Japan GDP unexpectedly accelerates in first quarter as firms boost investment

 By Tetsushi Kajimoto and Leika Kihara

TOKYO (Reuters) - Japan's economy expanded much faster than initially expected over January to March as companies ramped up capital investment, underscoring the central bank's view that recovery from last year's recession is gaining momentum.

The economy grew an annualised 3.9 percent in the first three months of this year, Cabinet Office data showed on Monday, handily beating a preliminary estimate of a 2.4 percent gain, and topping a median market estimate for 2.7 percent growth.

"This is a pretty positive figure and shows the recovery is picking up pace," said Takeshi Minami, chief economist at Norinchukin Research Institute.

"Non-manufacturers are boosting spending on expectations that private consumption will recover, so this should serve as a key driver of growth," he said.

Capital spending rose 2.7 percent from the previous quarter, much more than a preliminary estimate of 0.4 percent growth and bigger than a 2.3 percent expansion projected in a Reuters poll.

Taking advantage of a weak yen (JPY=), a number of Japanese manufacturers are shifting production back to Japan from China and elsewhere. Panasonic has pulled back some production of room air-conditioners and Canon 7751.T has repatriated some output of high-end copiers.

Analysts say record profits and ample cash have finally started spurring firms such as industrial robot maker Fanuc Corp to increase capital investment.

SERVICE-SECTOR INVESTMENT ON THE RISE

The data is welcome news for the government and the Bank of Japan, which are hoping that expectations of a steady economic recovery will spur companies and households to boost spending.

A pick-up in capital expenditure is key for the success of premier Shinzo Abe's stimulus policies, which aim to reflate the economy out of stagnation by changing companies' perception that deflation will persist.

"The Japanese economy is returning to growth orbit," Abe's spokesman Yasuhisa Kawamura told reporters on the sidelines of a summit of Group of Seven leaders on Sunday.

The upgrade reflected a Ministry of Finance survey issued last week, which showed corporate capital spending grew in January-March at the fastest pace in a year.

The MOF survey, which is used to calculate revised GDP data, showed a notable increase in non-manufacturers' spending.

Rapid expansion of online and mobile businesses is driving investment on distribution and inventory networks by retailers and wholesalers, while hotels and theme parks are renovating to draw in customers, including foreign tourists attracted by a weak yen.

"Non-manufacturers may also be investing more on automation to meet a shortage of labour," noted Norinchukin's Minami.

(Additional reporting by Ritsuko Ando and Izumi Nakagawa; Editing by Eric Meijer)

Source:https://uk.finance.yahoo.com/news/japan-first-quarter-gdp-revised-000139767.html

Oil prices fall as China's crude imports tumble, OPEC keeps production high

 By Henning Gloystein

SINGAPORE (Reuters) - Crude oil prices fell on Monday as China's oil imports dropped sharply and markets were expected to be increasingly oversupplied following OPEC's decision to keep its production targets unchanged.

China, the world's biggest net oil importer, bought nearly a quarter less crude in May than it did in the previous month, according to official data. Its imports of oil products also fell just over six percent while product exports fell 10 percent.

China's fall in imports came after the Organization of the Petroleum Exporting Countries (OPEC) agreed on Friday to stick to its policy of high output, which stands above 30 million barrels per day, exacerbating worries about a glut in a market where millions of barrels of crude are stored without a buyer.

"Crude demand/supply remains in excess of supplies," said Yasushi Kimura, president of the Petroleum Association of Japan (PAJ) after OPEC's decision.

Front-month Brent futures dropped 38 cents to $62.93 a barrel by 0602 GMT. U.S. crude was at $58.69 per barrel, down 44 cents, and analysts said oil prices would likely fall further.

"The oil market still looks like it is heading for trouble ... Even if year-on-year U.S. supply growth does slow dramatically in Q2, with OPEC producing at 31 million bpd, the oil market surplus, although shrinking in H2, is set to persist for the whole year," Barclays said on Monday.

"This means that global oil stocks, already at record highs, will continue to climb, resulting in further downward pressure on prices and a likely re-widening of Brent’s contango, as the market seeks out increasingly expensive capacity to store the excess crude and products," it added.

OPEC ministers said the group may even exceed the 30 million bpd target, especially if there is rising production and exports from Libya, Iraq or Iran.

"We forecast that Saudi and other low-cost producers will continue to increase output as this is the next logical step to maximizing revenues in the face of shale oil's scalability," Goldman Sachs said, adding that the global oil market would remain oversupplied in 2016.

