Falling business sentiments in Asia.
Business confidence in the Asian region declined in the third quarter, Reuters reported, as concerns about security and long-term stability in the region grew despite business activity growth.
China, India and South Korea led deterioration in the sentiments mainly because of tough capital controls and North Korea provocations while other South Asian countries and Australia provided better assessment of the situation, leveling the reading.
Sentiments in South Korea suffered the most, the corresponding index fell from 75 to 50 points. However, despite the numerous nuclear tests and ballistic missile launches of the neighbor, a military confrontation on the Korean peninsula remains unlikely. The deployment of American air defense in South Korea disappointed the Chinese neighbor, which affected the trade between the two countries.
Oil
Oil prices are rising led by a mix of short-term and long-term drivers. US inventories rose less than expected, the API report showed, and the Iraqi oil minister was optimistic on deepening cuts within the OPEC + deal. The cartel's members split on exact outlook, but the deal prolongation appears to be a sure thing while greater cuts are subject for debates. Some of the producers propose to extend the deal until the end of 2018.
The main price catalysts remain news about the rebound of US refineries, data on productivity of drilling rigs in the United States, OPEC reports on compliance with the production deal, as well as comments by oil officials regarding the control of production.
Retail Sales in the UK
Rising inflation in the UK forced households to spend more and faster show the report released on Wednesday. The key reading rose by 2.8% with the forecast of 1.4% in annual terms, despite recent slowdown in wage growth. This speaks of the resilience in consumer demand and allows to expect more confidence in policy tightening by the BoE.
Fed meeting
The dollar went to the negative zone before the regulator's meeting, investors are trying to link the possible optimism of the Fed with the available data, although without much success. The labor market slowed down, the price increase in August above forecasts is deceptive, as it can be attributed to the consequences of US Harvey impact and dollar devaluation, retail sales in August decreased by 0.2%. Where does the positive assessment of the US economy come from?
In addition, the dollar has been held quite long near the level of 91.00, several attempts to break through during this month and a weak correction may indicate consolidation of bearish positions before the breakthrough of 90.00 level. Long positions should be opened with great caution.
Arthur Idiatulin
Business confidence in the Asian region declined in the third quarter, Reuters reported, as concerns about security and long-term stability in the region grew despite business activity growth.
China, India and South Korea led deterioration in the sentiments mainly because of tough capital controls and North Korea provocations while other South Asian countries and Australia provided better assessment of the situation, leveling the reading.
Sentiments in South Korea suffered the most, the corresponding index fell from 75 to 50 points. However, despite the numerous nuclear tests and ballistic missile launches of the neighbor, a military confrontation on the Korean peninsula remains unlikely. The deployment of American air defense in South Korea disappointed the Chinese neighbor, which affected the trade between the two countries.
Oil
Oil prices are rising led by a mix of short-term and long-term drivers. US inventories rose less than expected, the API report showed, and the Iraqi oil minister was optimistic on deepening cuts within the OPEC + deal. The cartel's members split on exact outlook, but the deal prolongation appears to be a sure thing while greater cuts are subject for debates. Some of the producers propose to extend the deal until the end of 2018.
The main price catalysts remain news about the rebound of US refineries, data on productivity of drilling rigs in the United States, OPEC reports on compliance with the production deal, as well as comments by oil officials regarding the control of production.
Retail Sales in the UK
Rising inflation in the UK forced households to spend more and faster show the report released on Wednesday. The key reading rose by 2.8% with the forecast of 1.4% in annual terms, despite recent slowdown in wage growth. This speaks of the resilience in consumer demand and allows to expect more confidence in policy tightening by the BoE.
Fed meeting
The dollar went to the negative zone before the regulator's meeting, investors are trying to link the possible optimism of the Fed with the available data, although without much success. The labor market slowed down, the price increase in August above forecasts is deceptive, as it can be attributed to the consequences of US Harvey impact and dollar devaluation, retail sales in August decreased by 0.2%. Where does the positive assessment of the US economy come from?
In addition, the dollar has been held quite long near the level of 91.00, several attempts to break through during this month and a weak correction may indicate consolidation of bearish positions before the breakthrough of 90.00 level. Long positions should be opened with great caution.
Arthur Idiatulin
This analysis is provided as general market commentary and does not constitute investment advice. Past performance is not indicative of future results
