China’s services sector growth hits three-month low in January: Caixin PMI By Reuters



BEIJING (Reuters) – Growth in China’s services sector slowed for a second straight month in January, a traditionally busy sales season, hitting a three-month low as companies cut prices and new orders dipped, a private sector survey showed on Wednesday.

The Caixin/Markit services purchasing managers’ index (PMI) slowed to 51.8 last month from 52.5 in December, but was still higher than an 8-month low hit in October.

The slowdown in growth suggests the services sector, which accounts for more than half of the economy, faces persistent challenges despite a flurry of stimulus and a U.S.-China trade “Phase 1” deal. The reading is also unlikely to reflect the early impact of the coronavirus crisis that flared in late January, which could weigh heavily on growth.

“China’s economic recovery was not strong enough due to limited improvement in demand, and some companies didn’t replenish inventories,” Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, wrote in a note accompanying the Caixin PMI release.

The index has stayed above the 50-point margin that separates growth from contraction on a monthly basis since late 2005. Beijing has been counting on a strong services sector to cushion a prolonged slowdown in manufacturing and investment and create jobs for workers laid-off in other areas.

Economic growth has cooled to near 30-year lows amid sluggish demand at home and abroad.

The cooling trend in the private sector survey, which focuses more on small, export-oriented companies, contrasts with the official non-manufacturing PMI, which showed the sector’s activity quickened in January.

Services companies reported a smaller rise in the volume of new work in January and continued to face higher fuel and labor costs. Demand softened at home, while new orders from overseas picked up modestly from the previous month.

The pace of job creation almost stalled, with the employment sub-index hitting the lowest level in 16 months. Meanwhile, firms had to lower their selling prices for the second time, squeezing companies’ profit margins.

But their expectations regarding the one-year outlook for business activity improved notably in the month, as the “Phase 1” trade deal with the United States eased some of the pressure on exporters.

However, a coronavirus outbreak that has abruptly limited the movement of millions of people and forced the closures of restaurants, malls, and movie theaters across the country during the week-long Lunar New Year holiday, is likely to further darken the outlook for China’s slowing economy.

Analysts have noted the deepening coronavirus crisis, which is expected to be as much as two or three times worse than the SARS outbreak, will potentially add to industry headaches.

“As during the SARS episode, we expect consumption and travel to take the hardest hit,” Analysts at Oxford Economics said in a note.

“But we also expect that there will be significant disruption to other economic activities, though to a lesser degree than the impact on consumption.”

Analysts like CEBM Group’s Zhong have urged policymakers to take swift action to cushion to hit to growth from the virus.

“As the current pneumonia epidemic is putting pressure on the economy, policymakers need to make efforts to ensure no major disruptions to improving business confidence,” he said.

Caixin’s composite manufacturing and services PMI, also released on Wednesday, slowed to 51.9 in January from 52.6 in December.



Yen hits three-month high as Mideast tensions escalate By Reuters


© Reuters. Illustration photo of a Japan Yen note

By Tom Westbrook

SINGAPORE (Reuters) – The safe-haven yen touched a three-month high on Monday and gold jumped as investors fretted that the killing of Iran’s most prominent military commander by the United States could trigger a broader Middle East conflict.

U.S. President Donald Trump warned of a “major retaliation” if Iran hit back, while Iran’s replacement commander vowed to expel the United States from the region.

“I think markets are going to remain pretty nervous on potential Iranian retaliation and what Trump might do next,” said National Australia Bank’s head of FX strategy, Ray Attrill.

On Sunday, Iran further distanced itself from the 2015 nuclear agreement with world powers, which the United States witrhdrew from in 2018, saying it would continue to cooperate with the U.N. nuclear watchdog but would respect no limits to its uranium enrichment work.

The yen , regarded as a haven in times of market turmoil by virtue of Japan’s status as the world’s biggest creditor, rose as much as 0.3% to 107.82 per dollar early in Asian trade, its strongest since October 2019.

It handed back most of those gains later though, even as gold gained and stocks slid.