Adding to the glut, analysts also expect U.S. drilling to start increasing again in the second half of this year following 26 weeks of declines.

Drilling fell after crude prices dropped to six-year lows in January, but a modest recovery and reduced operating costs are allowing U.S. drillers to operate at costs that would have been previously unviable.

(Additional reporting by Osamu Tsukimori in TOKYO; Editing by Alan Raybould and Tom Hogue)

Source:https://uk.finance.yahoo.com/news/oil-prices-fall-chinas-crude-035412285.html

Gold ticks up, but still near 11-week low on U.S. rate outlook

 By A. Ananthalakshmi

SINGAPORE (Reuters) - Gold ticked up on Monday after a three-day losing streak but was still hovering near an 11-week low as a strong U.S. jobs report boosted expectations of a U.S. interest rate rise in September.

Spot gold inched up 0.1 percent to $1,172.86 an ounce by 0647 GMT.

The metal had fallen to $1,162.35 on Friday, its lowest since March 19, after data showed U.S. job growth accelerated sharply in May and wages picked up. Nonfarm payrolls increased 280,000 last month, the largest gain since December.

The report, indicating signs of strong momentum in the U.S. economy, bolstered expectations the Federal Reserve will begin to raise rates in September and sent the dollar to a 13-year peak against the yen.

"The technicals of the markets have deteriorated to such an extent that they will now likely drive precious prices lower, as the theme of a stronger dollar and the imminent rise in U.S. rates again dominate sentiment," said INTL FCStone analyst Edward Meir.

Higher U.S. rates could diminish demand for non-interest-paying bullion, while a stronger dollar makes gold more expensive for holders of other currencies and reduces the metal's safe-haven appeal.

Investor positioning in bullion continued to reflect bearish sentiment.

Further outflows were seen in SPDR Gold Trust, the world's top gold-backed exchange-traded fund, with holdings dropping 0.17 percent to 708.70 tonnes on Friday, the lowest since mid-January.

Hedge funds and money managers cut net long positions in gold and silver in the week ended June 2, U.S. Commodity Futures Trading Commission data showed on Friday.

"Gold ETF holdings are near their 2015 lows and seem to be contributing to gold's gradual decline since mid-May," said MKS Group trader James Gardiner. "Higher bond yields and a stronger dollar are also continuing to put pressure on the metal."

Benchmark 10-year U.S. Treasury yields posted their steepest weekly jump in nearly two years on Friday after the jobs report.

The next major support level for gold is around the March low of $1,142, although there are also signs of strong support in the mid-to-low 60s, he said.

In mining news, South Africa's Association of Mineworkers and Construction Union said on Sunday it would launch a wildcat strike if its rival union and gold mining companies impose a wage deal on its members.

Strikes could potentially lower production levels and lend support to prices.

(Reporting by A. Ananthalakshmi; Editing by Richard Pullin and Alan Raybould)

Source:https://uk.finance.yahoo.com/news/gold-ticks-holds-near-11-035608194.html

FB - Technical Analysis

Technical Indicators (Daily)



Source:http://lusitanianstraders.blogspot.pt/2015/06/fb-technical-analysis_3.html

Japan stocks retreat, euro higher as Greece deadline looms

Japanese shares extended losses Wednesday after ending a 12-day rally in the previous session, while the euro edged higher following upbeat eurozone inflation data as traders track Greece's debt reform talks ahead of a repayment deadline.

Tokyo retreated 0.42 percent in the morning, Sydney lost 0.52 percent and Shanghai eased 0.10 percent, but Hong Kong added 0.91 percent and Seoul was 0.29 percent higher.

Dealers moved out of Japanese equities for a second day after the Nikkei chalked up an impressive rally not seen since 1988, at the height of the country's stock market bubble.

Selling was fuelled by a pick-up in the yen, which on Tuesday hit its weakest level against the dollar in more than 12 years.

The greenback fell with US stocks on Wednesday owing to concerns about the lack of progress in Greece's talks with its creditors on overhauling its bailout terms.

The Dow lost 0.16 percent, the S&P 500 dipped 0.10 percent and the Nasdaq shed 0.13 percent.

On currency markets the dollar was at 123.93 yen early Wednesday against 124.09 in New York. The greenback briefly touched 125.05 yen in Asia Tuesday.

The euro bought $1.1168 and 138.43 yen from $1.1152 and 138.39 yen in US trade.

