Article / 15 June 2017 at 7:00 GMT

Morning Markets: Oil prices get a grip in Asia near 7-month lows

Consulting editor / TradingFloor
Norway







MM TABLE

 


Watchlist

  • New Zealand: GDP (published)
  • Australia: Labour force data (published)
  • Switzerland: SNB monetary policy assessment (0730 GMT)
  • UK: BoE interest-rate announcement (1100 GMT)
  • US: Weekly jobless claims (1230 GMT)
  • US: Industrial production and capacity utilisation (1315 GMT)

Crude oil prices steadied around seven-month lows in Asian trading on Thursday after another steep drop on Wednesday took Brent down to around $47/barrel and WTI below $45/b.

Oil prices slid nearly 4% on Wednesday, to their lowest levels since November, after the US Energy Information Administration data that showed that last week's drop in crude inventories was smaller than expected and US gasoline stockpiles rose unexpectedly.

Asia-Pacific equity markets fell on Thursday, after the US Federal Reserve's quarter-point interest-rate rise on Wednesday and weaker oil prices hit the region's financial and energy shares.

Beleaguered US tech stocks fell again on Wednesday.


Market signals

Asian session

  • US policymakers raise benchmark lending rate for the third time in six months.
  • Yellen confident Fed is on course to hit its 2% inflation goal
  • China's central bank has left interest rates for open market operations unchanged
  • Yield on 10-year Treasury notes rose less than 1bp  to 2.13%
  • Energy and resources had biggest declines on the MSCI Asia Pacific Index
  • Australian benchmark yields lost 5 bps to 2.35%
  • Aussie jobless rate falls to 5.5%, lowest since February 2013
  • Oil prices are close to seven-month lows, with Brent trading at $47.01/barrel
  • New Zealand GDP gained 0.5% from Q1 - 0.7% was expected
  • Nikkei fell 0.27% in choppy trade after weak US data
  • Hang Seng hit heavily, down 0.95% at 0529 GMT
  • ASX was also hit, down 1.18% at of 0553 GMT

Forex ahead

  • JPY was little changed at 109.60 per dollar, after climbing 0.5 percent Wednesday.
  • NZD fell 0.6% as economy grew less than expected in the first quarter
  • AUD in mid trading had shot up more than a third of a cent to US76.27¢

From the Floor

FOMC. “It was less dovish than expected,” says Hardy.

Fed tilt.There was a hawkish tilt, especially through the forward guidance,” says Garnry.

Slower. “We are seeing a slowdown in [oil] production, and that is what we can expect as the price moves back down below $45,” says Hansen.

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

1..2..3
After weaker-than-expected US retail spending, eyes will turn towards initial jobless claims and industrial output, says James Picerno.

Mixed messages
There was a struggle for USD ascendancy last night as US markets didn't quite know what to make of conflicting economic news, writes Michael O'Neill.

Lost shine
The "golden era" in China-UK relations launched with fanfare two years ago is losing its shine with Brexit, and Britain will find itself at the end of the trade queue, writes Pauline Loong.


Janet Yellen

 Fed chairman Janet Yellen was less dovish than expected: Photo: The Fed


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