“It’s a wait-and-see but it’s very tense,” said Sean MacLean, research strategist at Pepperstone, a brokerage in Melbourne.

The Swiss franc rose 0.1% to 0.9712 francs per dollar, while the euro () and pound were steady.

The dollar crept higher against riskier currencies such as the and the . Against a basket of currencies () the greenback steadied at 96.852.

was 1.6% higher , at an almost seven-year high, and oil rose on fears any conflict in the region could disrupt global supplies. [O/R]

The moves extended a flight to safety that began on Friday, after Iranian Major-General Qassem Soleimani was killed on Friday in a U.S. drone strike on his convoy at Baghdad airport.

The attack took U.S.-Iranian hostilities into uncharted territory, stoking fears of a major conflagration.

The Australian dollar/yen pair – a gauge of risk sentiment because the Aussie is an export-oriented currency compared with the yen’s safety status, has been among the biggest movers, with the yen rising 1.1% since Friday. ()

U.S. Secretary of State Mike Pompeo said Washington would target any Iranian decision-makers it chose if there were further attacks on U.S. interests by Iranian forces or their proxies.

The European Union, Britain and Oman, meanwhile, urged the two sides to make diplomatic efforts to defuse the crisis.

“The last thing markets want is a move from a tit-for-tat tariff war to saber-rattling in the Gulf,” a strategist at Singapore’s DBS Bank wrote in a note on Monday.

Weak showings in factory activity surveys in Japan and China on Monday only added to gloom over the outlook for global growth after a disappointing U.S. manufacturing readout on Friday.

Service sector surveys in Europe, due later on Monday and a U.S. non-manufacturing survey due on Tuesday were also in focus.

So too were November trade, construction approvals and retail figures for Australia through the week, ahead of a central bank meeting in a month.





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Oil hits three-month high on upbeat data, Middle East tension


NEW YORK (Reuters) – Oil prices rose on Monday to three-month highs, lifted by optimism over an expected China-U.S. trade deal and upbeat industrial data, while traders kept a close watch on the Middle East following U.S. air strikes in Iraq and Syria.

FILE PHOTO: Grandpuits oil refinery southeast of Paris, France, February 29, 2016. REUTERS/Christian Hartmann

International benchmark Brent LCOc1 reached $68.99 a barrel, while U.S. crude futures CLc1 hit $62.34 a barrel, both the highest since Sept. 17. For the year, Brent has risen around 27% in 2019, and the U.S. benchmark is up about 36%.

Futures eased during the session, with Brent crude futures LCOc1 rising 28 cents to settle at $68.44 a barrel. West Texas Intermediate (WTI) crude CLc1 futures fell 4 cents to settle at $61.68 a barrel.

White House trade adviser Peter Navarro told Fox News in an interview that the U.S.-China Phase 1 trade deal would likely be signed in the next week.

He cited but did not confirm a report that Chinese Vice Premier Liu He would visit this week to sign the deal.

“Washington has sent an invitation and Beijing has accepted it,” the South China Morning Post quoted a source as saying.

The trade war between the world’s two largest economies has hurt market sentiment around the world.

“U.S.-China trade optimism continues to spur demand for risky assets such as oil, other industrial commodities, equities,” Jim Ritterbusch, president of trading advisory firm Ritterbusch and Associates, said in a note.

In China, factory activity likely expanded again in December although markets await details on the trade truce, a Reuters poll showed.

Elsewhere, investors are closely watching events in the Middle East after the United States carried out air strikes on Sunday against the Kataib Hezbollah militia group, while protesters in Iraq on Saturday briefly forced the closure of its southern Nassiriya oilfield.

Libyan state oil firm NOC said it is considering closure of its western Zawiya port and evacuating staff from the refinery due to clashes nearby.

Looking ahead to 2020 some analysts cited abundant global crude stocks as a major obstacle to efforts to rein in output by the Organization of the Petroleum Exporting Countries and its allies such as Russia.

“Even as OPEC and its non-OPEC partners endeavor to make additional supply cuts in Q1 2020, we are not convinced this will be sufficient to avert large global inventory,” said Harry Tchilinguirian, global oil strategist at BNP Paribas.

