Oil Drops as Iran Signals Willingness to Negotiate

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OANDA Japan Co., Ltd. First Type I Financial Instruments Business Director of the Kanto Local Financial Bureau (Kin-sho) No. 2137 Institute Financial Futures Association subscriber number 1571.

EU Lawmakers approve Ursula von der Leyen as EC President

OANDA Corporation is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission and is a member of the National Futures Association. No: 0325821. Please refer to the NFA’s FOREX INVESTOR ALERT where appropriate.

OANDA (Canada) Corporation ULC accounts are available to anyone with a Canadian bank account. OANDA (Canada) Corporation ULC is regulated by the Investment Industry Regulatory Organization of Canada (IIROC), which includes IIROC’s online advisor check database (IIROC AdvisorReport), and customer accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request or at www.cipf.ca.

OANDA Europe Limited is a company registered in England number 7110087 limited by shares with its registered office at Tower 42, Floor 9a, 25 Old Broad St, London EC2N 1HQ and is authorised and regulated by the Financial Conduct Authority, No: 542574.

OANDA Asia Pacific Pte Ltd (Co. Reg. No 200704926K) holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore and is also licenced by the International Enterprise Singapore.

OANDA Australia Pty Ltd is regulated by the Australian Securities and Investments Commission ASIC (ABN 26 152 088 349, AFSL No. 412981) and provides and is the issuer of the products and/or services on this website. It’s important for you to consider the current Financial Service Guide (FSG), Product Disclosure Statement (‘PDS’), Account Terms and any other relevant OANDA documents before making any financial investment decisions. These documents can be found here.

OANDA Japan Co., Ltd. First Type I Financial Instruments Business Director of the Kanto Local Financial Bureau (Kin-sho) No. 2137 Institute Financial Futures Association subscriber number 1571.

Oil Higher on Lower Inventory Expectations Despite Less Supply Disruption Risks

OANDA Corporation is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission and is a member of the National Futures Association. No: 0325821. Please refer to the NFA’s FOREX INVESTOR ALERT where appropriate.

OANDA (Canada) Corporation ULC accounts are available to anyone with a Canadian bank account. OANDA (Canada) Corporation ULC is regulated by the Investment Industry Regulatory Organization of Canada (IIROC), which includes IIROC’s online advisor check database (IIROC AdvisorReport), and customer accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request or at www.cipf.ca.

OANDA Europe Limited is a company registered in England number 7110087 limited by shares with its registered office at Tower 42, Floor 9a, 25 Old Broad St, London EC2N 1HQ and is authorised and regulated by the Financial Conduct Authority, No: 542574.

OANDA Asia Pacific Pte Ltd (Co. Reg. No 200704926K) holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore and is also licenced by the International Enterprise Singapore.

OANDA Australia Pty Ltd is regulated by the Australian Securities and Investments Commission ASIC (ABN 26 152 088 349, AFSL No. 412981) and provides and is the issuer of the products and/or services on this website. It’s important for you to consider the current Financial Service Guide (FSG), Product Disclosure Statement (‘PDS’), Account Terms and any other relevant OANDA documents before making any financial investment decisions. These documents can be found here.

OANDA Japan Co., Ltd. First Type I Financial Instruments Business Director of the Kanto Local Financial Bureau (Kin-sho) No. 2137 Institute Financial Futures Association subscriber number 1571.

US dollar Gets Retail Sales Boost

U.S. retail sales increased more than expected in June, pointing to strong consumer spending, which could help to blunt some of the hit on the economy from weak business investment.

The Commerce Department said on Tuesday retail sales rose 0.4% last month as households stepped up purchases of motor vehicles and a variety of other goods. Data for May was revised slightly down to show retail sales increasing 0.4%, instead of increasing 0.5% as previously reported.

Economists polled by Reuters had forecast retail sales edging up 0.1% in June. Compared to June last year, retail sales advanced 3.4%.

Excluding automobiles, gasoline, building materials and food services, retail sales jumped 0.7% last month after an upwardly revised 0.6% increase in May. These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have increased 0.4% in May.

June’s strong gain in core retail sales, coming on the heels of solid increases in April and May, suggested a sharp acceleration in consumer spending in the second quarter.

Consumer spending grew at its slowest pace in a year in the first quarter. Spending is being supported by a tight labor market, even as the broader economy is slowing as weaker business investment, an inventory overhang, a trade war between the United States and China, and softening global growth pressure the manufacturing sector.

via CNBC

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JP Morgan Chief Optimistic About US Economy

J.P. Morgan chief Jamie Dimon on Tuesday praised the strength of the U.S. consumer following the largest U.S. bank’s strong quarterly earnings report.

“We continue to see positive momentum with the U.S. consumer — healthy confidence levels, solid job creation and rising wages — which are reflected in our Consumer & Community Banking results,” Dimon said in the earnings statement. “Double-digit growth in credit card sales and merchant processing volumes reflected healthy consumer spending and drove 8% growth in credit card loans, while mortgage and auto originations showed solid improvement, and we continued to attract new deposits, up 3%.”

