Oil Steadies After Refinery Data Spurs Biggest Gain in 8 Weeks

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Oil steadied after its biggest rally in eight weeks in New York as the focus shifted from rising U.S. refinery demand to the prospects for a U.S. interest rate gain this year.

Futures edged 0.3 percent higher after surging 6.3 percent yesterday. U.S. refiners boosted operating rates last week, according to an Energy Information Administration report Wednesday.  Odds the Federal Reserve will move on rates at their next meeting jumped to 50 percent from around 32 percent a week ago, based on futures prices, after officials signaled they’re prepared to tighten. Data showed American economic growth slowed last quarter.

Oil failed to sustain a gain above $50 a barrel earlier this month as the global glut showed little sign of easing any time soon. U.S. crude stockpiles are more than 100 million barrels above the five-year seasonal average, EIA data show. The Organization of Petroleum Exporting Countries continues to pump above its quota and the International Energy Agency estimates the surplus will remain until at least the middle of 2016.

West Texas Intermediate for December delivery increased 12 cents to close at $46.06 a barrel on the New York Mercantile Exchange. It’s the highest close since Oct. 16. The contract gained $2.74 on Wednesday, the most since Aug. 31. The volume of all futures traded was 3.2 percent above the 100-day average at 2:56 p.m.

Source: Bloomberg

Gold Ends at 3-week Low as Bets for December Rate Hike Grow

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Gold prices finished Thursday at their lowest levels in three weeks, a day after the Federal Open Market Committee left the door open to hiking interest rates at its December meeting.

Gold for December delivery dropped $28.80, or 2.5%, to settle at $1,147.30 an ounce on Comex. That was the lowest settlement since Oct. 8.

Prices had settled at a one-week high on Wednesday, but then turned lower in electronic trading after the Fed statement was released at the close of the central bank’s two-day meeting.

The market had been fairly convinced that the Fed would hold off on interest-rate hikes this year, but a more hawkish-than-expected statement took the market by surprise. The CME Group’s FedWatch tool shows investors are pricing in a 50% chance of a rate increase at the December meeting, scheduled for Dec. 15-16.

Gold has been a beneficiary of the Fed’s ultraloose monetary policy because commodities like gold don’t offer interest. The dollar also saw a sharp move higher late Wednesday, and that also can drag on dollar-denominated currencies like gold. The dollar hit its highest level against the euro in nearly three months Wednesday, but has since pulled back.

On Comex, other metals ended sharply lower. December silver futures dropped 74.3 cents, or 4.6%, to $15.55 an ounce, while December copper lost 4.2 cents, or 1.8%, to $2.321 a pound.

Source: MarketWatch

Japan Consumer Prices Fall 0.1% Before BOJ Policy Decision

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The Bank of Japan’s main inflation gauge dropped for a second consecutive month as the effects of low oil prices continue to take a toll, keeping Governor Haruhiko Kuroda distant from his 2 percent inflation target.

Consumer prices excluding fresh food declined 0.1 percent in September from a year earlier, after falling in August for the first time since April 2013, according to the statistics bureau. The median estimate of economists surveyed by Bloomberg was for prices to decline 0.2 percent. Stripping out food and energy, prices rose 0.9 percent.

Analysts are split on whether the BOJ will bolster stimulus later Friday as board members examine the outlook for inflation and economic growth. Even though Japan’s core consumer prices are falling, Kuroda has said the inflation trend is improving, helped by a tight labor market and high corporate profits.

Household spending fell 0.4 percent in September while the jobless rate stood at 3.4 percent, according to separate reports by the statistics bureau.

While 16 of 36 analysts surveyed by Bloomberg said they expect Kuroda and his board to bolster monetary policy.

Kuroda said Oct. 16 that the inflation trend is “surely improving” and cited a measure that excludes fresh food and energy, which rose 1.1 percent in August.

Source: Bloomberg

Rally in U.S. Shares Stalls Amid Earnings, Odds for Higher Rates

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A rally in U.S. shares stalled Thursday, after equities reached a two-month high, as investors weighed corporate earnings and prospects for higher interest rates this year.

The Standard & Poor’s 500 Index was little changed at 2,089.40 at 4 p.m. in New York, near the highest level since Aug. 18, after briefly erasing losses in the final half hour. The gauge is up 8.8 percent in October, poised for its best month in four years, boosted by gains in commodity producers and technology shares.

Fed officials yesterday forecast moderate growth, and dropped a reference to global risks in a policy statement following a two-day meeting. They also referred to their “next meeting” on Dec. 15-16 as they discussed the timing for raising interest rates. Traders are now pricing in a 52 percent chance of liftoff in December, compared with as low as 30 percent last week. Prior to the Fed meeting, March was the first month showing at least even odds for a rate increase.

Data continues to be the Fed’s guide toward an eventual rate boost, and a report today showed the economy expanded at a slower pace in the third quarter as companies took advantage of gains in consumer and business spending to reduce bloated stockpiles. A separate measure showed contract signings to purchase previously owned homes unexpectedly fell in September by the most since the end of 2013, indicating the residential real estate market is cooling from its recent brisk pace.

Source : Bloomberg

European Stocks Are Little Changed Amid Earnings as Miners Slide

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European stocks fluctuated before closing little changed as investors parsed mixed earnings reports, with miners sliding as the increased possibility of a Federal Reserve interest rate rise in December weighed on commodity prices.

Deutsche Bank AG and Barclays Plc fell more than 6 percent as earnings disappointed. A gauge tracking resource-related stocks including BHP Billiton Ltd. and Rio Tinto Group slipped the most on the Stoxx Europe 600 Index as Liberum Capital downgraded the two companies to sell, and commodities declined as the Fed’s comments boosted the dollar. Danone, one of the world’s biggest producers of baby formula, climbed 1.5 percent after China said it would abandon its one-child policy.

The Stoxx 600 retreated less than 0.1 percent to 375.7 at the close of trading, after earlier falling as much as 0.6 percent and rising 0.4 percent. Europe’s benchmark measure has still climbed 8 percent in October, rebounding from a quarterly rout and heading for its best monthly rally since 2009 amid increased stimulus from China and hints of additional easing from the European Central Bank.

Source : Bloomberg