With a deadline for Greece to repay some of its debt on Friday, the country's leaders and its creditors have exchanged reform proposals, although there are still fears an agreement may not be reached.

Investors were spooked Tuesday when Jeroen Dijsselbloem, the head of the Eurogroup of finance ministers said he was unimpressed with progress.

His remarks come as Greek Prime Minister Alexis Tsipras prepares to meet European Commission President Jean-Claude Juncker in Brussels on Wednesday evening.

There are worries that if Greece defaults on its debts the country could end up tumbling out of the eurozone.

"The euro clearly has the ability to lead the dollar higher or lower across the board, and really that vulnerability stems from very different potential outcomes you get from the negotiations between Greece and its creditors," Raiko Shareef, a markets strategist at Bank of New Zealand, told Bloomberg News.

The single currency was also boosted by data showing eurozone inflation climbed to 0.3 percent in May -- the first rise in five months and raising hopes the region is recovering -- while Germany and Spain released solid labour reports.

The results came ahead of Wednesday's meeting of the European Central Bank and a subsequent news conference with ECB Chief Mario Draghi.

Oil prices slipped after sharp gains on Tuesday fuelled by the weaker dollar. US benchmark West Texas Intermediate for July delivery fell 36 cents to $60.90 while Brent crude for July eased 32 cents to $65.17.

Gold fetched $1,194.06 compared with $1,190.90 late Tuesday.

Source:https://uk.finance.yahoo.com/news/japan-stocks-retreat-euro-higher-030145335.html

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Australia's economy strengthens, but growth challenges remain

 By Glenda Kwek

Australia's economy was stronger-than-expected in the first quarter of the year as exports and consumer spending boosted growth, data showed Wednesday, reinforcing a decision to keep interest rates on hold after two cuts this year.

The mining-driven economy grew by 0.9 percent in the first three months of 2015, above analysts' expectations of 0.7 percent, to take the annual rate of growth to 2.3 percent, Australian Bureau of Statistics figures showed.

The quarterly growth was an increase from 0.5 percent in the October-December period last year and 0.3 percent in the July-September quarter. But year-on-year growth slowed from 2.5 percent in the last three months of 2014.

"This is a good, solid result," Treasurer Joe Hockey told reporters, adding that the expansion was "broad-based".

"Exports continue to support our economy, growing by five percent, and this is the strongest quarterly result in 15 years... There is growth in areas such as tourism, education and professional services."

The Australian dollar jumped a third of a US cent to 78.06 US cents after the data was released.

The figures came a day after the Reserve Bank of Australia kept interest rates steady at a record-low 2.0 percent after cuts of 50 basis points so far this year.

"It's a good number but it's not a game changer for us or the RBA," JP Morgan economist Tom Kennedy told AFP.

"It's just more evidence that the Australian economy is now relying on net exports but growth is recovering after a very weak 2014. We think this year will be better and we think next year is going to be better again."

Australia's economy is transiting away from mining-led growth after an unprecedented boom in resources investment that has help it avoid a recession for more than two decades.

The mining boom is shifting towards the exports stage, as the figures showed. But the move towards non-resources-led growth has been shaky, with such industries yet to fill the gap left by the China-fuelled mining surge.

Exports added 1.1 percentage points to GDP growth in the first quarter after jumping by five percent. Household spending increased by 0.5 percent to contribute 0.3 percentage points to GDP.

Non-dwelling construction fell the most, dropping by 4.9 percent during the January to March period to subtract 0.4 percentage points from GDP.

- Weak income figures -

Despite the strong headline figures, the income side of the economy remained weak.

Nominal GDP, which is not adjusted for inflation, rose by 0.4 percent for the quarter for an annual rate of 1.2 percent. Real net national disposable income -- a measure of the nation's earnings and which factors in the terms of trade -- lifted by 0.2 percent quarter-on-quarter to be 0.2 percent lower for the year.

The soft figures were a reflection of the weakening terms of trade, a ratio that measures export prices to import prices, as commodity prices plunge and hurt the resources-dependent economy.

The RBA kept the cash rate on hold Tuesday but warned the economy was continuing to grow below-trend and was "likely to be operating with a degree of spare capacity for some time yet". Annual trend growth is estimated to be about three percent.

National Australia Bank chief markets economist Ivan Colhoun said the Reserve Bank was waiting for more data on the economy's possible recovery.

