640, the fourth straight weekly decline.

A lower U.S. rig count is usually a bullish sign for oil as it signals potentially lower production in the future.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for November delivery tacked on 43 cents, or 0.89%, to close the week at $48.60 a barrel.

Crude oil prices have been under heavy selling pressure in recent months, as ongoing worries over the health of the global economy fueled concerns that a global supply glut may stick around for longer than anticipated.

© Reuters.  NYMEX crude weaker in Asia on profit taking

Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.

Federal Reserve Chair Janet Yellen said after markets closed on Thursday that she expected the central bank to begin raising rates later in 2015, as long as inflation remained stable and the U.S. economy was strong enough to boost employment.

In the week ahead, investors will be focusing on Friday’s U.S. jobs report for September, which could help to provide additional clarity on the likelihood of a near-term interest rate hike.

Market participants will also be watching Wednesday’s euro zone inflation report amid concerns that the European Central Bank could ramp up its monetary stimulus program.

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Gold down in Asia as China data seen prompting policy response – TIE Institute

Gold prices eased in Asia on Monday at the start of a week that could see the Federal Reserve raise interest rates at a time of mixed economic fortunes for growth in China.

In China at the weekend, data showed fixed asset investment rose 10.9%, just below the 11% seen, while industrial production gained 6.1%, below the 6.4% expected and retail sales rose 10.8%, above the 10.5% seen.

Gold for December delivery on the Comex division of the New York Mercantile Exchange fell 0.20% to $1,105.70 a troy ounce, while silver futures for December delivery declined 0.38% to $14.530 a troy ounce.

Elsewhere in metals trading, copper for December delivery dropped 0.48% to $2.446 a pound.

For the week, copper prices surged 13.6 cents, or 6.12%, as a fresh batch of disappointing Chinese economic data reinforced views that policymakers in Beijing will have to roll out more support measures for the world’s second largest economy.

© Reuters.  Gold  weaker in Asia after China data

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Last week, gold ended weaker as investors remained mixed over whether the U.S. central bank will hike rates at its meeting next Wednesday and Thursday.

Some traders believe the Fed could postpone raising interest rates this month, as officials are likely to remain concerned over volatility in financial markets due to fears over a China-led global economic slowdown.

Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Federal Reserve will raise interest rates for the first time since 2006 at some point this year.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

NYMEX crude weaker in Asia with U.S. markets shut for holiday – TIE Institute

Crude oil prices eased in Asia on Monday and markets thin with a holiday ahead in the U.S. and Canada.

On the New York Mercantile Exchange, crude oil for delivery in October fell 0.73% at $45.72 a barrel.

Chinese stock markets were closed on Thursday and Friday for the World War Two Victory Day parade and will reopen Monday, while U.S. markets will be closed on Monday for the Labor Day holiday.

Last week, crude oil futures fell on Friday, as worries over the health of the global economy added to the concerns that a global supply glut may stick around for longer than anticipated.

On the ICE Futures Exchange in London, Brent for October delivery tumbled $1.07, or 2.11%, to close at $49.61 a barrel. For the week, London-traded Brent futures lost 44 cents, or 0.88%, amid fears of a China-led global economic slowdown.

© Reuters.  NYMEX crude weaker in Asia

Industry research group Baker Hughes (NYSE:NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. decreased by 13 last week to 662, the first weekly decline in seven weeks.

Meanwhile, data in the U.S. on Friday showed that the economy added fewer jobs that expected last month, despite a decline in the unemployment rate.

The Labor Department reported that the U.S. economy added 173,000 jobs in August, below forecasts for an increase of 220,000 and slowing from gains of 245,000 a month earlier.

However, the unemployment rate dropped from 5.3% to 5.1%, better than expectations for 5.2% and the lowest since April 2008.

The jobs report failed to provide much clarity on when the Federal Reserve will decide to raise short term interest rates.

China’s slowing economy and global market volatility have created fresh uncertainty over whether the U.S. central bank will start hiking interest rates later this month.

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Gold / Silver / Copper futures – weekly outlook: August 31 – Sept. 4 – TIE Institute

Gold futures edged higher on Friday, but still ended the week down more than 2% amid expectations the Federal Reserve will start raising interest rates at its next policy meeting in September.

Comments by Federal Reserve Vice Chairman Stanley Fischer on Friday suggested that the door was still open for a rate hike at the Fed’s next meeting due to take place September 16-17.

Fischer said that the case for a rate increase in September was “pretty strong”, though it was still too soon to say what the central bank might do.

The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

Gold for December delivery on the Comex division of the New York Mercantile Exchange tacked on $11.40, or 1.02%, to end Friday’s session at $1,134.00 a troy ounce.

For the week, prices of the precious metal dropped $26.20, or 2.21%, the worst weekly loss in about a month.

Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates in September for the first time since 2006.

Gold futures end the week down 2.2% amid Fed rate hike outlook

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, inched up 0.4% on Friday to close at 96.15, the strongest level since August 20.

The index rose 1.2% on the week as upbeat U.S. economic data fanned expectations that the Fed will raise interest rates next month.

Also on the Comex, silver futures for September delivery advanced 11.8 cents, or 0.82%, on Friday to settle at $14.53 a troy ounce by close of trade. Prices plunged to $13.91 on Wednesday, a level not seen since August 2009.

On the week, silver futures tumbled 81.0 cents, or 5.01%, the biggest weekly decline since mid-February.

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