[European hotspots] Retail sales boost the dollar, oil prices are not empty

Huitong.com, November 16th - Tuesday (November 15), the US retail sales data released in October was better than expected. The US dollar index surged nearly 30 points in a short-term, breaking through the 100 mark and refreshing the daily high. 100.21. The pound fell below the 1.24 mark against the US dollar, dragged down by the UK CPI data; the euro zone GDP growth rate is as expected, the euro has limited impact. Crude oil prices continued to rebound, and the three major gains in the day helped the oil price rebound. However, the three major negative factors such as Trump's election continued to be rampant, and crude oil bulls still need to be vigilant. Spot gold fluctuated within a narrow range of nearly five months, currently trading at $1226.17 per ounce. The US dollar index encountered resistance at the 100 mark, slightly eased the downward pressure on the gold price, but the Fed’s interest rate hike in December has exceeded 90%. The gold ETF holdings have been significantly reduced, limiting the room for rebound in gold prices.



[List of major market conditions]
Foreign exchange market: On Tuesday (November 15), the US retail sales data released in October was better than expected. The US dollar index surged nearly 30 points in a short-term, breaking the 100 mark and refreshing the daily high of 100.21. About US$4 to US$1220.78/oz; Huitong NetEase pointed out that the data released this time show that the US retail industry and the US economy are developing well, and it is expected to raise the market's expectation of the Fed's interest rate hike in December, boosting the US dollar in a short period of time. At the same time, the Federal Reserve’s Rosen Glenn issued a hawkish speech, saying that a loose fiscal policy will bring about a faster rate hike, which further boosts the dollar. The pound fell to 0.77% in intraday trading and once fell below the 1.24 mark to 1.2388, dragged down by UK CPI data. According to Huitong Finance, the UK CPI annual rate rose by 0.9% in September, which was lower than the expected value of 1.1% and the previous value of 1.0%. The UK CPI monthly rate rose by 0.1% in October, which was lower than the expected value of 0.3% and the previous value of 0.2%. Reuters commented that after the rapid depreciation of Brexit in the UK, the ex-factory price of industrial products soared at the fastest rate in recent years, suggesting that CPI growth will rise in the coming year. The euro zone's GDP growth rate is as expected, and the euro is limited. The euro once rose to 1.0815 above the 1.08 mark, and is currently taking up most of the gains. The data showed that the euro zone's third quarterly adjusted GDP quarterly rate increased by 0.3%, and the third quarter GDP annual rate revised value increased by 1.60%, in line with expectations and previous values. Reuters said that the euro zone GDP data indicates that although the region was under the pressure of the Brexit referendum and the uncertainty of the US election, the region's economy still showed resilience, which to some extent decompressed the European Central Bank. The dollar remained volatile against the yen, and once fell to a daily low of 107.75 during the session, it is now rising above the 108 mark.

Crude oil: Crude oil prices continued to rebound, WTI crude oil refreshed three-day high of 44.95 US dollars / ounce; Huitong.com pointed out that there were news inside the day that OPEC initiated the final diplomatic mediation to ensure the agreement to reduce crude oil, especially in the past three weeks. Since the oil price has fallen by 20%, the expected increase in production has triggered a large number of short-term profit-taking. In addition, the Nigerian oil pipeline attack and other three additional positives helped the oil price rebound strongly. However, the three major negative factors such as Trump’s election continued. Hey, crude oil bulls still need to be vigilant.

