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Market Wrap
Crude stocks had a draw of nearly -8.000 million barrels per day (b/d) versus an expected -2.340 million b/d, with a slight build in Cushing and a bigger build in Gasoline stocks. The US weekly crude production remained at 10.9 million b/d. On the surface this suggests a higher demand for Oil overall, but the EIA is known to revise these numbers. The US reduced imports by 2.7m b/d and there was a small increase in Gasoline as refineries cranked up demand to 15.2m b/d.
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The WTI chart shows that oil is still very much bullish and will remain so on the 30-minute chart whilst it trades above $65-$64.75. On the Daily chart the rising 50 period exponential moving average is currently sat around the $61 level and I doubt will be tested any time soon. The expectations are for oil to rise until a significant increase in production from OPEC+ is announced and that may not be until June.
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The US dollar index is flat for the day as traders digest the slightly disappointing ISM services PMI data. The report stated, “Business activity expands at fastest pace on record amid marked uptick in client demand” and that “most marked upturns in output and new orders on record. Employment growth accelerates. Cost pressures strongest on record”.
The US non-Manufacturing (PMI) came in under expectations at 62.7 in April which marks a decrease of 1.0 percentage point when compared to March, hinting that the previous month may have been the peak in PMI’s and yields, as the two are currently closely rising and falling together. Inflation worries persist as the prices paid PMI climbed 2.8 points to 76.8. Whereas the US Services PMI beat expectations printing a 64.7 for April.
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The FTSE 100 and European bourses all closed higher today in regular trading hours. In the US, the Nasdaq languished within its initial balance range, while the S&P500 and DJIA made higher prices. Mining companies pushed the FTSE 100 higher, whereas Deutsche Post led the DAX to a 2.0% gain, which nearly unwound all of yesterday’s losses.
In the forex markets, the Antipodeans were able to make gains against the US dollar, but the euro still closed the London session near its day’s lows. The ActivTrader sentiment indicator still has the majority of euro traders short against the US dollar 63% short to 37% long.
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Tomorrow we have data from the Bank of England with the pound looking set to make a break higher if the MPC vote comes in as expected.