"They are not cutting interest rates anytime soon just as a general matter of course because they would always look at the impact of their last two cuts, unless the economy is very quickly deteriorating which it isn't at this stage," he told AFP.

"This data suggests that it might not be quite as weak as they've been fearing. But they're also not going to change their mind quickly that mining investment is going to be quite weak next year."

Source:https://uk.finance.yahoo.com/news/australias-economy-strengthens-growth-challenges-030449543.html#

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Gold under pressure despite softer dollar as fund outflows weigh

 By A. Ananthalakshmi

SINGAPORE (Reuters) - Gold eased on Wednesday even as the dollar nursed sharp losses on expectations of a Greek debt deal, with investor sentiment remaining bearish due to outflows from bullion-backed funds.

Spot gold slipped 0.2 percent to $1,191.40 an ounce by 0323 GMT, after gaining 0.4 percent on Tuesday.

Traders said gold's overnight jump was underwhelming given the sharp drop in dollar and weak U.S. factory data, which should have typically triggered strong safe-have bids.

"The move is disappointing considering the very weak dollar environment," said analysts at ScotiaMocatta.

"The gold market continues to move sideways around $1,200 with no indication of which way it should break."

The dollar slid about 1.5 percent in the previous session against a basket of major currencies, and continued to remain under pressure on Wednesday.

The losses were triggered by the strength in the euro after Greece's creditors on Tuesday drafted the broad lines of an agreement to put to the leftist government in Athens in a bid to conclude four months of acrimonious negotiations and release aid before the cash-strapped country runs out of money.

Failure to reach agreement this month could trigger a Greek default and lead to the imposition of capital controls and a potential exit from the euro zone, dealing a serious blow to Europe's supposedly irreversible single currency.

Bullion had gotten some support in recent sessions from the uncertainties over the Greek debt crisis as investors sought safety in the metal.

However, the uptick in prices is being undermined by continuous outflows from gold exchange-traded funds (ETF), a sign that investors are not confident of any price gains.

Holdings in SPDR Gold Trust, the world's largest gold ETF, fell 4.18 tonnes to 709.89 tonnes on Tuesday, the lowest since January.

Holdings in the top eight gold ETFs were at a five-year low, as of Monday.

Markets also continued to await more U.S. economic data, including the monthly non-farm payrolls report on Friday, to gauge the strength of the economy and how it would affect the Federal Reserve's interest rate policy. Higher rates would reduce demand for non-interest-paying bullion.

(Reporting by A. Ananthalakshmi; Editing by Joseph Radford and Richard Pullin)

Source:https://uk.finance.yahoo.com/news/gold-under-pressure-despite-softer-035213311.html

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TWTR - Technical Analysis

Technical Indicators (Daily)

Source:http://lusitanianstraders.blogspot.pt/2015/06/twtr-technical-analysis_2.html

Gold Trades Below $1,200 as Fed Rates Outlook Strengthens Dollar

 Forex Optimum

Gold held below $1,200 an ounce after the dollar climbed to the highest level in more than six weeks amid speculation that the Federal Reserve will raise interest rates this year. Platinum traded near the lowest price since March.

Bullion for immediate delivery was at $1,189.38 an ounce at 3:16 p.m. in Singapore from $1,189.20 on Monday, when it ended 0.1 percent lower after rising to $1,204.42, according to Bloomberg generic pricing. Prices in Shanghai advanced.

Gold dropped for the past two weeks, trimming this year’s advance to 0.4 percent, as the Fed said it’s looking to raise borrowing costs this year. Manufacturing data on Monday added to evidence the U.S. economy can sustain a withdrawal in stimulus. Rising rates reduce gold’s allure because the metal generally offers returns only through price gains, while a stronger dollar typically cuts demand for a store of value.

“Movements in the U.S. dollar in line with recent economic data will continue to dominate gold,” Vyanne Lai, a Melbourne-based economist at National Australia Bank Ltd., said by e-mail. “If U.S. data continues to support the narrative of a recovering economy, the dollar is likely to rally within the short term, thus weighing down on gold.”

The Institute for Supply Management’s factory index rose to a three-month high of 52.8 in May from 51.5 a month earlier, figures from the Tempe, Arizona-based group showed. Among data due this week are May payrolls on Friday.

The Bloomberg Dollar Spot Index, which rose as much as 0.7 percent on Monday to the highest since April 15, retreated 0.3 percent on Tuesday. The gauge versus 10 major currencies added 1 percent last week and 2.6 percent the week before.