IGGroup market strategist Jingyi Pan said that news about Qatar, Algeria and Venezuela leading the OPEC agreement is quite pleasing to oil market traders, pushing crude oil prices higher. Jingyi Pan also pointed out that, most notably, it is reported that Iran and Iraq, the major oil producers, are also considering the proposal, rekindling hopes for OPEC to reach an agreement at the upcoming meeting. Huitong analysts believe that the US daily shale oil production in December will fall to 4.5 million barrels of the lowest expected since April 2014, helping to support oil prices. In addition, Harold Hamm, chief executive of Continental Resources, a US independent oil producer, is likely to serve as the energy minister of the Trump administration, and the news also supports the oil market. According to Huitong analysts, if Hamm is appointed, it will be the first energy minister in the US to pull directly from the oil industry; this will benefit the long-term development of the crude oil industry. In addition, the number of Basra crude oil that Iraq plans to export from the southern port in December fell from 3.24 million barrels per day in November to 3.16 million barrels, the lowest in four months; it also made the bears scruple. Philips Futures investment analyst Jonathan Chan pointed out that US crude oil futures prices may also be supported by short covering. Some oil pipelines in Niger were attacked, which affected the oil supply and provided a rebound momentum for oil prices. According to Reuters, the Niger Delta Armed Forces Avengers Alliance announced on Tuesday night that it attacked the oil pipelines of the Italian General Oil Company, Shell and Oando Energy in the Niger Delta, affecting the oil production by about 300,000 barrels per day, and said it would take other Means to fight until the government has expressed sincere dialogue and negotiations.

Technically, at the four-hour level, the US oil has risen below the resistance of the Bollinger Middle Line at around $44.12, and the short-term is expected to rise further to the Bollinger online track at around $45.82. However, at the weekly level, several technical indicators remain serious. After the short-term, the oil price will return to the downtrend after a short-term rebound. The short-term focus is on the support around the 5-day moving average of $44.28. The $43 integer mark is further support.

Stock market: : European pan-European 300 index closed up 0.34% on Tuesday; UK FTSE 100 index closed up 0.6% on Tuesday; Germany DAX index closed up 0.5% on Tuesday; France CAC 40 index closed up 0.7% on Tuesday; Spain IBEX index Tuesday Closing rose 0.3%.

Precious metals: Tuesday (November 15) On Tuesday, spot gold's decline was suspended, and it fluctuated within a narrow range above US$1220. The main reason was that the US dollar fell during the Asian-European period. In addition, after the gold price fell, there were still some short-term speculations. Buying; but due to the high rate of interest rate hike in the Fed in December, it is difficult for the price of gold to rebound sharply. The initial resistance is near the short-term around $1231, focusing on the resistance around the 5-day moving average of $1,242.
MKSPAMP Group trader SamLaughlin said that demand from China pushed up gold prices in Asia, and gold price support is around $1210. Below that level, the end of May should be about $1,200, and there should be strong buying demand. But market sentiment is still being weighed down by the possibility that the Fed is likely to raise interest rates in December.

Kaplan, chairman of the Dallas Fed and chairman of the 2017 Open Market Committee, said on Tuesday morning that the Fed is on the track to raise interest rates. The rise in US Treasury yields has no impact on the Fed’s policies for the time being, but the long-term yields have made the Fed have more room to manipulate, and the Fed must find opportunities to raise interest rates. It is expected that the United States will reduce some easing measures in the near future. The Fed is expected to raise interest rates in the near future. However, Huitong analysts remind investors that the rebound price above the gold price is relatively limited. In addition to the higher probability that the Fed will raise interest rates in December, the US dollar still has the momentum of rising, and the gold EFT position is greatly reduced, which will drag down the gold price in the middle line. As of Tuesday, the world's largest gold ETF--SPDRGOLDTRUST position decreased by 5.63 tons compared with the previous day, the current position is 928.93 tons, the lowest in the past five months; and the past three trading days, the total position decreased by about 26 tons, the range is nearly one The year is the biggest. Huitong analysts reminded that important economic data and Fed officials talked more this week, investors need to pay attention to control risks

According to the US federal funds rate futures, the Fed’s probability of raising interest rates in December was 92%; this also provided support for the US dollar. The US dollar index hit a short sniper above the 100 mark on Tuesday, once fell to 99.45, and is now rising to around 99.84; In view, the US dollar index still has a certain upward momentum. If the US dollar index effectively rises above the 100-integer mark, the gold price will continue to decline last week. Reuters technology analyst Wang Tao said that spot gold may test resistance at $1,235 per ounce because the support area has been found at $1204-1210.

