Another crude oil rally attempt ended in tears today with WTI falling over 5% after DOE US oil inventories confirmed the big increase seen in yesterday’s API storage report, confirming that there is lots and lots of oil sloshing around in the US at the moment.
US and European indices were steady through the day, while USD regained its footing. There were no major surprises in the FOMC minutes and their effect quickly faded into history. The main takeaway is that members are split between starting to raise interest rates in June or later in the year, and that they want to go back to making decisions on a meeting by meeting basis and give them more flexibility to act when necessary without warning. I suspect the transparency of recent years has handcuffed the central bank a bit and there may be a need to reduce complacency and reintroduce some fear of the Fed.
There isn’t a lot of news today to move the markets but we may still see quite a bit of action, particularly in Asia Pacific indices. The Hang Seng and Nikkei
broke out in a big way yesterday while the Nifty Fifty appears to be on the recovery trail. The S&P/ASX and the Straits times are sitting at or just below their 52-week highs trying to decide whether to break out and follow the others higher or fall back again.
With Alcoa kicking off earnings season in the US with a positive report and positive guidance on base metal demand the mining and industrial sectors may also attract significant attention from traders.
Alcoa $0.28 vs street $0.26, 2015 demand growth was 9%, above the previous estimate of 7%, guides 2015 demand growth to 6.5%
Significant announcements released overnight include:
US DOE crude oil inventories 10.9 mmbbls vs street 3.2 mmbbls
US API crude oil inventories 12.2 mmbbls vs previous 5.2 mmbbls
Germany factory orders (1.3%) vs street 0.5%
Eurozone retail sales 3.0% vs street 2.8%
Upcoming significant announcements include:
9:30 am AEDT Australia construction PMI previous 43.9
7:00 am BST Germany industrial production street 0.6%
7:00 am BST Germany trade balance street €19.0B vs previous €15.9B
8:00 am BST UK Halifax house prices 3m/yr street 8.2%
8:30 am BST Sweden household consumption previous 2.9%
9:30 am BST UK trade balance street (£1.5B)
10:00 am BST Greece industrial production street (2.1%)
10:00 am BST Greece consumer prices street (2.1%)
10:00 am BST Greece unemployment rate street 26.2%
12:00 pm BST UK interest rate and QE 0.50% and £375B no change
8:30 am EDT US jobless claims street 283K
8:30 am EDT Canada new house prices street 1.4%
10:30 am EDT US natural gas storage street 8 BCF