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XTB TRADEBEAT

Large DOE build a concern for oil bulls; Fed in focus

Summary:

  • DOE inventories show big jump to 6.2M
  • ADP remains above 200k for 5th consecutive month
  • DE30 surges higher after labour day
  • Crypto mixed as France slashes tax on assets
  • Fed rate decision at 7PM (BST); No press conference

The was a surprisingly large jump in the weekly DOE inventory release which has put some pressure on the oil price with Brent falling down to its lowest level of the day in the minutes following the release. Turning our attention to the figures themselves the headline reading showed a huge jump in rising to 6.2M from 2.2M last time out - far higher than the expected 1.0M.

The US labour market continues to go from strength to strength according to the latest data just released, with the ADP showing a 5th consecutive 200k+ reading. The figure itself for April came in at 204k, marginally higher than the 200k expected but below the prior print of 228k (revised lower from 241k). 

European investors returned from holiday in an upbeat moods (yesterday many stock markets in Europe were closed due to Labour Day). Almost all major stock benchmarks from the Old Continent post gains with majority of them with the DE30 surging over 1.5% and popping above the 12800 mark at one point.  

It’s been a quiet few days in the crypto space with the markets quietening down and trading fairly narrow ranges. Looking through revelations regarding virtual currencies it’s worth paying special attention to the news coming from France where the State Council of Taxation announced a notable cut of financial penalties on gains from cryptocurrencies such as Bitcoin, Ethereum and so on. Furthermore, it signaled that a tax rate on gains from digital currencies will be substantially lowered from the current 45% rate to 19%.

Attention now turns to this evening when in just a couple of hours the Fed will announce their latest rate decision. Although the Federal Reserve is unlikely to break its tradition, and therefore no one expects a rate hike at today’s non-press conference meeting, the event could equip investors with additional hints with respect to the rate outlook for the remainder of 2018. A preview can be found here

 

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