The oil market is under pressure

Tuesday, August 12, 2014

Asian equity markets traded fairly mixed overnight as fairly modest Japanese economic data weighed on market sentiment and limited further gains. Japan’s industrial production declined unexpectedly by -3.4% m/m in June, compared to a 3.3% fall previously. Capacity utilisation also fell by 3.3% in June m/m compared to a -0.7% fall in May. PPI increased slightly to 0.3% in July, missing expectations of a 0.4% rise. The Nikkei fluctuated but gave back earlier strong gains to finish the session at 15,161 (+0.2%). The Hang Seng index slid slightly lower and held around 24630.

Nikkei Index

NKY Index (Nikkei 225)  Daily 12 2014-08-12 08-41-57

Hang Seng Index

HSI Index (Hong Kong Hang Seng I 2014-08-12 08-42-08

 

UK BRC retail sales fell unexpectedly by -0.3% in July against analysts’ expectations of a 0.9% rise. Sterling remained under pressure trading around 1.67 against the USD following the recent downtrend in the last three weeks.

GBPUSD Spot

GBPUSD Curncy (GBP-USD X-RATE)   2014-08-12 08-41-00

European equity markets opened the session lower this morning, while the euro retreated further towards 1.335 against the dollar. The release of the German ZEW economic survey would provide further direction to European equities. In the US, details from the US Fed Budget could give further momentum across equity and commodity markets.           

Energy: Brent front month futures and slid sharply lower in early trading this morning, extending the recent sell-off in the oil market. Brent front month retreated towards $103.5 per barrel suggesting the potential for further declines towards $102.98. (August 2013’s low). The WTI front month contract failed to hold the recent range and slid lower to retest the $97 area.   

Brent Front Month Futures are heading towards 1-year low. 

CO1 Comdty (Generic 1st 'CO' Fut 2014-08-12 08-39-28

 

Events for today:

 

0001

UK

Jul

BRC Retail Sales

0530

JP

Jun

Industrial Output

1000

DE

Aug

ZEW Economic Survey

1900

US

Jul

Fed Budget

 

All times UK Local Time

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