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TSX Consolidates Above 16,000, Energy Stocks Are Hot — Canadian Commentary

Canadian stocks continued to rise Tuesday, with the S&P/TSX Composite Index closing above 16,000 for the second consecutive day.

The TSX Composite was up, a new record high. The modest advance was again powered by gains in the energy sector, while financials edged higher after a healthy check-up from ratings agency Fitch.

Energy stocks jumped 1.3%. Crude oil futures continued to surge Tuesday, with London’s Brent crude touching its highest in two years.

U.S. WTI light sweet crude oil, meanhwhile, added 23 cents to settle at $54.38 a barrel, the highest since February.

Oil prices have surged on speculation OPEC will extend its supply quota deal with Russia. The cartel meets in Vienna November 30. Also, encouraging U.S. economic data raised demand expectations for energy products.

In lackluster economic news, Canada’s real gross domestic product edged down 0.1% in August, after being essentially unchanged in July. Declines in manufacturing and mining, quarrying and oil and gas extraction more than offset increases in most sectors, Statistis Canada said.

Ratings agency Fitch maintained its highest rating on the Canadian banking sector, but singled out CIBC (CM.TO) with a negative outlook due to exposure to risky mortgages.

“Uncertainties remain regarding the potential impact of recent mortgage reform announcements on the broader mortgage market,” Fitch said in a report. “As such, a faster price correction that is prolonged and/or a slowdown in the housing market will likely impact earnings growth for all the banks.

“CIBC has the largest exposure to Canadian consumers at 76.9 percent of total Canadian loans compared to the “Big Six” Canadian banks’ peer average of 66.8 per cent,” Fitch said.

CIBC shares dropped 0.6%.

WestJet (WJA.TO) reported a strong quarterly profit as passenger traffic rose. Shares slipped 0.5%.

The material has been provided by InstaForex Company – www.instaforex.com

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Treasuries Close Nearly Flat Ahead Of Fed Announcement

After moving notably higher over the course of the two previous sessions, treasuries showed a lack of direction during trading on Tuesday.

Bond prices spent the day bouncing back and forth across the unchanged line. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.376 percent.

The choppy trading on the day came as traders looked ahead to the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed is widely expected to leave interest rates unchanged, but traders will be looking for clues about the possibility of a rate hike in December.

Traders may also have been reluctant to make significant moves ahead of the release of the closely watched monthly jobs report on Friday.

Subsequently, the markets shrugged off a report from the Conference Board showing a substantial improvement in consumer confidence in the month of October.

The Conference Board said its consumer confidence index jumped to 125.9 in October from an upwardly revised 120.6 in September. Economists had expected the index to inch up to 121.0 from the 119.8 originally reported for the previous month.

With the much bigger than expected increase, the consumer confidence index reached its highest level since hitting 128.6 in December of 2000.

The Fed announcement is likely to be in the spotlight on Wednesday, overshadowing reports on private sector employment, manufacturing activity, and construction spending.

The material has been provided by InstaForex Company – www.instaforex.com

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Crude Oil On Fire, Brent Hits 2-year High

Crude oil futures continued to surge Tuesday, with London’s Brent crude touching its highest in two years.

December Brent added 47 cents, or 0.8%, to end at $61.37 a barrel, with the contract up about 8% for the month.

U.S. WTI light sweet crude oil, meanhwhile, added 23 cents to settle at $54.38 a barrel, the highest since February. WTI was up 4.7% in October.

Oil prices have surged on speculation OPEC will extend its supply quota deal with Russia. The cartel meets in Vienna November 30. Also, encouraging U.S. economic data raised demand expectations for energy products.

Consumer confidence in the U.S. saw a significant improvement in the month of October, the Conference Board revealed in a report released on Tuesday.

The Conference Board said its consumer confidence index jumped to 125.9 in October from an upwardly revised 120.6 in September. Economists had expected the index to inch up to 121.0 from the 119.8 originally reported for the previous month.

The American Petroleum Institute is out with its industry survey this afternoon, followed by official numbers from the Energy Information Administration tomorrow morning.

The material has been provided by InstaForex Company – www.instaforex.com

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Dollar Mixed Ahead Of Fed Announcement

The dollar is turning in a mixed performance against its major rivals Tuesday afternoon. The buck is gaining ground against the Japanese Yen after the Bank of Japan lowered its inflation outlook, but is down against the British pound ahead of Thursday’s policy decision from the Bank of England.

The Federal Reserve will conclude its 2-day policy meeting Wednesday afternoon. The Fed is widely expected to keep interest rates unchanged, but traders will keep a close eye on the accompanying statement.

Additionally, President Donald Trump plans to announce his nominee for the next Fed Chair on Thursday. Multiple media sources have reported that Trump intends to nominate Fed Governor Jerome Powell to replace current Fed Chair Janet Yellen.

