US Payroll Preview

Posted on | by Todd | Leave a Comment on US Payroll Preview

The  US Non-Farm Payroll (NFP) report, scheduled for 12:30 am Sydney time tonight, could have a significant impact on global financial markets.

In a speech last Friday, FED Chief Janet Yellen was very clear that steady employment growth and rising inflation were the key indicators guiding US interest rate policy.

Tonight’s report will reflect both the number of new jobs created in the month of February and the pace of wages growth.

Wednesday’s release of the ADP private sector job’s report printed much higher at 298,000 on expectations of 184,000. And while the ADP data is far from a foolproof indicator of the NFP report, it would be a big surprise if the headline jobs number printed much below the 200,000 consensus forecast.

Against this backdrop of an imminent FED rate hike, US 10-yr bond yields have reached a three year high of 2.64%, Gold has dropped below $1200.00, Crude Oil has fallen more than 8.5% this week and Copper has lost more than 6% over the last 10 trading sessions.

It’s likely that a NFP print of  230,000, or more, will be bullish for the US Dollar and negative for Global equity markets.

Crude Dump Pushes Oil Search Lower

Posted on | by Todd | Leave a Comment on Crude Dump Pushes Oil Search Lower

The price of West Texas Crude Oil fell over 5% last night as the US Energy Information Administration (EIA) reported an 8.2 million barrel increase in domestic crude supplies. This lifted the total crude inventories to a new record of 528.4 million barrels in storage.

The front-month April contract broke the recent consolidation pattern to trade down to a 3-month low of $50.05, just above the important $50.00 support level.

A corrective bounce higher after such a large 1-day move is likely. However, with storage at all-time highs, more supply coming online and consumption numbers falling, a $48.00 price handle looks more probable than a $52.00 handle over the medium-term.

Shares of Oil Search have held above the recent low of $6.80, but look vulnerable to further downside.

The Investor Signals Algo Engine triggered a short signal at $7.72 on October 10th.

Technical studies suggest a break of the $6.75 level will see the stock revisit the November lows near $6.20.

Chart – OSH

 

 

Algo Signals – New Chart Feature

Posted on | by Leon Hinde | Leave a Comment on Algo Signals – New Chart Feature

From yesterday’s group of Algo Signals, we’re now tracking GEM as a potential short.

We’ve added a new feature to our charts, which now includes the ability to turn on or off the access or viewing of “Leon’s Chart” function. The image below identifies the highlighted button in yellow. Click this button on your charts to enable the feature.

New Chart Feature – Leon’s Charts

 

 

 

Gold Weakness Pressures Newcrest lower

Posted on | by Todd | Leave a Comment on Gold Weakness Pressures Newcrest lower

After reaching a high of $1263.00 on February 27th, the price of Gold has dropped over $45.00 to close today at $1216. 00.

Technically, this price represents the first daily close below the 30-day moving average since January 2nd, and points to the next key support level at $1200.00.

On February 8th, the Investor Signals Algo engine generated a short signal on Newcrest Mining at $23.95. Investors who were holding long positions were given the signal and had the opportunity to sell covered calls, or sell the shares outright.

Shares of Newcrest are now trading near initial support at $21.00.

However, with momentum indicators pointing lower, a realistic near-term target could be found near the former “double-top” high at $20.40.

Chart – NCM

RBA Preview

Posted on | by Todd | Leave a Comment on RBA Preview

The RBA is widely expected to keep interest rates unchanged today.

Foreign Exchange investors will be listening for comments about the Aussie Dollar.

The AUD/USD has risen by 4.5% this year on a trade weighted basis, and RBA Governor Philip Lowe has signalled that the central bank would like a weaker currency.

The sharp improvements in domestic terms of trade (rising coal and iron ore prices) appear to have largely run their course. The AUD/USD was sold through .7600 last week for the first time since late January. Initial support is now seen in the .7530 area.

In the last RBA statement, Governor Lowe made it clear that he was looking at three factors in determining the path for monetary policy: Inflation, the labor market and household balance sheets. 

Of these factors, weakness in the labor market looks to be supportive of another rate cut.

Looking at the expansion of household balance sheets suggests the RBA should look to raise rates. However, the benign outlook on  price inflation signals that the central bank can leave rates unchanged.

We will see the result at 2:30 Sydney time.