ETP Holdings

Investors sold bullion in exchange-traded products for a fourth day, cutting holdings 0.2 percent to 1,599.53 metric tons as of Monday, data compiled by Bloomberg showed. Assets are the smallest since mid-January.

Gold for August delivery was little changed at $1,188.40 on the Comex. Bullion of 99.99 percent purity rose 0.1 percent to 237.10 yuan a gram ($1,189.94 an ounce) on the Shanghai Gold Exchange.

Silver for immediate delivery fell 0.2 percent to $16.7358 an ounce. Spot platinum was at $1,105.78 an ounce after dropping to $1,101.03, the lowest level since March 18. The metal is trading near its cheapest relative to gold since 2013. Palladium was at $773.89 an ounce from $773.70.
information source: http://www.bloomberg.com/

Source:https://www.linkedin.com/pulse/gold-trades-below-1200-fed-rates-outlook-strengthens-dollar-optimum

FOREX-Dollar climbs new peak against yen, Aussie awaits RBA decision

SYDNEY/TOKYO, June 2 (Reuters) - The dollar hovered at fresh 12-1/2 year highs against the yen on Tuesday, having extended a bullish run after upbeat U.S. data helped it crack tough resistance.

Dollar bulls latched onto a survey showing a pick up in U.S. manufacturing activity and construction spending that pushed Treasury yields higher, while discounting less upbeat data on consumer spending.

The U.S. currency came within a whisker of 125.00 yen , reaching highs not seen since late 2002. It last traded at 124.84 and on track for its eighth straight day of gains.

"Some profits were taken on the dollar last weekend, but cash demand remains strong. The feeling in the market is to give 125 yen a try," said Kyosuke Suzuki, director of forex at Societe Generale (Paris: FR0000130809 - news) in Tokyo.

"The rise by the dollar against the yen has been steep but sentiment favours testing new highs rather than consolidating," he said.

Momentum turned bullish for the dollar after it cracked a double-top resistance around 122.00 yen last week.

The next chart hurdle is seen around 125.65-125.73, an area that capped the dollar back in the final months of 2002.

"Despite the speed of the move, we are not looking to fade it - our end year target is still 132," said Elsa Lignos, senior currency strategist, at RBC Capital Markets.

The euro eased to $1.0926, having fallen as low as $1.0887 overnight as it continued to retreat from last week's peak of $1.1006.

Traders said the fact that its decline has been relatively shallow suggested there was some degree of optimism that Greece will ultimately secure a deal and avoid a debt default.

That could also explain why the common currency actually rose on the yen, reaching its highest in over two weeks at 136.62.

The leaders of Germany, France and Greece's international creditor institutions agreed late on Monday to work with "real intensity" in the coming days as they try to clinch a deal in debt negotiations with Athens.

Athens is due to make a 300-million-euro ($327.93 million) repayment to the IMF on Friday amid growing doubts about its ability to meet all this month's financial obligations.

The dollar also gained ground on commodity currencies, with the Australian dollar briefly dipping below 76 U.S. cents for the first time in seven weeks.

It last stood at $0.7630, keeping a low profile ahead of the Reserve Bank of Australia's interest rate decision at 0430 GMT.

While the central bank is considered almost certain to hold its cash rate at a record low 2.00 percent, traders said it will need to give a clear easing bias to discourage Aussie bulls.

"Westpac is expecting a mild easing bias, with the RBA likely to use a phrase such as "scope" for further easing. We also expect the RBA to repeat that "further depreciation (of the AUD) seems both likely and necessary," said Sean Callow, senior strategist at Westpac. (Editing by Shri Navaratnam)

Reuters by Ian Chua and Shinichi Saoshiro

Source:https://uk.finance.yahoo.com/news/forex-dollar-climbs-peak-against-021059418.html

Oil prices stabilize, firm demand counters oversupply

SINGAPORE (Reuters) - Crude oil prices stabilized on Tuesday due to firm demand after dipping in early trade on expectations that OPEC would not cut output at its meeting this week.

The Organization of the Petroleum Exporting Countries (OPEC) meets this Friday in Vienna to discuss its production strategy, with U.S. bank Citi saying the group was likely to maintain current production.

Prices were supported as Saudi oil minister Ali al-Naimi said overnight that demand would pick up and tighten the market in the second half of the year.

"Comments from Saudi Arabian oil minister Ali al-Naimi were characteristically upbeat, acknowledging a current surplus in the market, but anticipating stronger second half demand and an eventual rebalancing of the market," Citi said in a note responding to his comments.

