Crude oil rallies over 1% but supply glut worries still weigh

Crude oil futures rallied over 1% on Friday, on the back of a weaker dollar but the commodity still remained within close distance of a nearly six-year low as ongoing concerns over a glut in global supplies continued to weigh.
On the New York Mercantile Exchange, U.S. crude oil for delivery in March traded $0.56 or 1.26% higher to $45.10 a barrel during European early afternoon trade.
Prices rose $0.08 or 0.18% on Thursday to settle at $44.53.
Futures were likely to find support at $43.58, Thursday's low and a nearly six-year low and resistance at $46.55, the high from January 27.
Oil prices have fallen nearly 60% since June as the Organization of Petroleum Exporting Countries resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slipped 0.27% to 94.71, moving away from last Friday's more than 11-year highs of 95.77.
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Euro to Canadian Dollar (EUR/CAD) Exchange Rate Forecast: German Retail Sales Jump, Canadian GDP, Eurozone CPI, Unemployment Rate Ahead

The Euro to Canadian Dollar (EUR/CAD) exchange rate recorded gains early in Friday’s European session after German Retail Sales reached higher than forecast levels.
Annual Retail Sales were pulled out of the -1.0% contraction to +4.0%. Economists had expected a smaller 3.6%
Earlier… The Euro to Canadian Dollar (EUR/CAD) exchange rate recorded gains in the second half of Thursday’s European trading after mixed German data and oil price declines.

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Wall Street falls 1 percent on earnings; Apple rallies late

NEW YORK (Reuters) - U.S. stocks closed more than 1 percent lower on Tuesday as disappointing results from a number of bellwether companies pointed to weakening conditions, while an unexpected decline in durable goods orders also weighed on sentiment.
The day's losses were broad, with nine of the 10 primary S&P 500 sectors lower on the day, though tech <.SPLRCT> was the biggest drag by far. The group lost 3.3 percent in its biggest one-day drop since November 2011, in the wake of results from industry bellwether Microsoft. Industrial shares fell, led by Caterpillar.
The two names were the biggest decliners on the Dow, but fellow components Procter & Gable (N:PG) and DuPont Co (N:DD) also tumbled.
Microsoft (O:MSFT) fell 9.3 percent to $42.66 a day after the main engine of its historic earnings power - selling Windows and Office to big businesses - showed signs of waning.
Heavy machinery marker Caterpillar (N:CAT) gave an outlook below expectations, warning the recent plunge in oil prices would hurt its energy equipment business. Shares dropped 7.2 percent to $79.85.
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Gold prices slightly weaker in Asia with focus on Fed meeting

Gold prices eased on Wednesday with investors looking ahead to comments from the Federal Reserve on the prospects for a rate hike this year.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery eased 0.05% to trade at $1,292.30 a troy ounce.

Overnight, gold erased losses to hit the highest levels of the session on Tuesday, after data showed that U.S. durable goods orders fell unexpectedly in December, fuelling concerns over the strength of the economy.

Prices fell by as much as $7.10 earlier to hit a daily low of $1,273.30, the weakest level since January 19.

Also on the Comex, silver futures for March delivery fell 0.03% at $18.078 a troy ounce.

In a report, the U.S. Commerce Department said that total durable goods orders, which include transportation items, fell by 3.4% last month, compared to expectations for a gain of 0.5%.
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Apple CFO Sees Sales Growth as Hedges Ease Currency Swings

Apple Inc., which has already taken its most aggressive steps in years to blunt the effects of currency swings on revenue, said sales will keep growing this quarter even with the strengthening U.S. dollar.
“We’re guiding to a strong March quarter with revenue up between 14 and 20 percent and that’s in spite of the fact that you’ve heard from many U.S. companies these days that foreign exchange has become a challenge,” Chief Financial Officer Luca Maestri said Tuesday in an interview.
The dollar’s surge is reducing earnings at U.S. companies from Procter & Gamble Co. to Pfizer Inc. and DuPont Co. that make a large portion of their sales abroad. Apple, which got more than half its revenue in the most recent fiscal year from outside the U.S., has benefited from hedging and raised prices on iPhones in Russia and mobile software applications from Canada to Europe. The higher local prices help compensate when the revenue is converted back into dollars.

