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

By Ritu, Capital Sands 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. Brent crude futures were up 6 cents, or 0.1%, at $67.98 a barrel , 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 Axi Trader. Oil prices have also been buoyed by robust hopes that the New Year will usher in an ...
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Oil hovers near three-month high on trade optimism, supply cuts

By Ritu, Capital Sands 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, 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 ...
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Pound Gains on Brexit Optimism as Focus Shifts to Trade Talks

By Ritu, Capital Sands Want the lowdown on European markets? In your inbox before the open, every day. Sign up here. The pound rallied for a second day amid optimism a speedy resolution to the Brexit deadlock is in store after the Conservative Party’s election victory. Sterling advanced against all its major peers after Chief Secretary to the Treasury Rishi Sunak said the government plans to put its Brexit legislation before Parliament ahead of Christmas to ensure the country will leave the European Union as planned at the end of January. “With the Tories’ decisive victory, U.K. markets should quickly shift focus to the coming trade negotiations and spending priorities,” Audrey Childe-Freeman and Tim Craighead, strategists at Bloomberg Intelligence, wrote in a research note. “Sterling has room to keep running.” The pound climbed 0.6% to $1.3415 as of 7:11 a.m. in London after surging as much as 2.7% on Friday ...
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Brexit relief for UK economy might not last long

By Ritu, Capital Sands Britain's economy will cast off some of the Brexit uncertainty that has held it back since 2016 after Prime Minister Boris Johnson's election triumph, but the risk remains of another "cliff-edge" showdown with Brussels in a year's time. With Britain's exit from the European Union on Jan. 31 now a foregone conclusion, the question for investors is whether Johnson will stick to his campaign promise not to delay the end-of-2020 deadline for a new EU trade deal. That deadline is widely seen as tough to meet, given the scale of issues to be resolved. In the short term, the biggest election victory for Johnson's Conservative Party since Margaret Thatcher's 1987 triumph removes a major brake on growth: the deadlock in parliament over how, or even whether, to proceed with Brexit. Johnson said in a victory speech on Friday that Britain would leave the EU on Jan ...
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Sterling sparkles after election poll, yuan up on trade deal reports

By Ritu Capital Sands The pound rose to a three-and-a-half year high versus the euro and the highest in more than a year versus the dollar after exit polls suggested a win for the Conservatives, which should help ensure the UK's smooth exit from the European Union. The Chinese yuan rose in offshore trade and the Japanese yen fell after a source told Reuters that the United States and China have agreed some tariff reductions and a delay on tariffs set to go effect on Dec. 15. The early results suggest the election will relieve almost four years of uncertainty about when Brexit would take place, which should be supportive of the pound. A successful scaling back of trade tension would relieve one major headwind to economic growth, which suggests lower demand for the safe-haven yen. Avoiding new tariffs should also be a boost to China's slowing economy, which should ...
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StockBeat: Dovish Fed, Dominant Tories Push Europe Markets Higher

By Ritu, Capital Sands European stocks found their feet again on Wednesday after the Federal Reserve signalled that it’s likely to remain on hold throughout next year, seemingly convinced that historically low jobless rates won’t create enough inflationary pressure to warrant a rate hike. By 5 AM ET (1000 GMT), the benchmark Stoxx 600 was up 0.3% at 407.50, while the FTSE MIB was up 0.7% and the FTSE 100 was up 0.6%. Airlines and semiconductor stocks were among the biggest winners. The biggest gainer on the continent was, however, Russia's RTS, where the heavily-weighted commodities companies all profited from the dollar’s post-Fed decline. A weaker dollar generally supports prices for commodities from oil to base metals and gold. The FTSE’s gain was all the more notable, given that it came against the backdrop of sterling strength – GBP/USD was steady at above $1.32 in morning trade in London. Traders ...
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Forex – U.S. Dollar Slips After Fed; Pound Gains Ahead of ECB Meeting, Election

By Ritu, Capital Sands The U.S. dollar index that tracks the greenback against a basket of other currencies slipped 0.1% to 97.035 by 10:02 PM ET. Overnight, the Federal Open Market Committee (FOMC) left its benchmark rate unchanged in the range of 1.5% to 1.75%. "Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective," the FOMC said in its statement. In July, the Fed cut interest rates for the first time since the Financial Crisis, more than a decade ago. Two further rate cuts followed the July cut. “In order to move rates up, I would want to see inflation that’s persistent and that’s significant,”Fed Jerome Powell at a news conference in Washington. "A significant move up in inflation that's also persistent before raising rates to address inflation ...
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