Front-month Brent crude futures fell to a low of $64.71 per barrel on Tuesday, before edging back to $64.85 by 0345 GMT.

U.S. crude was at $60.23 a barrel, up 3 cents from its last settlement and 14 cents above its session low of $60.09 per barrel.

Analysts said that firm refinery demand was also supporting prices.

"Refineries are on the cusp of higher crude runs as we approach 3Q2015. On balance, we think any short-term price weakness will be dissolved by the pickup in end-user demand, higher runs and shrinking U.S. supply growth," JP Morgan said in its latest monthly oil report.

Singapore-based Phillip Futures said that prices would likely fall back later this week as an OPEC decision not to cut production would mean there was "only room for a worsening oversupply".

High production by OPEC, but also from other regions like U.S. shale producers and Russia, has contributed to oversupply and left tankers filled with millions of barrels of oil without buyers.

Saudi Arabia's Naimi was the key architect of OPEC's decision at its last meeting in November 2014 not to cut crude production despite a growing global glut, exacerbated by a boom in U.S. shale oil, triggering sharp oil price falls.

(Editing by Michael Perry and Joseph Radford)

Reuters by Henning Gloystein

Source:https://uk.finance.yahoo.com/news/oil-dips-strong-opec-outlook-025627703.html

Dollar Better Than Gold? Ask Venezuela

By Forex Optimum

Venezuela's recent experience is instructive. The Chavez regime had moved away from the fiat US dollar and had the bulk of its reserves in gold. Last month, Venezuela's reserves had been drawn down to about $19 bln, of which $14 bln was thought to be gold.

Venezuela has found out the hard way that dollars are better than gold. At the end of last month, it swapped 1.4 mln troy ounces of gold for $1 bln with a large US bank.

Venezuela's gold was discounted by a little more than 40% and it will pay interest on the dollars it receives. The swap is four years in duration, and at the end of it, Venezuela has the first right to buy the gold back.

It is true that Venezuela has a relative extreme macro economic situation. The IMF expects the economy to contract 7% this year after 4% contraction in 2014. Inflation is projected to be well over 100% and the fiscal deficit may be 20% of GDP. The black market rate for the bolivar has depreciated by nearly 50% so far this year. We suspect that when push comes to shove, and it will, Venezuela is more likely to officially devalue than default on its local debt.

One of the advantages for Venezuela of the gold swap is that by some accounting it may still count the gold as part of its reserves. This underscores that central bank reserves many not always be what they seem. Central banks have used a number of ploys to hide the extent of their intervention, like operating in the forward market or conducting off-balance sheet operations, like Brazil's currency swaps. Similarly, Russia had included its sovereign wealth funds in its reserve calculations, but they are not liquid or available.

The dollar's status as the primary reserve assets is partly a function the liquidity and depth of the US capital markets. Gold is not a particular liquid or deep market. Countries cannot service their debt with gold. To monetize it, Venezuela is paying a steep price--a 40% haircut plus interest on its dollar 

borrowings.

 Source:https://www.linkedin.com/pulse/dollar-better-than-gold-ask-venezuela-forex-optimum?trk=hb_ntf_MEGAPHONE_ARTICLE_POST

Stocks looking worried as Greece gets closer to the wire

by worldwide-invest

Quick Recap 

Stocks ended the week lower as a combination of a negative print for Q1 US GDP, European concerns about Greece and volatility in Shanghai weighed on sentiment to end the month. What’s going to be interesting is whether the bounce in Shanghai was month end shenanigans (retail market – maybe not) or whether the bulls really do have some fight left in them.

 

The more than 4% range on Friday certainly suggests the bulls aren’t done yet. Equally though this type of volatility is often synonymous with a top. Time will tell.On Greece it seems a deal remains ellusive and the longer we go the more entrenched the positions of the “negotiators” becomes

 

On forex markets the USD dollar had a great week against almost every major currency except the Euro which mysteriously rallied for the latter part of the week. I think its strength will prove ephemeral but I’ll be taking my cues from the charts.

 

Elsewhere gold is becalmed, oil shot higher on a lower US rig count and Dalian iron oire proved maybe that China bulls are still floating around.

 

 On stocks in general it’s worth looking at this piece I’ve written at Business Insider this morning. $111 billion in cash has been pulled out of the US stock market this year yet its still near all-time highs. Danger Will Robinson. 

