Forex News from InstaForex

[IFX Gertrude]

Oil Surges as OPEC Strikes Production Cut Deal



OPEC members managed to reach a deal to cut oil output, causing crude prices to jump more than 8% after months of struggling with declines due to market uncertainty regarding the capability of the group to reach an agreement.

The deal was made possible when Saudi Arabia and Iran, whose disputes blocked the deal which looked to end the oil glut persisting in the market, reached a compromise. Iran was allowed to raise its production, while Saudi Arabia conceded to take the lion's share of the cuts.

The oil producer cartel announced that it would reduce production by 1.2 million barrels per day from its current level of 33.6 million bpd beginning January 2017. It also expects producers who are non-OPEC members, including Russia, to join the cuts adding up to 600, 000 bpd.

The cuts were bigger than anticipated and equals around 1% of total global production. Oil prices soared and shares of oil companies surged more than 10% after the agreement was confirmed.

U.S. crude rose $4.21 or 9.3% and traded at $49.44 per barrel. Meanwhile, global benchmark Brent crude rose $4.09 or 8.8% and settled at $50.47.

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[IFX Gertrude]

Japan Monetary Base Climbs 21.5% In November



The monetary base in Japan was up 21.5 percent on year in November, the Bank of Japan said on Friday - coming in at 417.657 trillion yen.

That follows the 22.1 percent spike in October.

Banknotes in circulation added 4.7 percent on year, while coins in circulation gained 1.0 percent.

Current account balances surged an annual 28.2 percent in November, including a 26.8 percent jump in reserve balances.

The adjusted monetary base soared 26.0 percent to 412.167 trillion yen, after rising 17.9 percent a month earlier.

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[IFX Gertrude]

Dollar Edges Down after Solid November Gains



The dollar slipped against a basket of currencies, with traders booking gains after a positive November on speculation of a stronger U.S. economy under the administration of Trump and ahead of the government payrolls report. The dollar index was down 0.4 percent to 101.06.

The pound climbed as much as nearly 1.6 percent to a three-week peak against the U.S. currency of $1.2696. The dollar retreated from a previous nine-month high against the yen at 114.82, before slipping 0.4 percent to 114.03 yen in late trading. The euro firmed after a report that the European Central Bank will continue its bond buying beyond next March and has considered to send a formal signal next week that the asset purchase program will sometime end. The dollar's weak beginning in December mirrored higher U.S. Treasury yields after a positive data on manufacturing and construction spending.

The dollar index hit a 13-1/2-year high of 102.05 the previous week, and for November it advanced 3.1 percent. The euro rose 0.6 percent at $1.0649.

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[IFX Gertrude]

China Services PMI Jumps To 53.1 In November - Caixin



The services sector in China continued to expand in November, and at a faster pace, the latest survey from Caixin showed on Monday with a PMI score of 53.1.

That's up from 53.4 in October, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

The survey also showed that the composite index was unchanged at 52.9.

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[IFX Gertrude]

British Government Unveils $634 Billion Infrastructure-Investment Plan



The U.K. mapped out its infrastructure-investment plan, disclosing 500 billion pounds or $634 billion worth of projects slated to be launched in the following years.

Government investment constitutes around 40% of the infrastructure-investment pipeline after British Finance Minister Philip Hammond detailed plans for a National Productivity Investment Fund in November estimated to amount to 23 billion pounds. Infrastructure projects included are the Thames Tideway Tunnel, smart meters and upgrading the A14 highway located in eastern England.

Funding from the private represents more than half of the pipeline to 2020-2021, aiding in delivering projects varying from transport and internet connectivity to flood defenses and housing, according to the Treasury.

In a statement, Treasury Chief Secretary David Gauke said the spending plan is a clear indication that the government is intent on ensuring that U.K.'s infrastructure is up to date.

Enhancing productivity using targeted investments was the major goal laid out by Hammond during his Autumn Statement as he readies the British economy from any Brexit-induced shocks.

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[IFX Gertrude]

Australia Q3 Current Account Deficit A$11.358 Billion



Australia's seasonally adjusted current account deficit narrowed to A$11.358 billion in the third quarter of 2016, the Australian Bureau of Statistics said on Tuesday - owing to higher export commodity prices.

