Crude oil futures drop as focus remains on U.S. fiscal concerns

Investing.com - Crude oil futures were lower during U.S. morning trade on Monday, as focus remained squarely on the U.S. economic outlook and how U.S. lawmakers will deal with the upcoming debt ceiling debate.

Some profit taking also contributed to losses, after New York-traded oil prices rallied to the highest level since mid-September last week. 

On the New York Mercantile Exchange, light sweet crude futures for delivery in February traded at USD92.75 a barrel during U.S. morning trade, down 0.35% on the day. 

New York-traded oil prices fell by as much as 0.7% earlier in the session to trade at a daily low of USD92.45 a barrel. Oil futures rose to USD93.82 a barrel on January 2, the strongest level since September 19.

New York-traded oil futures climbed 2.5% last week, the fourth consecutive weekly gain and the biggest advance in nearly three months.

Oil futures rallied last week after U.S. lawmakers passed a last-minute bill to avoid the fiscal cliff, a series of looming tax increases and spending cuts that could have pushed the U.S. economy back into a recession.

Forex - USD/CAD little changed in quiet trade

Investing.com - The U.S. dollar was almost unchanged against the Canadian dollar on Monday, amid caution over the outlook for U.S. budget negotiations and speculation that the Federal Reserve may end its quantitative easing program before the end of the year.

USD/CAD hit 0.9860 during early U.S. trade, the session low; the pair subsequently consolidated at 0.9868, dipping 0.05%.

The pair was likely to find support at 0.9835, the low of January 2 and near-term resistance at 0.9883, the session high.

Demand for the greenback continued to be underpinned after Thursday’s minutes from the Fed’s December meeting showed that some policymakers considered an earlier-than-expected end to the bank’s quantitative easing program.

However official data on Friday showed the U.S. economy added 155,000 jobs in December, easing from an upwardly revised increase of 161,000 in November, fanning concerns that the pace of the recovery in the U.S. labor market is moderating.
http://www.investing.com/news/forex-news/forex---usd-cad-little-changed-in-quiet-trade-242724

U.S. stocks decline amid fiscal jitters; Dow Jones down 0.46%

Investing.com - U.S. stocks opened lower on Monday, as concerns over a potential slowdown of the U.S. job market coupled with worries over upcoming U.S. debt ceiling discussions weighed on investor confidence. 

During early U.S. trade, the Dow Jones Industrial Average dropped 0.46%, the S&P 500 index declined 0.44%, while the Nasdaq Composite index retreated 0.40%. 

On Friday, the U.S. Department of Labor said the economy added 155,000 jobs in December, slightly higher than forecasts for an increase of 150,000, but easing from an upwardly revised increase of 161,000 in November, suggesting that the recovery in the labor market may be slowing. 

The data came one day after the minutes of the Federal Reserves’ December policy meeting showed that some policymakers considered an earlier-than-expected end to the bank’s quantitative easing program. 

Investors also remained cautious over the longer term outlook in the U.S., with negotiations on raising the debt ceiling still to come in February. 
http://www.investing.com/news/stock-market-news/u.s.-stocks-decline-amid-fiscal-jitters;-dow-jones-down-0.46-242725

Forex - USD/JPY softens as dovish Fed minutes suggested continued easing

Investing.com - The dollar softened against the yen on Thursday after the Federal Reserve released the minutes of its December monetary policy meeting, which suggested that the U.S. central bank has no plans to quickly consider halting its quantitative easing program.

The Fed minutes offset a largely risk-off trading rally that saw the greenback shoot up against other currencies save the yen.

In U.S. trading on Thursday, USD/JPY was trading at 87.19, down 0.18%, up from a session low of 86.77 and off a high of 87.36.

The pair was likely to find support at 86.54, Wednesday's low, and resistance at 87.36, the earlier high.

The Federal Reserve is currently buying USD85 billion in mortgage debt and Treasury holdings held by banks a month to stimulate the economy and encourage job creation, a monetary policy tool known as quantitative easing, which weakens the dollar as a side effect.