 

On the day 

This week is a massive one for data and today we get the release of the AIGoup performance of manufacturing survey (Aussie PMI) at 9.30am. TD Monthly Inflation at 10.30 and then company gross profits and building approvals at 11.30. Offshore its HSBC/Markit PMI daya and we get releases from Japan, Korea and China in our timezone before Europe and the US tonight.   German CPI is also out as are personal spending and consumption data in the US along with the original PMI the ISM manufacturing index. Here’s the overnight scoreboard (7.30am AEST):

• Dow Jones down 0.64% to 18,010
• Nasdaq down 0.55% to 5,070
• S&P 500 down 0.63% to 2,107
• London (FTSE 100) down 0.8% to 6,984
• Frankfurt (DAX) down 2.26% to 11,413
• Paris (CAC) down down 2.53% to 5,007
• Tokyo (Nikkei) flattish 20,563
• Shanghai (composite) after a wild rise down 0.15% to 4,613
• Hong Kong (Hang Seng) down 0.11% to 27,424
• ASX Futures Overnight (SPI June) -17 to 5,761
• US 10 Year Bond down 2.12%
• Australian 10 year bond 2.73%
• AUDUSD: 0.7649
• EURUSD: 1.0984
• USDJPY: 124.06
• GBPUSD: 1.5285
• USDCAD: 1.2443
• Crude: $60.28
• Gold: $1,189
• Dalian Iron Ore (September): 422

CHART OF THE DAY:  Can the Euro really keep rallying? 
Personally I can the Euro perhaps extend back to 1.1050 but I can’t see it getting back and through there at the moment. Realistically we are now in the middle of the range but the overall bias looks lower after this consolidation is finished.


 
Friday I said “AUDUSD, finds support. Watch this line. Support is 0.7614. I’ll respect that for the moment and that means the Aussie has satisfied the move we were looking for when it rejected the 0.8150 level and havPersonally I can see the Euro perhaps e been gradually calling.I think it will break lower again after some consolidation.” I hold the same view today.

WorldWide Chart Analysis

Source:http://worldwide-invest.org/content/4356-stocks-looking-worried-greece-closer-wire.html

Oil prices fall as OPEC output seen staying high

  

By Henning Gloystein

SINGAPORE (Reuters) - Crude oil prices dropped on Monday on expectations that OPEC output would remain high after rising in May, stoking worries of oversupply despite declining U.S. rig operations.

Crude oil prices jumped almost 5 percent on Friday, their biggest rally in over a month, as a bigger than expected fall in U.S. oil rigs in operation set off a renewed rush of bullish bets.

But prices eased on Monday due to near-record production in most oil-producing regions, especially the Middle East.

Front-month Brent crude futures (LCOc1) had declined 35 cents to $65.21 (43 pounds) per barrel at 0523 GMT (6:23 a.m.) on Monday. U.S. crude futures (CLc1) were down 45 cents at $59.85 a barrel.

Oil output by the Organization of the Petroleum Exporting Countries (OPEC) likely hit a two-and-a-half year high of 31.22 million barrels per day (bpd) in May and production is not expected to be cut during a meeting of the group this Friday.

U.S. bank Morgan Stanley said that prices could fall in the second half of the year, although it said it was unlikely they would drop back to their six-year lows from January. 

"We have growing concerns about crude fundamentals and prices in 2H15 and 2016 after the quick recovery (since January) ... The market appears complacent about rising OPEC production and upcoming Iran discussions, both of which could more than offset U.S. declines," Morgan Stanley said on Monday.

"That said, retesting YTD (year-to-date) lows is very unlikely. Healthy transport demand, reflected in strong refining margins, capex cuts and low spare capacity should limit downside."

Analysts said that production in the United States also remained on track for year-on-year growth despite recent falls in rigging activity.

"The drop in the U.S. oil rig count resumed last week with 13 rigs idled ... Despite this decline, we believe that should WTI prices remain near $60/bbl, U.S. producers will ramp up activity given improved returns with costs down by at least 20 percent and producers increasingly comfortable at the current costs/revenue/funding mix," Goldman Sachs said.

The bank said that it expected U.S. oil production growth of 155,000 bpd in the fourth quarter of this year compared to the same period in 2014.

(Editing by Michael Perry and Joseph Radford)

 Source:https://uk.finance.yahoo.com/news/oil-prices-fall-opec-output-020153866.html

Asia shares pare losses as China markets rally

 

 By Lisa Twaronite

TOKYO (Reuters) - Asian shares pared earlier steep losses on Monday after Chinese markets rallied as investors focused on some of the bright spots in separate surveys of Chinese factory activity.

