{"id":108553,"date":"2017-07-06T06:45:16","date_gmt":"2017-07-06T10:45:16","guid":{"rendered":"http:\/\/countingpips.com\/?p=108553"},"modified":"2017-07-06T06:45:16","modified_gmt":"2017-07-06T10:45:16","slug":"divided-fed-keeps-markets-directionless-oil-recovers-slightly","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/07\/divided-fed-keeps-markets-directionless-oil-recovers-slightly\/","title":{"rendered":"Divided Fed keeps markets directionless; oil recovers slightly"},"content":{"rendered":"
July 6, 2017<\/div>
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Article by ForexTime<\/a><\/p>\n

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Minutes from the Federal Reserve\u2019s meeting on 13-14 June showed that monetary policy members were split over the timing of shrinking the balance sheet. While some Fed officials want to kick off the process for reducing the holdings of treasuries and asset-backed securities in September, others want to see more clues on inflation, which has been edging lower. These mixed signals have kept the bulls and bears on the sidelines and that is why it is not surprising to see a muted market reaction.<\/p>\n

While U.S. Treasury yields declined slightly, they are still trading at multi-week highs, providing little incentive to short the U.S. dollar. Traders are still awaiting Friday\u2019s Labor Report for fresh signals on the health of the U.S. job market. I think this report will be of more importance than the released minutes and will be a critical test to the U.S. currency. While charts are still indicating oversold signals on the USD, it will require a fundamental catalyst to convince bulls to return. The 138,000 jobs added to the economy in May came sharply below the expected increase of 185,000. Wage growth also disappointed, with average earnings rising 2.5% annually. If the NFP report managed to surprise by moving to the upside on Friday, the USD will likely find a near-term bottom. However, the headline figure would not be enough, even if it came above 180,000. Wage growth is what\u2019s needed to narrow the gap between the Fed\u2019s dot plot and the markets own dot plot. Today\u2019s agenda includes the ISM Non-Manufacturing report and ADP Employment Change; if these report more robust figures, they could provide fresh support to the USD.<\/p>\n

Oil prices made most of the headlines yesterday after declining more than 4%. The steep fall occurred after an eight-session rally, but thanks to the American Petroleum Institute report on Wednesday, which showed a huge drop of 5.8 million barrels in crude supplies, an end was put to the steep fall. Today\u2019s EIA Report will likely confirm that inventories declined last week by more than 2 million barrels. Overall, one report is not enough to generate a bullish market sentiment. It requires steady declines in inventories along with a drop in drilling activities.\u00a0 Traders will also keep a close eye on Libya\u2019s and Nigeria\u2019s production, which accounted for half of OPEC\u2019s production increase in June. Given that nothing has changed fundamentally this week and yesterday\u2019s selloff looks mostly technical, I believe prices will stabilize for the rest of the week.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Disclaimer:\u00a0<\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime Minutes from the Federal Reserve\u2019s meeting on 13-14 June showed that monetary policy members were split over the timing of shrinking the balance sheet. While some Fed officials want to kick off the process for reducing the holdings of treasuries and asset-backed securities in September, others want to see more clues on […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-108553","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/108553","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=108553"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/108553\/revisions"}],"predecessor-version":[{"id":108563,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/108553\/revisions\/108563"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=108553"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=108553"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=108553"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}