Good morning.
Black gold, Texas T�.Oil that is.
After a few quiet sessions for oil it returns with a vengeance. Benchmark NYMEX crude rallied $1.88 yesterday, to stand at $44.00, well below the recent highs but still a considerable daily swing. This was largely due to weekly inventory reports revealing a sharp decline in commercial crude stockpiles despite an increase in production over the summer period from Opec. The Energy Information Association said crude inventories had dropped by 4.2m barrels in the latest week to 287.1m, market participants had been expecting a modest decline of 400,000 barrels.
Equity markets climbed yesterday, with the majority of the gains being attributed to the smaller than expected fall posted by the Institute of Supply Management�s manufacturing activity survey for August. The index fell to 59 from 62 in July, better than the expected drop to 57, and still a significant distance above the all important 50 level. The figure currently is consistent with an expanding economy; a move below 50 denotes an economy undergoing a phase of contraction. The FTSE was given further impetus, in fact reaching a nine-week high, as dealers speculated that HBOS would soon counter Santander Central Hispano�s agreed �8.5bn offer for Abbey National.
This afternoon sees the release of jobless claims data, which rose by 10,000 to 343,000 last week, with half the gain being attributed to Hurricane Charley. This will probably feed into today�s figure as well, keeping the claims figure towards the high-end of the recent range at 345,000. In reality, the market will tread water now until the release tomorrow of the key non-farm payrolls report.
And now for some forex levels,
Sterling weakened further across the board yesterday, hurt by reduced interest rate expectations following a slew of weak data, especially the firm evidence filtering through that the housing market has finally run out of steam. EUR/GBP is currently trading at 0.6790, with the resistance levels to be found at 0.6815, 0.6845, and 0.6880. Support on the downside should be offered at 0.6755, 0.6705 and 0.6685. GBP/USD is trading at the 1.7933 level, with support expected at 1.7855, 1.7820 and 1.7735. The resistance levels are 1.7985, 1.8065 and 1.8085.
Have a great day,
Richard
Colin Austin Barbara Macey Leeann Hartfield David Waite Eddie Fogg Andy Smith Samantha Roberts Brendan Shanks Tim Bartlett Paul Arkell Paul Wright Aidan Hunt Victor Swanton Sonia Marr Graham Kneller Simon Smith Algy Sim Gerry McClement Laura Canavan Mark O�Connell Lincoln Snell Sinead Stringer Ryan Jackson Andrew Moy Richard Collyer Nico Prinsloo Guy Phelan Charles Gannon Adam Dowsett James Featherstone Mark Woostenholme Jo Brown Steve Marsland Malcolm Long
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