CRUDE OIL PRICE RISES AS RIGS DECLINE
The price of crude oil rallied today as investors cheered a Baker Hughes report that found US drillers had started to reduce their rigs. On Friday, the data showed that rigs decreased from 877 to 873. The total oil and rig count, which includes the natural gas rigs decreased from 1075 to 1071. This was the first time the rig counts had decreased in a number of months. This data came a few days after EIA and API data showed that the number of crude inventories had slumped. However, investors are still concerned about the state of supply and the fact that global demand is expected to reduce in the coming year.
The euro rose against the USD even as the inflation numbers from the EU weakened. The headline CPI rose by 1.9%, which was lower than the expected 2.0%. CPI ex tobacco rose by 1.9%, which was lower than the estimated 2.1%. The closely-watched core CPI decreased by minus 0.3%, which was lower than the estimated minus 0.2%. On an annualized basis, the core CPI remained unchanged at 1.0%. Investors are still concerned about the status of the EU economy even as the ECB prepares to end QE this month.
World stocks declined today as traders continued to worry about trade and economic growth. In the US, the Dow, S&P and Nasdaq futures were set to open 75, 7 and 16 points lower. This is after the three main indices ended the day in a correction territory on Friday. In Europe, the DAX and FTSE were lower by 75 and 40 points respectively while in Asia, stocks were mixed with Shanghai Composite and Nikkei gaining by 5 and 132 points respectively while Hang Seng lost by 7 points.
The EUR/USD pair rose to an intraday high of 1.1352 today mostly because of the general weakness of the USD. On the hourly chart, the current price is above the 25-day and 50-day EMA. The RSI has moved from below 30 and is currently at 62. The pair appears to have toped as evidenced by the shooting star pattern shown below. There is therefore a likelihood that the pair will start falling. However, in the next few days, the pair could exhibit some volatility ahead of the Fed decision.
The XBR/USD pair rose today after bullish data from Baker Hughes. The pair reached a high of 61.20. In the past few days, it has continued to trade in a sideways direction as traders wonder about the next moves. On the hourly chart below, the pair’s price is along the 25-day and 50-day EMA. With worries about supply and demand, the pair is unlikely to maintain the upward momentum.
The Nikkei index declined today to an intraday low of ¥21311. This was the lowest level since Friday. This price is below the 100-day and 50-day EMA as shown in the chart below. The RSI has fallen from 60 to the current 37 while the MACD remains near the neutral level. Tomorrow, the index will likely open depending on how Wall Street will end the day today. If it ends higher, Japan’s stocks may open the day higher.