Growth in Chicago-area business activity unexpectedly accelerated in the month of October, according to a report released by MNI Indicators on Tuesday.

MNI Indicators said its Chicago business barometer rose to 66.2 in October from 65.2 in September, with a reading above 50 indicating growth. The increase surprised economists, who had expected the barometer to drop to 61.0.

Consumer confidence in the U.S. saw a significant improvement in the month of October, the Conference Board revealed in a report released on Tuesday.

The Conference Board said its consumer confidence index jumped to 125.9 in October from an upwardly revised 120.6 in September. Economists had expected the index to inch up to 121.0 from the 119.8 originally reported for the previous month.

The dollar reached an early high of $1.1621 against the Euro Tuesday, but has since slipped to around $1.1650.

The euro area economy expanded at a faster than expected pace in the third quarter and the unemployment rate fell to a more than eight-year low, while inflation slowed unexpectedly, official data revealed Tuesday.

Gross domestic product climbed 0.6 percent quarter-on-quarter, but the rate was slightly slower than the revised 0.7 percent expansion seen in the second quarter, preliminary flash estimate published by Eurostat showed.

Economists had forecast the sequential growth rate to ease to 0.5 percent from the second quarter’s initial estimate of 0.6 percent.

Eurozone inflation eased unexpectedly in October, though marginally, flash data from Eurostat showed Tuesday. Inflation slowed to 1.4 percent in October from 1.5 percent in September. Economists had expected the inflation to remain stable at 1.5 percent.

The euro area unemployment rate reached its lowest level since January 2009, data from Eurostat showed Tuesday. The jobless rate fell to 8.9 percent in September from 9 percent in August. This was the lowest since January 2009. The rate was forecast to remain at 9 percent.

France’s economy expanded as expected in the third quarter, first estimate from the statistical office Insee revealed Tuesday. Gross domestic product grew 0.5 percent sequentially, in line with expectations, but slightly slower than the revised 0.6 percent expansion posted in the second quarter.

France’s inflation increased in October on higher food prices, provisional estimate from the statistical office Insee showed Tuesday. Consumer price inflation rose to 1.1 percent in October from 1 percent in September. Inflation was forecast to remain unchanged at 1 percent. Final data is due on November 15.

France’s consumer spending increased in September after falling in the previous month, figures from the statistical office INSEE showed Tuesday. Consumer spending rose 0.9 percent month-over-month in September, reversing a 0.2 percent drop in August.

The buck has dropped to around $1.3275 against the pound sterling this afternoon, from a high of $1.3190 this morning.

UK consumer confidence weakened in October on concerns about wider economic prospects but willingness to buy improved for the third straight month, survey data from GfK showed Tuesday. The consumer sentiment index fell by one point to -10 in October.

The Bank of Japan kept its monetary stimulus unchanged, on Tuesday, despite lowering its inflation outlook.

Governor Haruhiko Kuroda and his board members decided by an 8-1 majority vote to hold its target of raising the amount of outstanding JGB holdings at an annual pace of about JPY 80 trillion, the bank said in a statement.

The bank will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.

The board also decided to maintain the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.

Inflation forecast for the fiscal 2017 was lowered to 0.8 percent from 1.1 percent and the projection for 2018 to 1.4 percent from 1.5 percent. Nonetheless, the outlook for the fiscal 2019 was maintained at 2.3 percent.

The greenback slipped to an early low of Y112.948 against the Japanese Yen Tuesday, but has since rebounded to around Y113.700.

Japan’s industrial production declined at a slower-than-expected pace in September, preliminary figures from the Ministry of Economy, Trade and Industry said on Tuesday.

Industrial production dropped a seasonally adjusted 1.1 percent month-over-month in September, reversing a 2.0 percent rise in August. That was below the 1.6 percent decrease expected by economists.

Japan’s housing starts dropped for the third straight month in September, data from the Ministry of Land, Infrastructure, Transport and Tourism showed Tuesday. Housing starts declined 2.9 percent year-on-year in September, bigger than August’s 2 percent decrease but smaller than the expected fall of 3.2 percent.

Japan’s unemployment rate held steady for the third straight month in September, in line with expectations, data from the Ministry of Internal Affairs and Communications showed Tuesday. The jobless rate came in at 2.8 percent in September, the same rate as in August.

The material has been provided by InstaForex Company – www.instaforex.com

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Gold Slides As Stocks Hold Gains

Gold prices fell Tuesday as stocks were stable at record highs, limiting the safe haven value of the precious metal.

There has been little movement for gold over the past few sessions amid speculation the next Federal Reserve chairman will come from in-house.