According to Fed minutes released Thursday, that policy will stay in play for now though it may wind down later in 2013.

"A few members expressed the view that ongoing asset purchases would likely be warranted until about the end of 2013, while a few others emphasized the need for considerable policy accommodation but did not state a specific time frame or total for purchases," the Fed minutes read.

"Several others thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet. One member viewed any additional purchases as unwarranted."

While the Fed may wind down its easing program in 2013, such as decision won't come soon, currency markets concluded, which weakened the dollar against the yen, another safe-haven currency.

Fears the U.S. will see a repeat of the 2011 debt-ceiling debacle, when lawmakers waited until the last minute to raise the country's borrowing limit, narrowly avoiding default, kept some investors parked in the safe-haven greenback earlier despite positive news coming out of the labor market that would otherwise fueled appetite for risk.

The U.S. will likely hit its borrowing limit in February after the Treasury exhausts special accounting measures to delay hitting the debt ceiling.

Elsewhere, U.S. payroll processer ADP said earlier that non-farm private employment rose by a seasonally adjusted 215,000 in December, beating market calls  for an increase of 133,000. 

November's figure was revised up to a gain of 148,000 from a previously reported increase of 118,000.

Separately, the U.S. Department of Labor reported that the number of individuals filing initial jobless claims during in the week ending Dec. 29 rose by 10,000 to a seasonally adjusted 372,000, compared to expectations for a decline of 7,000 to 355,000, which dampened the ADP's data.

Jobless claims for the preceding week were revised up to 362,000 from a previously reported 350,000.

The yen, meanwhile was up against the pound and up against the euro, with GBP/JPY down 1.08% and trading at 140.44 and EUR/JPY trading down 1.10% at 113.91.

Forex - USD/JPY jumps to multi-year high ahead of jobs report

Investing.com - The U.S. dollar soared to its highest levels in more than two years against the Japanese yen in Friday’s Asian session as Japanese equities soared and traders awaited the U.S. jobs report for December due out later today. 

In Asian trading Friday, USD/JPY surged 0.51% to 87.69. Earlier in the session, USD/JPY traded as high as 87.77, marking the highest levels for the dollar against the yen since late July 2010. 

Over the past five trading days, the yen has slumped by about 2% against the greenback. The pair was likely to find support at 86.54, Wednesday's low, and has broken through resistance at 87.36, the earlier high. 

Amid speculation that the Federal Reserve may begin winding down its quantitative easing program this year, the dollar was bid higher against most of the other major currencies. Minutes from the most recent Federal Open Market Committee meeting released during Thursday’s U.S. session indicate division among Fed governors regarding when QE3 should grind to a halt. 

While the Fed has pledged to keep interest rates low until the U.S. unemployment rate, currently 7.7%, drops below 6.5%, the central bank has not given a definitive date for the end of its easing efforts. In the near-term, the Fed still plans to make monthly bond purchases of USD85 billion. 

In the midst of its longest losing streak against the dollar in roughly 24 years, the yen’s weakness is lifting shares of Japanese exporters andUSD/JPY should be in focus during Friday’s U.S. session as Bank of Japan Deputy Governor Kiyohiko Nishimura is scheduled to give a speech later today in the U.S. Japanese equity exchanges are open today for the first time in 2013 following a four-day holiday break. 

Elsewhere, EUR/JPY climbed 0.38% to 114.28 while AUD/JPY added 0.3% to 91.59. GBP/JPY was higher by 0.33% at 141.00. 

Crude gains as U.S. stockpiles drop more than expected

Investing.com - Crude oil futures rose on Friday after official data revealed that the country's inventories fell more than expected last week.

Uncertainty as to when the Federal Reserve may wind down its stimulus programs kept the growth-sensitive commodity's gains in check.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at USD92.96 a barrel on Friday, up 0.04%, off from a session high of USD93.10 and up from an earlier session low of USD91.55.