[List of economic data]
1 US retail sales rose by 0.8% in October, and the growth rate was 0.6% higher than expected. The increase in the purchase of cars and other products by American families suggests that the US economy continues to strengthen, which is conducive to the Fed raising interest rates in December. . Due to the impact of Hurricane Matthew, American families needed to rebuild and repair their homes, so the demand for building materials was greatly boosted and became the driving force for this data growth.

In the second quarter of the second quarter, the revised quarterly GDP rate rose by 0.3%. The increase was in line with the expected value and the initial value; the annual rate rose by 1.6%, and the increase was also in line with the expected and initial values. This indicates that despite the suppression of the Brexit referendum in the UK and the uncertainty of the US election, the economy of the region still shows resilience, which to some extent decompresses the European Central Bank.

3 UK CPI annual rate rose by 0.9% in October, the increase was less than the expected value of 1.1%, but after the rapid depreciation of the Brexit pound in the UK, the ex-factory price of industrial products soared at the fastest rate in about five years, suggesting that CPI growth will rise in the coming year. . The ex-factory price of industrial products rose by 2.1%, and the growth rate was the fastest in April 2012. In addition, factory raw materials and crude oil costs soared by 4.6% in October, the highest rate of growth. UK inflation has been below the central bank's 2% target for the past three years, but the Bank of England expects inflation to reach 2.7% next year.

4 Germany's third quarterly adjusted GDP quarterly rate rose by 0.2%, slightly higher than the expected value of 0.3%, due to export drag. However, the German Bureau of Statistics said that in the third quarter, there was a positive indication of positive demand, especially in private consumption. The foreign trade dragged down the overall performance of GDP in the third quarter, and the volume of imports increased due to the decline in exports.

[Fundamental message list]
1 Bank of England Governor Carney told the Parliamentary Finance Committee in London on Tuesday that he could not confuse the drivers of economic fundamentals with monetary policy because monetary policy could not improve fundamentals; the Bank of England would take action that must be taken; The central bank will continue to show that it is impossible to make structural changes in the economy to change the direction of output; the reason why the high housing prices in the UK are more reluctant to accept this in terms of supply, the more they think the problem lies in monetary policy; the deputy governor Xia Fei Ke said that what kind of interest rate the economy needs is not something that central bank officials can choose. Low interest rates are necessary.

2 According to a representative who understood the talks, OPEC members launched the final diplomatic mediation to ensure that the crude oil production reduction agreement was reached, led by Qatar, Algeria and Venezuela, in an effort to overcome the differences between the organization's largest oil producers.
At the same time, the informed representative also said that the bilateral talks on the weekend (November 12) failed to resolve the differences and only two weeks to finalize the agreement before the ministerial meeting in Vienna on November 30. Due to the privacy of the talks, the informed representative asked for anonymity. Saudi Arabia, Iraq and Iran still have mixed opinions on how to allocate a share of production. OPEC has not yet found a way to finalize the initial crude oil reduction agreement reached in Algiers on September 28. The preliminary agreement ended a two-year policy of no capped oil production. Huitong.com quoted Reuters as saying that the Niger Delta armed group Avengers announced in the evening that they attacked the pipelines of General Oil, Shell and Oando Energy in Nigeria's Niger Delta, affecting about 300,000 barrels of oil. /day. The Niger Delta Armed Forces Avengers Alliance also stated that it will use other means to fight until the government has expressed sincere dialogue and negotiations.

3 Boston Fed President Eric Rosengren said on Tuesday (November 15) that the market expects a rate hike in December to be reasonable, only a particularly pessimistic news can hinder the December rate hike; the November statement is more in line with The rate hike in December may be. The risks associated with waiting for a long time to raise interest rates must be considered. We should raise interest rates now. The conditions for raising interest rates in December are there. It is feasible to properly tighten the labor market. The economy is currently achieving the dual goals of inflation and employment, and it is expected that US inflation will approach or reach the 2.0% target in 2017. When it was confirmed that a moderate austerity policy was necessary to avoid a drastic adjustment of policy measures in the short term, Rosengren's speech seemed to consolidate the market forecast for a rate hike in mid-December. He was one of the Fed officials who spoke first after the US election.

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