That follows the A$15.943 billion shortfall in the three months prior.

The balance on goods and services marked a deficit of A$4.682 billion following the A$7.381 billion shortfall in Q2.

Net exports of GDP eased 0.2 percent, unchanged from the previous quarter. The net goods and services surplus fell A$871 million (61 percent) to A$561 million.

Exports of goods and services climbed A$2.860 billion (4 percent) and imports of goods and services gained A$162 million. The primary income deficit fell A$1.946 billion (24 percent).

Australia's net international investment position was a liability of A$1,043.3 billion at 30 September 2016, increasing 1 percent on the revised 30 June 2016 position of A$1,037.9 billion.

Australia's net foreign debt liabilities increased A$0.8 billion to a net liability position of A$1,048.5 billion.

Australia's net foreign equity assets tumbled A$4.6 billion (47 percent) to a net asset position of A$5.2 billion.

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[IFX Gertrude]

Oil Prices Retreat as Supply Rises Ahead of 2017 Production Cut



Oil prices fell in early Asian trading as crude production in almost all major export regions despite a planned production cut by OPEC and Russia, raising fears that an oil glut that has persisted in the market for more than two years might extend into its third year in 2017.

International Brent crude oil futures traded down 39 cents at $54.44 per barrel, declining 0.7% from their last finish. Meanwhile, the U.S. WTI crude futures were down 47 cents or 0.9%, at $51.32 a barrel.

Traders said the decline in prices were caused by the increasing production from OPEC and Russia. The producer cartel's production has posted another record high in the previous month, scaling to 34.19 million bpd in November from the 33.82 million bpd in October. On Friday, Russia said its average daily production reached 11.21 million bpd last month, its highest daily output in nearly three decades.

Their combined output alone attributed for almost half of total global oil demand, which is currently at the 95 million bpd level.

The alarmingly high production figures comes just after OPEC and Russia struck a historic deal to cap output in 2017 which caused oil prices to rally, causing investors to worry that the planned cut will not be big enough to dent the oil glut.

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[IFX Gertrude]

Fxwirepro: Eur/krw Rejects Key Resistance at 1,260 Mark, Downside Limited



EUR/KRW is currently trading around 1,253 mark.
Pair made intraday high at 1,255 and low at 1,252 levels.
Intraday bias remains slightly bearish till the time pair holds immediate resistance at 1,254 mark.
A sustained close above 1,254 will take the parity higher towards key resistance around 1,260, 1,269 and 1,272 marks respectively.
Key supports are seen at 1,248, 1,242, 1,238, 1,227, 1,222 and 1,210 marks respectively.
Seoul shares open up 0.29 pct.
We prefer to go long on EUR/KRW around 1,250, with stop loss at 1,242 and target of 1,260/1,268/1,272.

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[IFX Gertrude]

Oil Sinks on Skepticism Supply Cut Will Be Big Enough to End Glut



Prevailing apprehension that a planned crude output cut by OPEC and Russia would be strong enough to end the two-year oil glut in the market pulled down oil prices on Wednesday.

Benchmark Brent crude oil futures traded down 24 cents or 0.45% at $53.69 per barrel, while U.S. WTI crude futures slipped 19 cents or 0.37% from their last finish at $50.74 per barrel.

Oil prices rallied as high as 19% after OPEC and Russia struck a deal to jointly limit output in 2017 in a move to support the oil market.

However, skepticism have since surfaced about whether the planned production cuts will be strong enough to end oversupply as both parties involved in the agreement reported record production volumes in the previous month.

With virtually almost every crude exporting region producing at record amounts, there is persisting skepticism in the market how both parties will be able to commit to the Vienna production cut targets, analysts said, adding that the higher their production, the higher the starting point of the cut will be.

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[IFX Gertrude]

China CPI +2.3% On Year In November



Consumer prices in China were up 2.3 percent on year in November, the National Bureau of Statistics said on Friday.

That exceeded expectations for 2.2 percent and was up from 2.1 percent in October.

On a monthly basis, inflation added 0.1 percent after easing 0.1 percent a month earlier.

The bureau also said that producer prices surged an annual 3.3 percent versus forecasts for 2.3 percent following the 1.2 percent gain in the previous month.

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