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Alexander Kuptsikevich

Forex: U.S. Growth Demand More Important Than OPEC’s Crude Oil Reductions

Crude reached higher highs in the first ten days of November than it had in more than two years, then experiencing a correction of roughly 5%. After that, both Brent and WTI went into recovery mode. Yet, while the European oil benchmark recovered half the correction to reach $63 per barrel approx., the U.S. benchmark has moved beyond previous peaks, rising to 58.37 since last Tuesday. The bulk of oil in Europe and Asia comes from the members of “OPEC Plus”, including Russia and nearly a dozen ...

Alexander Kuptsikevich

Forex: Ruble Gains as Oil Falls: The Correlation is Reversed

Yesterday, the ruble managed to keep resistance levels at 60.50 for USDRUB. During the day, the currency pair lost 0.9%, down to 59.68, as oil fell by 1.3% to $61.10 per barrel (Brent). This could be viewed as a clear sign of the Russian currency’s strength, as its movements occurred alongside a decline in oil price. The ruble was seen to decisively lose its dependence on the short-term dynamics of Crude. Essentially, what we saw yesterday was a repeat of the trend observed over the last few ...

Alexander Kuptsikevich

Forex: Ruble Suffers Biggest Drop in More Than a Year

The Russian ruble seems to have run out of luck. Yesterday, the currency lost 1.5% against the dollar and 2.5% against the euro, with this drop coming in as a result of several negative factors. The API reported an increase in oil inventories, which may be confirmed later in the day in the official report. This added pressure on oil quotes, as investors focused on the issue of oversupply amid sustaining high oil inventories. The markets seem set to register profits in assets that have ...

Alexander Kuptsikevich

Forex: USD stronger after positive NFP, wages disappoint

The U.S. Labour market has demonstrated particular strength. The increase in payroll employment to 261K in October, together with the revision of September data to 18K, marks almost the same increase between the -33K reported last month and the 311K increase expected. In addition, the increase in manufacturing jobs by 24K in October is a positive sign as far as the state of the industry is concerned, as is the drop of unemployment rate to 4.1.%. At the same time, average hourly earnings came ...

Alexander Kuptsikevich

Forex: Potential scenarios for Friday’s employment report

The markets are now waiting for Friday’s employment data for the month of October. September’s numbers were shockingly poor, with NFP coming in at -33K, and analysts are suggesting that the labour market will now be attempting to make up for the previous negative figures. Though the least predictable, the employment report is deeply significant and often leads to violent market reaction. Let’s look at several potential scenarios regarding tomorrow’s releases. The average market forecast for ...

Alexander Kuptsikevich

Forex: The $60 mark for Brent may not become reality this year

Yesterday, the markets displayed major signs pointing towards a strong oil growth momentum, including Brent price nearing important resistance level of previous highs, anxiety regarding supplies in the Middle East, the dollar falling against most competitors, while U.S. data revealed a significant fall in crude production by almost 1.5 million barrels per day and a drop in inventories by 5.7 million barrels by week, 16.4 in 4 weeks. Yet, this was not enough to send oil to previous peak values. ...

Alexander Kuptsikevich

Forex: Unexpected drop in U.S. payrolls triggers risk-off sentiment

Undoubtedly, the September U.S. Nonfarm Payrolls were shockingly bad. At the beginning of the previous week, analysts had expected a growth of 90K, with a series of very strong releases of business activity indicators in the U.S. significantly raising expectations. On Thursday, we had even observed some markets rallying as U.S. assets were on particularly high demand. Last Friday’s NFP release showed how hasty those purchases were. Nonfarm Payrolls decreased by -33K, while data for the previous ...

Alexander Kuptsikevich

Forex: Not so rosy long-term consequences for USD from the Fed policy

The Fed announced the beginning of a reduction in their massive holding of bonds and mortgage-backed securities starting in October, citing the impact of the recent hurricanes on the economy as temporary and not detrimental to overall economic growth. The scale of reductions will gradually increase, starting from 10 billion USD a month and reaching 50 billion USD within a year. Under existing conditions, the Fed’s balance sheet will decrease by $300 billion to $4.2 trillion. If the program ...

Alexander Kuptsikevich

Forex: The Fed caused a storm in the markets and explosive growth of USD

The Fed promises to start shrinking their balance from October and has kept the rate unchanged. However, committee's forecasts caused a powerful wave of dollar growth immediately after the publication. The committee is set to hold a third raise this year and expects to face three more rises the next year. In addition, the forecasts for GDP growth were revised up for this year from 2.2% to 2.4%. This is an unexpected turn when many market participants expected to see a downward revision. A ...