In a report, Energy Information Administration said that U.S. crude oil inventories fell by 11.12 million barrels last week, well above market calls for a decrease of 919,000 barrels, which pushed up prices on sentiment demand for fuels an energy may be stronger than once thought.

Elsewhere, jobs data came in stronger than expected in the U.S. though uncertainty over the Federal Reserve's plans to wind down stimulus tools dampened the rally.

In the U.S. earlier, the Bureau of Labor Statistics reported the U.S. economy added 155,000 nonfarm payrolls in December, beating market calls for the economy to create 150,000 new jobs. 

In addition, the U.S. employment rate remained unchanged at 7.8% last month, though markets had hoped for a decline to 7.7%.

Meanwhile, the Bureau of Labor Statistics revised October's figures to 137,000 from 138,000 new jobs and hiked November's figure to 161,000 from 146,000.

Elsewhere, service-sector data came in better than expected in the U.S. as well. 

The U.S. Institute of Supply Management reported earlier that its non-manufacturing index improved to 56.1 in December from 54.7 in November, beating expectations for a rise to 54.2.

In the eurozone, preliminary data revealed that inflation came in stronger than expected last month, which was also bullish for crude.

The currency zone's consumer price index remained unchanged at an annualized rate of 2.2% in December, outpacing market calls for the index to tick down to 2.1% in December.

Oil, however, jumped in and out of positive territory due to market sentiments that U.S. central bankers may be grouping off into different camps when it comes to deciding when a USD85 million monthly bond-buying program designed to stimulate the economy should wind down.

"A few members expressed the view that ongoing asset purchases would likely be warranted until about the end of 2013, while a few others emphasized the need for considerable policy accommodation but did not state a specific time frame or total for purchases," the Fed said in the minutes of its December monetary policy meeting released this week. 

"Several others thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet. One member viewed any additional purchases as unwarranted."

The bond-buying program, known technically as quantitative easing but dubbed by many as printing money out of thin air, weakens the U.S. dollar and pumps up stock and commodity prices by flooding the economy with liquidity.

Some saw the comments as a sign the Fed may wind down stimulus programs to prevent inflationary pressures from building, slowing recovery and strengthening the dollar in the process, which could pressure oil prices downward.

Meanwhile on the ICE Futures Exchange, Brent oil futures for February delivery were down 0.83% at USD111.20 a barrel, up USD18.24 from its U.S. counterpart.

Gold drops as U.S. jobs report fails to inspire rally

Investing.com - Gold prices dropped on Friday after the U.S. government released its December jobs report, which beat expectations but did not come in solid enough to spark a risk-on rally needed to bolster the precious metal. 

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 1.35% at USD1,652.05 a troy ounce in U.S. trading, up from a session low of USD1,626.05 and down from a high of USD1,664.45 a troy ounce.

Gold futures were likely to test support USD1,626.05 a troy ounce, the earlier low, and resistance at USD1,664.45, the earlier high.

Investors largely ditched gold positions despite positive news from the jobs front.

In the U.S. earlier, the Bureau of Labor Statistics reported the U.S. economy added 155,000 nonfarm payrolls in December, beating market calls for the economy to create 150,000 new jobs. 

In addition, the U.S. employment rate remained unchanged at 7.8% last month, though markets had hoped for a decline to 7.7%.

Meanwhile, the Bureau of Labor Statistics revised October's figures to 137,000 from 138,000 new jobs and hiked November's figure to 161,000 from 146,000.

Investors viewed the numbers as a sign the U.S. economy is improving but not entering a phase of a much more robust recovery, and largely avoided the risk-on asset class.

Uncertainty as to when the Federal Reserve may consider winding down its USD85 million monthly bond-buying program kept oil down as well.

Meanwhile on the Comex, silver for March delivery was down 2.42% and trading at USD29.978 a troy ounce, while copper for March delivery was down 0.66% and trading at USD3.692 a pound.