“We remain of the opinion that oil fundamentals continue to present downside risk.”

Additional reporting by Noah Browning in London and Seng Li Peng in Singapore, editing by Louise Heavens/ David Evans/Susan Fenton/David Gregorio



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Oil hits three-month highs as strong U.S. consumer spending underpins growth hopes By Reuters


© Reuters. Pumpjacks are seen during sunset at the Daqing oil field in Heilongjiang

By Aaron Sheldrick

TOKYO (Reuters) – Oil prices rose on Friday, hitting three-month highs after data showed record online spending by U.S. consumers, stoking faith in the world’s no. 1 economy even before the hoped-for end to the trade war between Washington and Beijing.

futures were up 6 cents, or 0.1%, at $67.98 a barrel at 0612 GMT, after rising to as high as $68.10, the highest since September. The West Texas Intermediate () contract was up 11 cents, or 0.2%, at $61.79 a barrel.

A survey on Thursday showed that online holiday purchases by U.S. consumers reached a record, beating analysts’ expectations and sending U.S. stocks to fresh.

U.S. consumers are “showing few signs of tightening their purse strings, which is positive for oil also,” said Stephen Innes chief Asia market strategist at AxiTrader.

Oil prices have also been buoyed by robust hopes that the New Year will usher in an end to the long-running U.S.-China trade tariff war, a dispute that has overshadowed global economic growth prospects and left questionmarks over future demand for crude.

The lingering ripple effect of the trade row showed up again in data from Japan, the world’s third-biggest economy, on Friday showing that industrial output shrank for a second month in November.

Still, the price Brent has jumped more than a quarter in 2019, while WTI is up around 35%, boosted by moves by the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, to curb production. Earlier this month OPEC and its allies agreed to extend and deepen those cuts.

“The short-term momentum remains positive although I expect Asia to content itself with remaining on the sidelines today,” said Jeffrey Halley, senior market analyst, at OANDA.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Oil prices reach three-month highs after strong online shopping by U.S. consumers By Investing.com


© Reuters.

Investing.com – Oil prices reached three-month highs on Friday after record online shopping by U.S. consumers drove optimism for the world’s biggest economy.  

Brent crude futures were up 13 cents, or 0.2%, at $68.05 a barrel at 0150 GMT. The West Texas Intermediate contract was up 13 cents, or 0.2%, at $61.81 a barrel.

A report by Mastercard showed that online holiday spending by U.S. consumers reached a new high, exceeding analysts’ forecasts and sending U.S. stocks surging.

U.S. consumers are “showing few signs of tightening their purse strings, which is positive for oil also,” according to Stephen Innes, chief Asia market strategist at AxiTrader.

Oil prices have also been buoyed by hopes that the U.S.-China trade war will soon end. The issue that has cast a shadow on global economic growth prospects and created concerns over future demand for crude.

The ripple effect of the trade row also made its way in data from Japan on Friday that showed that industrial output from the world’s third-biggest economy shrank for a second month in November.

Nonetheless, the Brent price has increased by more than a quarter in 2019, while the WTI is up around 35%. It has been boosted by the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, curbing production. Earlier this month, OPEC and its allies agreed to extend and deepen those cuts.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



China-US trade deal progress help oil prices stay near three-month highs By Investing.com


© Reuters.

Oil prices stayed close to three-month highs on Friday as the China-U.S. trade talks showed signs of progress.

futures rose 2 cents, or 0.03%, to 66.56 a barrel by 0145 GMT, whereas the U.S. West Texas Intermediate (WTI) crude was down 9 cents, or 0.15%, at $61.09 per barrel.

Both are still on track for a third consecutive weekly rise.

The trade dispute between the United States and China, both the world’s two biggest oil consumers, have affected demand previously. But recent developments have raised expectations that there will be stronger demand to come.

On Thursday, China announced import tariff exemptions for six oil and chemical products from the U.S., just a few days after both sides reached an interim trade deal. The exemption will be in force for 12 months, ending on December 26, 2020.

Deeper output cuts by major producers are also said to provide tailwind for the market.