J.P. Morgan reported better-than-expected second-quarter results before the bell, largely attributed to strong consumer spending. The bank posted earnings per share of $2.82 on revenue of $29.57 billion. Wall Street expected earnings per share of $2.50 on revenue of $28.9 billion, according to Refinitiv. The shares traded 1.7% lower in Tuesday’s premarket on the bank’s worse-than-expected forecast for net interest income.

Double-digit growth in credit card sales and merchant processing further demonstrated that U.S. consumer spending is healthy. Credit card sales volume rose 11% this quarter and merchant processing volume increased 12%, the bank said.

Dimon was less optimistic about the global economy but wasn’t outright bearish either.

via CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

China Not in Rush to Sign Trade Deal

One of Wall Street’s leading authorities on Asia believes China is in no rush to cut a trade deal with the United States.

Despite China’s worst quarterly growth number in 27 years, Yale University senior fellow Stephen Roach contends its economy isn’t as bad as the latest figure implies.

“I was in China last week, and the general sense was that the economy was slowing in the manufacturing sector. The larger, more rapidly growing services sector was likely to provide a source of resilience,” he said Monday on CNBC’s “Trading Nation. ”

Roach, who lived in China from 2007 to 2012 while he was chairman of Morgan Stanley Asia, still regularly meets with government officials, business executives and academics in the region. During his latest talks, he didn’t observe a heightened sense of anxiety over the ongoing trade war.

According to Roach, the climate suggests China will resist moving aggressively to cut a trade deal out of economic slowdown fears. Unless the trade war with Washington escalates, Roach contends China’s coping strategies will be effective.

“China has ample policy space to continue to address the downside of its current growth trajectory,” he said in a note to CNBC, citing monetary, fiscal and currency issues.

via CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mnuchin says trade call with Chinese officials likely this week

Treasury Secretary Steven Mnuchin said he and U.S. Trade Representative Robert Lighthizer may travel to Beijing for trade negotiations if talks by phone this week are productive.

“We expect to have another principal-level call this week, and to the extent we make significant progress, I think there’s a good chance we’ll go there later,” Mnuchin said Monday at a briefing for reporters at the White House.

The planned phone call would be the second time the top trade negotiators have spoken since U.S. President Donald Trump and his Chinese counterpart Xi Jinping called a truce in their year-long trade war during the G-20 meeting at the end of June. The leaders agreed to restart talks for a trade deal — which had collapsed in May — but they gave no concrete time-frame to reach a deal.

Earlier Monday, Trump indicated the U.S. tariffs on China were having their intended impact by squeezing China’s economy, tweeting, “The United States tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. This is why China wants to make a deal.”

Trump’s comments came hours after China released figures showing growth in the world’s second-largest economy slowed to 6.2% in the second quarter, the weakest pace since at least 1992 when the country began collecting the data.

Farm Deals

Meanwhile, Trump last week complained that China wasn’t following through on a promise that Xi made at the G-20 meeting to increase purchases of American farming products. China, for its part, has since said it’s considering buying more U.S. soybeans, corn and pork as a cooperative gesturebut that total volumes will depend on the progress of the trade talks.

During the last detente in December, China had committed to buying over 20 million tons of U.S. soy, pork and corn. After talks fell apart in May, China said it would continue with the purchases, though it did ask for some shipments to be delayed.

The U.S. expects China to announce significant purchases of American agriculture products, Trump’s top economic adviser Larry Kudlow told reporters on Monday, implying that the step is necessary for trade talks between two nations to advance. “We expect China to be announcing shortly some large scale purchases of farm goods and services,” Kudlow said.

Despite the trade dispute, Trump said Xi is a friend of his. “I used to say he’s a good friend of mine, probably not quite as close now,” Trump told reporters Monday at the White House. “But I have to be for our country. He’s for China and I’m for the U.S.A., and that’s the way it’s gotta be.”

Mnuchin also said he’s “hopeful” that Congress will approve the USMCA, the successor to the North American Free Trade Agreement. Trump said on Monday that if Democrats block the United States-Mexico-Canada Agreement he will resort to “Plan B,” without elaborating.

BNN Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

U.S. import prices post biggest drop in six months

U.S. import prices fell by the most in six months in June, pulled down by declines in the costs of petroleum and other goods, suggesting imported inflation remained subdued.

The Labor Department said on Tuesday import prices dropped 0.9% last month, the biggest decrease since December. Data for May was revised up to show import prices unchanged instead of decreasing 0.3% as previously reported.

Economists polled by Reuters had forecast import prices falling 0.7% in June. In the 12 months through June, import prices fell 2.0% after declining 1.1% in May.

Data last week showed an acceleration in underlying consumer prices in June. Producer prices, however, rose marginally. The mixed inflation readings have little impact on market expectations that the Federal Reserve will cut interest rates this month for the first time in a decade.

But the signs of a pickup in consumer prices after months of little growth further reduced the odds of a 50 basis points cut at the U.S. central bank’s July 30-31 policy meeting.