Apple’s shares rose in extended trading after it reported profit and revenue that exceeded analysts’ average estimates for the quarter ended Dec. 27, fueled by a 46 percent surge in iPhone shipments to 74.5 million units.
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Banks asked to increase private sector lending

KARACHI: Governor State Bank Ashraf Mahmood Wathra has stressed upon the banks to focus on private sector lending and deposit mobilization.
In this context he said that the average spread of all banks continue to remain high and should be reasonably rationalized. “SBP shall review the position by the end of June 2015 and may take regulatory measures to lower the spread,” he added.
He was addressing a meeting of Presidents/CEOs of all commercial Banks and DFIs at SBP Head office in Karachi on Monday. The Governor took stock of operational activities and performance and issued important directives to enhance the efficiency of banks.
Discussing the condition of Islamic Banks and its profitability, Governor highlighted that Islamic banks should reward their customers appropriately in line with their surging profits. “Banks were advised to come up with their own solutions or the SBP will apply Shariah compliant measures to address the issue,” he instructed.
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Apple Inc. Pay Now Accepted By Western Union

Apple expands its mobile payment service in efforts to give customers more options and reach a key demographic.

Western Union is the latest company to work with ApplePay to provide bill pay and money transferring services. The company’s flagship locations and drugstore kiosks will soon support money transfers via the service. One Duane Reade location in New York City already offers support.

Apple Pay makes transferring money simple

The new support from Western Union means people can use their iPhones to fund money transfers or pay bills. Sending money transactions still requires a registered debit or credit card at a participating bank to be loaded into Passbook. The new contact-less payment terminals allow iPhone 6 / iPhone 6 Plus users to hold their smartphone near the reader and pay using their fingerprint from the Touch ID.
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China's Li says to create 10 million jobs in 2015: China Daily

SHANGHAI (Reuters) - China's Premier Li Keqiang pledged to create at least 10 million new jobs in 2015, the state run China Daily newspaper said on Tuesday, despite economic growth that slowed to its weakest pace in nearly a quarter of a century last year.
Beijing views healthy employment levels as a top policy priority and an important condition for social stability. Last year the country created around 13 million jobs.
"Stress tests show the possibility of a large amount of unemployment, which could lead to social instability if the economy cools down too fast," Li said at a meeting with economic experts and business leaders on Monday, the newspaper said.
China's economy grew at its slowest pace in 24 years in 2014 as property prices cooled and companies and local governments struggled under heavy debt burdens, pressuring Beijing to take aggressive steps to avoid a sharper downturn.
A weakening jobs market would raise alarm bells for the government as it ratchets up efforts, including an interest rate cut towards the end of last year, to support a slowing economy.
China targeted a registered urban unemployment rate below 4.6 percent last year, although many economists believe the real number may be higher given the difficulty of tracking the country's army of migrant workers.
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Toyota to move to merit-based pay for factory workers: Nikkei

Toyota Motor Corp (T:7203) will change the way it pays factory workers, focusing on their performance rather than their seniority, the Nikkei reported on Monday.
Toyota's new arrangement, designed to attract young talent, will apply to about 40,000 employees, or about 60 percent of its workers, aged between 18 and 65, according to the Nikkei. (http://s.nikkei.com/1EMRveN)
The automaker has unveiled the proposal to its labor union and is hopeful of rolling it out next January, the Nikkei said.
Employees will be evaluated twice a year, with wages adjusted every six months, the Nikkei reported.
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Euro to US Dollar (EUR/USD) Exchange Rate Rallies from 11-Year Low, Syriza Win Deemed No Threat to Eurozone

The Euro to US Dollar (EUR/USD) exchange rate firmed from its lowest level in 11-years on Monday as economist speculate that Syriza’s Greek election victory would not be a threat to the wider Eurozone.

The Euro to US Dollar exchange rate hit a session high of 1.126

Hopes that a compromise will be reached between Greece’s new Prime Minister Alexis Tsipras and the Troika over austerity and bailout terms led to the Euro shaking off earlier losses and rally against the majority of its most traded peers.
The Troika of lenders that bailed out Greece includes the European Union (EU), European Central Bank (ECB), and International Monetary Fund (IMF) – imposed big budgetary cuts and restructuring in return for the money. The austerity messages imposed on the nation led to unemployment soaring to more than 25%.
‘The new Greek government will be ready to co-operate and negotiate for the first time with our peers a just, mutually beneficial and viable solution. The troika for Greece is the thing of the past,’ Mr Tsipras said.
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Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast to Trend within Tight Range on Potential Currency War

The Euro to Australian Dollar (EUR/AUD) exchange rate edged is trending within a narrow range on Friday morning.
After the European Central Bank opted to loosen monetary policy in order to combat deflation in the Eurozone, the shared currency slumped across the board. Friday has seen the decline extended versus many of its major peers.
In the initial aftermath of the ECB decision, the ‘Aussie’ (AUD) gained thanks to demand for gold amidst risk-averse trading. However, anxieties that the policy easing from Canada and Europe will provoke a devaluation battle have amplified cautious trade. The Reserve Bank of Australia is thought to be the most likely candidate to follow the easing trend at their next policy meeting.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.4164.
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NYMEX crude gains slightly in early Asia with U.S. stockpile data ahead

Crude oil prices rose in early Asia on Tuesday with U.S. industry petroleum stockpile data scheduled later in the day a focus.