Both JP Morgan and Goldman Sachs raised their 2020 oil price outlook earlier this week as The Organization of Petroleum Exporting Countries (OPEC)-led output cuts and an improved global trade outlook led to more optimism.

“A world with less uncertainty (following last week’s proposed U.S.-China trade agreement) was the real driver of the market optimism on the 2020 outlook,” ANZ Research said in a note.

OPEC and its allies including Russia agreed earlier in December to make a further cut of 500,000 barrels per day (bpd) from Jan. 1 on top of previous reductions of 1.2 million bpd.

A drop in inventories also helped oil prices to stay near three-month highs.

According to the Energy Information Administration (EIA), oil stockpiles fell by 1.1 million barrels to 446.8 million barrels in the week to Dec. 13.

ANZ Research stated than “an expected fall in U.S. drilling activity should support oil prices.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Oil prices surf near three-month highs after U.S. crude inventories fall By Reuters



By Florence Tan

SINGAPORE (Reuters) – Oil prices remained in touching distance of three-month peaks on Thursday, extending a robust streak that began a week ago, after data showed inventories had dropped while output cuts by major producers kept supply snug.

futures edged down 1 cent to $66.16 a barrel by 0224 GMT, while U.S. West Texas Intermediate (WTI) crude fell 3 cents to $60.90. Trading volume was thin, with not even news of President Donald Trump’s impeachment by the U.S. House of Representatives stirring the oil market.

According to weekly data released by the Energy Information Administration on Wednesday, U.S. crude inventories dropped 1.1 million barrels in the week to Dec. 13, while gasoline and distillates stockpiles rose.

“We’re near the top of trading ranges for both Brent and WTI so it’s interesting to see them holding here,” said Michael McCarthy, chief market analyst at CMC Markets in Sydney.

While there is a clear uptrend in place on the daily technical price chart for WTI to potentially move towards $61.50 a barrel, there are also near-term risks – touching that price level may encourage traders to sell, McCarthy said.

“(Trading) volumes are terrible. A lot of people have given up for the year with no scheduled events to push oil markets around,” he said.

The trend leaves oil prices set to rise for a third consecutive week, surfing momentum from announcements this month about deeper output cuts by major producers as well as the ‘Phase One’ deal between the United States and China to resolve their long-running trade war.

The deal between the world’s two largest economies has improved the global economic outlook, lifted the prospect for higher energy demand next year and underpinned oil prices.

Just the week before, the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers such as Russia agreed to deepen production cuts by a further 500,000 barrels per day (bpd) from Jan. 1 on top of previous reductions of 1.2 million bpd.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Oil hovers near three-month high on trade optimism, supply cuts By Reuters



By Jessica Jaganathan

SINGAPORE (Reuters) – Oil prices trickled a fraction lower on Tuesday but remained near a three-month high as investors kept the faith with hopes that a fully fledged U.S.-China trade deal is in the pipeline and set to stoke oil demand in the world’s biggest economies.

Brent crude oil futures () had slipped by three cents to $65.31 a barrel by 0122 GMT, while West Texas Intermediate crude () was down 4 cents to $60.17 a barrel.

Under a partial trade agreement announced last week, Washington will reduce some tariffs on Chinese imports in exchange for Chinese purchases of agricultural, manufactured and energy products increasing by about $200 billion over the next two years.

“While the partial trade deal leaves most of the tariffs in place, it marks a turning point in the dispute which will eventually lead to fully fledged agreement,” analysts from ANZ Bank said in a note on Tuesday.

The so-called ‘Phase One’ trade deal between both countries has been “absolutely completed”, Larry Kudlow, a top White House adviser said on Monday, adding that U.S. exports to China will double under the agreement.

The agreement is yet to be signed and several Chinese officials told Reuters the wording of the agreement remained a delicate issue, with care was needed to ensure expressions used in text did not re-escalate tensions and deepen differences.

JP Morgan and Goldman Sachs (NYSE:) have revised their oil price forecasts for the next year upwards, with an OPEC-led agreement to curb output further dovetailing with the improving trade outlook between the U.S. and China.