Fed Chairman Jerome Powell last week told lawmakers the central bank would “act as appropriate” to protect the economy against risks stoked by a trade war between the United States and China, as well as slowing global growth.

Import prices exclude tariffs. In June, prices for imported fuels and lubricants fell 6.5% after rising 2.3% in the prior month. Imported food prices tumbled 1.5%, the second straight monthly drop.

Excluding fuels and food, import prices fell 0.2% in June after a similar decline in May. The so-called core import prices fell 1.6% in the 12 months through June. Though the dollar has weakened a bit this year, its gains last year against the currencies of the United States’ main trading partners continue to weigh on core import prices.

The cost of imported capital goods fell 0.2% last month. Prices for imported consumer goods excluding automobiles dipped 0.1%. The cost of goods imported from China slipped 0.1% last month, matching May’s drop. Prices fell 1.5% in the 12 months through June, the largest decline since February 2017.

The report also showed export prices fell 0.7% in June after dropping 0.2% in May. Export prices declined 1.6% on a year-on-year basis in June after decreasing 0.8% in May.

Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Canada’s international transactions in securities, May 2019

Foreign investors acquired $10.2 billion of Canadian securities in May, following two months of divestment. At the same time, Canadian investment in foreign securities resumed to reach $4.1 billion, led by purchases of US corporate bonds.

As a result, international transactions in securities generated a net inflow of funds of $6.1 billion in the Canadian economy in May to total $34.2 billion in the first five months of 2019.

Foreign investors purchase federal government bonds

Foreign investment in Canadian securities totalled $10.2 billion in May. Foreign investors acquired Canadian debt instruments but reduced their exposure to Canadian shares in the month.

Non-resident investors added $12.9 billion of Canadian bonds to their portfolio in May. Foreign investment in federal government bonds reached $8.8 billion, mainly secondary market purchases of Canadian dollar-denominated instruments. This was the first monthly investment in these instruments in four months. In addition, non-resident investors added $3.9 billion of federal government business enterprises bonds to their holdings.

Non-resident investors resumed their acquisitions of Canadian money market instruments by adding $1.9 billion to their holdings in May, following three straight months of divestment. Foreign acquisitions of private corporate paper were moderated by a divestment in Government of Canada paper during the month.

Canadian short-term interest rates edged up while long-term interest rates decreased by 10 basis points in May. Meanwhile, the Canadian dollar depreciated against the US dollar by 0.6 US cents.

Foreign investors reduced their exposure to Canadian equities by $4.6 billion in May, the third consecutive monthly divestment. This divestment mainly resulted from sales on the secondary market of shares from the financial corporate sector. Canadian stock prices, as measured by the Standard and Poor’s / Toronto Stock Exchange composite index, were down by 3.3% in May.

Canadian investors purchase foreign bonds and sell equities

Canadian investors resumed their acquisitions of foreign securities with purchases totalling $4.1 billion in May, following a $189 million divestment in April. Purchases of debt instruments were moderated by sales of equities in the month, an investment pattern generally observed since the beginning of 2019.

Canadian acquisitions of foreign debt securities totalled $6.0 billion in May. The activity was led by purchases of foreign bonds, as investors mainly added US corporate bonds and non-US foreign bonds to their holdings. Canadian pension funds were the main contributors to these purchases in the month. US long-term interest rates decreased for a seventh straight month in May.

Canadian investors reduced their holdings of foreign equities by $1.9 billion in May. Sales of non-US shares were moderated by purchases of US shares. This was the first monthly investment in US shares following six straight months during which investors reduced their exposure to this market. The US stock market decreased by 6.6% in May.

StatsCanada

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

ZEW Economic Sentiment Remains at a Low Level

OANDA Corporation is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission and is a member of the National Futures Association. No: 0325821. Please refer to the NFA’s FOREX INVESTOR ALERT where appropriate.

OANDA (Canada) Corporation ULC accounts are available to anyone with a Canadian bank account. OANDA (Canada) Corporation ULC is regulated by the Investment Industry Regulatory Organization of Canada (IIROC), which includes IIROC’s online advisor check database (IIROC AdvisorReport), and customer accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request or at www.cipf.ca.

OANDA Europe Limited is a company registered in England number 7110087 limited by shares with its registered office at Tower 42, Floor 9a, 25 Old Broad St, London EC2N 1HQ and is authorised and regulated by the Financial Conduct Authority, No: 542574.

OANDA Asia Pacific Pte Ltd (Co. Reg. No 200704926K) holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore and is also licenced by the International Enterprise Singapore.

OANDA Australia Pty Ltd is regulated by the Australian Securities and Investments Commission ASIC (ABN 26 152 088 349, AFSL No. 412981) and provides and is the issuer of the products and/or services on this website. It’s important for you to consider the current Financial Service Guide (FSG), Product Disclosure Statement (‘PDS’), Account Terms and any other relevant OANDA documents before making any financial investment decisions. These documents can be found here.

OANDA Japan Co., Ltd. First Type I Financial Instruments Business Director of the Kanto Local Financial Bureau (Kin-sho) No. 2137 Institute Financial Futures Association subscriber number 1571.