The American Petroleum Institute will release its estimates of U.S. crude, distilalte and gasoline stoocks on Tuesday, followed by more closely watched U.S. Department of energy data on Wednesday.

Last week, API reported a crude build of 5.7 million barrels for the previous week, and the Department of Energy said stocks rose by 10.07 million barrels in the same time frame.

On the New York Mercantile Exchange, crude oil for delivery in March gained 0.08% to trade at $45.13 a barrel.

Crude oil futures erased losses to hit the highest levels of the session on Monday, as investors reacted to bullish comments made by OPEC Secretary-General Abdalla El-Badri.

On the ICE Futures Exchange in London, Brent oil for March delivery inched up 27 cents, or 0.55%, to trade at $49.06 a barrel. Earlier in the day, Brent touched a low of $47.59, down $1.20 on Monday.
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Oil climbs ahead of U.S. storm following Saudi transition

NEW YORK (Reuters) - Oil prices were up for a second straight day on Monday ahead of the first major snowstorm expected this year in the U.S. Northeast.
Gains were limited, however, by the absence of any market disruption in top oil exporter Saudi Arabia after King Abdullah's death.
An 11-year high in the U.S. dollar <=USD> against other major currencies, and fears of fresh instability in the euro zone after a decisive Greek election victory by the left-wing Syriza party also capped oil's potential for rebound, traders said.
Light snow began falling on the U.S. East Coast on Monday morning, the first signs of a potentially historic blizzard that officials predicted could dump up to 3 feet of snow in the coming day, snarling transportation for millions of people.
The National Weather Service (NWS) issued a blizzard warning for New York City and surrounding areas between coastal New Jersey and Connecticut, beginning 1:00 p.m. EST (1800 GMT) on Monday and worsening overnight into Tuesday morning. It warned of two days of winter storms across the East Coast, from Pennsylvania to Maine.
"Crude is getting some help from supportive heating oil ahead of the blizzard, although with all the flight cancellations, it might end up being a bearish event on oil demand," said Phil Flynn, analyst at Chicago's Price Futures Group.
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Rupee strengthens against dollar for fourth consecutive week

Rupee continued to rule firm for the fourth consecutive week, surging another 45 paise to end at 61.42 against the US dollar.

Persistent selling of dollars by banks and exporters amid sustained foreign capital inflows into equity market helped the domestic currency strengthen against the greenback. 

Banks and exporters preferred to reduce their dollar position on hopes of further capital inflows as foreign portfolio investors (FPIs) infused $733.98 million during the week. 

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Gold pulls away from 5-month highs as ECB rally subsides

Gold prices fell on Friday, pulling away from the previous session's five-month highs hit following news the European Central Bank is launching a large scale quantitative easing program.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 0.44% to $1,295.00.
The February contract ended Thursday's session 0.54% higher at $1,300.70 an ounce.
Gold futures strengthened after the ECB announced on Thursday that it would launch a €60 billion monthly bond buying program that would start in March and last until September 2016, in a bid to stave off the threat of deflation in the euro area and boost growth.

In total, the program could total €1.08 trillion, much higher than market expectations for a figure of around €500 billion.
Commenting on the decision, ECB President Mario Draghi acknowledged the action the ECB took last year was “insufficient” to ward off the threat of deflation in the region. The annual rate of inflation in the euro area fell into negative territory last month, dropping 0.2%.
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Crude oil remains supported by news of Saudi King's death

Crude oil futures rose on Friday, pulling away from nearly six-year lows as news of Saudia Arabia King Abdullah's death lent support to the commodity, although sustained concerns over a supply glut continued to weigh.
On the New York Mercantile Exchange, U.S. crude oil for delivery in March traded $0.12 or 0.25% higher to $44.43 a barrel during European early afternoon trade.
Prices plummeted $1.47 or 3.08% on Thursday to settle at $46.31.
Futures were likely to find support at $44.78, the low from January 13 and a nearly six-year low and resistance at $49.09, Thursday's high.
Oil prices rallied following reports of the death of Saudi Arabia's King Abdullah amid growing speculation over a possible shift in the kingdom’s policy of allowing crude prices to fall.
The 90-year-old monarch, who was admitted to hospital in December with pneumonia, will be succeeded by his half-brother, Crown Prince Salman.
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Forex Market: EUR/CHF daily trading forecast

Yesterday’s trade saw EUR/CHF within the range of 0.9842-1.0033. The pair closed at 0.9888, losing 0.77% on a daily basis, which also marked a third consecutive daily drop.
At 7:54 GMT today EUR/CHF was down 0.08% for the day to trade at 0.9894. The pair touched a daily low at 0.9868 at 6:00 GMT.