Financial spreadbetters expected a brighter start to European trading, with Britain's FTSE 100 (.FTSE) seen opening as much as 0.5 percent higher, Germany's DAX (.GDAXI) 0.4 percent, and France's CAC 40 (.FCHI) up 0.5 percent.

Persistent fears about Greece's financial situation is likely to limit gains, and last week's downbeat U.S. data is seen making investors wary.

MSCI's broadest index of Asia-Pacific shares outside Japan was nearly flat in late afternoon trading, after early dropping to its lowest intraday level since April 7. 

The CSI300 index of the largest listed companies in Shanghai and Shenzhen as well as the Shanghai Composite Index (.SSEC) were both surging more than 4 percent as market participants took stock of the surveys as well as domestic media commentary asserting the bull market has not yet ended.

Major state-backed newspapers carried front-page articles saying despite the tumble on Thursday, when main indexes shed more than 6 percent, the foundations of the bull market remain unchanged.

China's official manufacturing Purchasing Managers' Index (PMI) edged up to 50.2 from April's 50.1, matching the expectations of economists polled by Reuters, but also suggested Beijing might have to take additional steps to spur growth.

The final HSBC/Markit PMI was also released and showed a reading of 49.2 in May, shrinking for a third straight month and below the 50-point level that separates an expansion from a contraction in activity on a monthly basis. The private survey showed export orders contracted at the sharpest rate in nearly two years. 

"The PMI figures, both the official one and the HSBC one, were very close to the consensus view and they can be interpreted as a further normalization in the economy," Gerry Alfonso, director of Shenwan Hongyuan Securities Co, wrote in a note.

A separate official survey of China's non-manufacturing PMI edged down to 53.2, compared to April's 53.4, showing that growth in the country's services industry cooled last month.

Japanese PMI, meanwhile, showed an improvement. The Markit/JMMA final Japan Manufacturing PMI rose to a seasonally adjusted 50.9 in May, unchanged from the preliminary reading but higher than a final 49.9 in April.

Japan's Nikkei stock index (.N225) eked out a tiny gain to give it a 12th straight gaining session, its longest streak sense 1988.

On Wall Street on Friday, major U.S. indexes posted monthly gains but daily losses after the University of Michigan's consumer sentiment marked a drop, while the Institute for Supply Management-Chicago Business Barometer unexpectedly fell.

The U.S. government also revised its first-quarter gross domestic product estimate to show GDP contracted at a 0.7 percent annual rate instead of the 0.2 percent growth pace it estimated last month.

That was slightly better than economists' expectations for a drop of 0.8 percent, but still underscored the fact that the recovery stalled early this year, and the Federal Reserve policymakers might wait longer to raise U.S. interest rates until they have more confidence in the economy's momentum.

The figures weighed on U.S. Treasury yields, curbing the greenback's recent rally against the yen. It stood at 124.20 (JPY=) in early trading, nearly flat on the day and below its more than 12-year peak of 124.46 yen scaled last week.

Greece's woes weighed on the euro, which slipped about 0.4 percent to $1.0951 (EUR=). That helped an index tracking the dollar against a basket of currencies gain about 0.2 percent to 97.114 (.DXY).

Greece and its European creditors agreed on the need to reach a cash-for-reforms deal quickly as Athens missed a self-imposed Sunday deadline for reaching an agreement to unlock aid, sources close to the talks said.

"It's difficult to quantify how much the currency market has factored in the possibility of Greece missing the June 5 repayment deadline," said Shinichiro Kadota, chief Japan forex strategist at Barclays in Tokyo.

"Greek debt yields provide only a rough guide, and although a missed deadline will not spell default, market concern remains high," he said.

In commodities trading, crude oil surged nearly 5 percent on Friday but started the week on a subdued note, as rising OPEC output and an expectation that the group would keep production high added to sentiment that the market remained over supplied despite ongoing falls in U.S. rig operations. 

U.S. crude futures (CLc1) fell about 0.8 percent to $59.85 per barrel, while Brent (LCOc1) shed about 0.5 percent to $65.26.

(Additional reporting by Smauel Shen and Pete Sweeney in Shanghai and Shinichi Saoshiro in Tokyo; Editing by Shri Navaratnam)

Source:https://uk.finance.yahoo.com/news/asia-shares-stumble-china-pmis-020847402.html