Lower supply next year due to a planned cut by the Organization of the Petroleum of Exporting Countries (OPEC) and associated producers like Russia – a grouping known as ‘OPEC+’ – and stronger economic growth expected because of the improved trade outlook between United States and China will combine to tighten the oil supply-demand balance next year, analysts from JP Morgan said.

Also supporting prices, a preliminary Reuters poll ahead of reports from the American Petroleum Institute (API) and the Energy Information Administration (EIA) showed expectations that U.S. crude oil inventories likely fell last week.

Still, U.S. oil output from seven major shale formations is expected to rise about 29,000 barrels per day (bpd) in January to a record 9.14 million bpd, the EIA said in a monthly forecast on Monday.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Oil Near Three-Month High on Cautious Optimism Over Trade Deal By Bloomberg



(Bloomberg) — Oil steadied near a three-month high on cautious optimism that a preliminary trade deal between the U.S. and China will support global fuel consumption.

Futures held near $60 a barrel in New York after settling at the highest since Sept. 16 on Friday. The deal involves China buying more American farm products and making new commitments on intellectual property, while the U.S. will suspend new levies and halve existing tariffs on $120 billion of Chinese imports. It’s expected to be signed and released publicly in early January.

While the partial trade deal leaves most of the tariffs built up over the 20-month conflict in place, it’s adding to a more positive outlook for oil prices, which were already drawing support from deeper-than-expected production cuts announced this month by OPEC and its partners. Hedge funds increased net-bullish wagers on West Texas Intermediate crude by the most in three years in the week through Dec. 10.

“Buoyancy is being generated by optimism about the economy, rising stock markets worldwide in view of the Phase-1 deal in the trade dispute, and a weak U.S. dollar,” said Eugen Weinberg, head of commodities research at Commerzbank AG (DE:) in Frankfurt.

See also: OPEC+ Deal Isn’t Worth the Paper It’s Written On: Julian Lee

for January delivery was little changed at $60.05 a barrel on the New York Mercantile Exchange as of 10:22 a.m. London time. It rose 89 cents to $60.07 on Friday, taking its weekly gain to 1.5%.

for February settlement was also little changed, trading at $65.25 a barrel on the London-based ICE Futures Europe Exchange after rising 1.6% on Friday and 1.3% last week. The global benchmark was at a $5.22 premium to WTI for the same month.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Oil prices fall but hold near three-month high on trade deal agreement By Reuters



By Jessica Jaganathan

SINGAPORE (Reuters) – Oil prices fell but remained near three-month highs on Monday after the United States and China agreed to an initial trade deal, a move market participants said could stoke oil demand and boost trade flows.

The United States and China cooled their trade war on Friday, announcing a “phase one” agreement that reduces some U.S. tariffs in exchange for what U.S. officials said would be a big jump in Chinese purchases of American farm products and other goods.

Brent crude oil futures () fell 23 cents, or 0.4% to $64.99 a barrel by 0101 GMT, after closing at a near three-month high on Friday.

West Texas Intermediate crude () was down 23 cents or 0.4% to $59.84 a barrel.

“It seems the market has now fully priced the phase 1 trade agreement so we are going to need further news if we are going to push through the important (technical) resistance that is just ahead of crude oil,” said Michael McCarthy, chief market strategist at CMC Markets.

The last-minute agreement that averted additional tariffs on Chinese goods totaling $160 billion lifted oil prices on Friday but investors remained cautious on Monday as they awaited details of the trade deal that is yet to be officially signed.

U.S. Trade Representative Robert Lighthizer said on Sunday the deal will nearly double U.S. exports to China over the next two years and is “totally done” despite the need for translation and revisions to its text.

China’s State Council’s customs tariff commission said on Sunday that it has suspended additional tariffs on some U.S. goods that were meant to be implemented on Dec. 15.

Still, concerns of China’s slowing economy stoked worries of slowing oil demand in the key consumer after policy sources said China plans to set a lower economic growth target of around 6% in 2020 from this year’s 6-6.5%.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.