Fundamentals

Euro zone

Manufacturing and Services PMI – preliminary data France’s manufacturing PMI probably remained in the zone of contraction for a ninth consecutive month in January, with the preliminary index estimate being at 48.1, according to the median forecast by experts. The final PMI stood at 47.5 in December, as reported on January 2nd, down from a preliminary reading of 47.9. December’s PMI level has been the lowest since August 2014, when the final index was reported at 46.9. Values below the key level of 50.0 indicate that the majority of respondents in the survey expressed pessimism in regard to activity in the sector. Markit Economics is expected to release the preliminary figure at 8:00 GMT.
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Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Drop on Canadian Inflation

The Canadian Dollar took a tumble this week when the Bank of Canada (BOC) made a surprise announcement, slashing interest rates from 1.0% to 0.75%.
The BOC was forced to cut rates after Canada’s biggest commodity, oil, depreciated by nearly 60% in the past six months. With no hope in sight for oil gains, Canada’s inflation is likely to have tanked, along with the Canadian Dollar.
However, some economists believe the rate cut could boost the North American economy far quicker than forecast.
Economist Peter Hall stated: ‘The rate cut and the drop in the ‘Loonie’ comes at a time when manufacturing has really been humming, and it’s possible we’ll start seeing results a lot sooner than even the Bank of Canada is expecting.’

GBP and CAD Exchange Rates Fall on BOC and BoE Announcements

Meanwhile, the Pound Sterling exchange rate also took an unfortunate tumble this week due to central bank decisions. The Bank of England (BoE) announced that all members of the Monetary Policy Committee (MPC) had voted unanimously to keep interest rates at the current 0.50% benchmark.
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Emirates Islamic Bank selects Finacle solutions

DUBAI,

Emirates Islamic Bank (EI), a leading Sharia-compliant banking institution in the Middle East, has selected the Infosys Finacle Islamic Banking solution to run its operations.
With Finacle, EI can leverage a world-class platform that will enable the bank to serve its customers with greater efficiency, manage its operations more effectively, and meet the required reporting and compliance obligations.

Some of the highlights of the deal are:
•    Finacle Islamic Banking solution since provides a cost-effective, customer-centric and Sharia-compliant banking platform with proven scalability and a lean and open architecture for easy implementation.
•    EI will be able to easily create a wide range of products and services that will be compliant with the stringent Sharia business rules and accounting rules with the help of Finacle.
•    Based on a modern service-oriented architecture (SOA) platform with straight through processing (STP) capabilities, the solution will enable greater operational efficiency and effectiveness for EI.
•    The Finacle Islamic Banking Solution will also ensure transparency of accounting and profit-sharing, along with rigorous operational risk control.

Michael Reh, senior vice president and global head of Finacle, Infosys, said: “Islamic banks have shown strong growth over the last few years, with significant global potential for further expansion.”
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Old Lady inquiry sparks MPs' ire: Lord Grabiner's foreign exchange probe leaves public in the dark

THE BANK of England risks losing access to vital sources of market data thanks to banks cracking down on traders gossiping, Lord Grabiner warned yesterday. Top barrister Grabiner was hired to investigate what Bank of England staff might have known about foreign exchange manipulation. 

Lord Grabiner, the barrister who has led an investigation into the foreign exchange rate rigging scandal, said the $5.3tn-a-day forex market needs to be regulated – but not too much, or the City could lose business to Frankfurt or New York.

Appointed by the Bank of England last March to review allegations that its staff knew about foreign exchange rate manipulation, Grabiner told MPs on the Treasury Committee: “One of the curiosities of this marketplace is that it was not regulated.”

The Financial Conduct Authority fined five leading banks including the bailed-out Royal Bank of Scotland a total of £1.1bn in November for rigging the foreign currency markets.

Penalties from the US authorities brought the total tally to a record £2.6bn. The investigations centred on traders’ use of chat rooms to coordinate currency rates in the minutes leading up to a daily 4pm “fix”.

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