President Donald Trump will reportedly name Fed Governor Jerome Powell to replace current Chair Janet Yellen when her term expires in January.

Stability at the Fed means the central bank will likely raise interest interest rates in December and three more times in 2018, in line with their official outlook.

Dec. gold falls $7.20, or 0.6%, to settle at $1,270.50/oz, ending the month with a loss of 1.1%.

In economic news, consumer confidence in the U.S. saw a significant improvement in the month of October, the Conference Board revealed in a report released on Tuesday.

The Conference Board said its consumer confidence index jumped to 125.9 in October from an upwardly revised 120.6 in September. Economists had expected the index to inch up to 121.0 from the 119.8 originally reported for the previous month.

The material has been provided by InstaForex Company – www.instaforex.com

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استقرار الأسهم الأمريكية في مستهل آخر جلسات أكتوبر

استقرت مؤشرات الأسهم الأمريكية عند افتتاح تداولات الثلاثاء – آخر جلسة في أكتوبر/تشرين الأول – مع استمرار تدفق المزيد من نتائج الأعمال الفصلية للشركات.   وانخفض “داو جونز” الصناعي نصف نقطة إلى 23348 نقطة في تمام الساعة 04:45 مساءً بتوقيت مكة المكرمة، في حين ارتفع “ناسداك” (+ 18 نقطة) إلى 6717 نقطة، وارتفع “S&P 500” […]

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U.S. Consumer Confidence Jumps To Nearly 17-Year High In October

Consumer confidence in the U.S. saw a significant improvement in the month of October, the Conference Board revealed in a report released on Tuesday.

The Conference Board said its consumer confidence index jumped to 125.9 in October from an upwardly revised 120.6 in September. Economists had expected the index to inch up to 121.0 from the 119.8 originally reported for the previous month.

With the much bigger than expected increase, the consumer confidence index reached its highest level since hitting 128.6 in December of 2000.

The jump by the headline index reflected improvements in both consumers’ assessment of current conditions and optimism about the short-term outlook.

The present situation index climbed to 151.1 in October from 146.9 in September, while the expectations index rose to 109.1 from 103.0.

The percentage of consumers saying current business conditions are “good” edged up to 34.5 percent from 33.4 percent, although those saying conditions are “bad” also inched up to 13.5 percent from 13.2 percent.

Consumers’ assessment of the job market was more upbeat, as the percentage of consumers saying jobs are “plentiful” increased to 36.3 percent from 32.7 percent and those saying jobs are “hard to get” dipped to 17.5 percent from 18.0 percent.

Lynn Franco, Director of Economic Indicators at the Conference Board, said in a post on Twitter that consumers’ rating of the job market is the most positive since the summer of 2001.

Looking ahead, the percentage of consumers expecting business conditions to improve over the next six months rose to 22.2 percent from 20.9 percent, while those expecting conditions to worsen fell to 6.9 percent from 9.6 percent.

The outlook for the job market was somewhat less favorable, however, as consumers expecting more jobs in the months ahead edged down to 18.9 percent from 19.2 percent. Consumers anticipating fewer jobs also dipped to 11.8 percent from 13.0 percent.

“Confidence remains high among consumers, and their expectations suggest the economy will continue expanding at a solid pace for the remainder of the year,” said Franco.

The material has been provided by InstaForex Company – www.instaforex.com

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Chicago Business Barometer Unexpectedly Rises To Six-Year High In October

Growth in Chicago-area business activity unexpectedly accelerated in the month of October, according to a report released by MNI Indicators on Tuesday.

MNI Indicators said its Chicago business barometer rose to 66.2 in October from 65.2 in September, with a reading above 50 indicating growth.

The increase surprised economists, who had expected the barometer to drop to 61.0. With the unexpected uptick, the barometer reached its highest level since March of 2011.

The unexpected increase by the barometer reflected continued growth in both demand and output, as the new orders index reached its highest level since June and the production index climbed to its highest level since August of 2014.

Of the five barometer sub-components, only the employment index and the supplier deliveries index decreased from the previous month.

The employment index slipped into contraction territory, with MNI Indicators noting firms have resorted to having existing staff work overtime or to hiring temporary workers due to a shortage of skilled and trained workers.

“Firms kicked off Q4 in buoyant mood with only 12% expecting activity to decline between now and the close of the year,” said Jamie Satchi, Economist at MNI Indicators.

Satchi added, “Despite the MNI Chicago Business Barometer hitting a six-and-a-half year high, and output and demand in seemingly rude health, concerns remain over firms’ inability to attract and retain skilled workers.”

On the inflation front, MNI Indicators said inflationary pressures at the factory gate softened in October, losing almost half of the previous month’s sizeable gain.

The material has been provided by InstaForex Company – www.instaforex.com

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