WTI Oil Extends Rise Above $40 Level

March 18, 2016

West Texas Intermediate oil has climbed another 1.8% to $40.93 per barrel.  There has been a rebound of 56.6% since February 11 when oil touched its lowest level since May 2003.

The rebound in oil has maintained a bid tone in share prices.  The DOW is 0.7% higher.  Stocks have risen 0.5% in Spain and Italy and 0.3% in France, Germany and Great Britain.  In the Pacific Rim, equities climbed 1.7% in China, 1.3% in Hong Kong, 1.1% in India, 0.9% in Singapore and Taiwan, and 0.8% in New Zealand, but Japan’s Nikkei relapsed 1.3%.  Emerging market stocks have performed generally well.

The dollar is steady against the Swiss franc, sterling and yen.  It has climbed 0.6% versus the kiwi, 0.3% relative to the euro and Aussie dollar but slipped 0.1% against the loonie and yuan.

Comex gold settled back 0.5% to $1,251.86 per troy ounce.

The 10-year Japanese JGB yield fell four basis points to -0.10%.  The 10-year Treasury is down a basis point at 1.88%, and 10-year German bunds and British gilts are unchanged.

The Bank of Chile kept its policy rate unchanged at 3.5%.  The last change was a rise of 25 basis points in December.

The Bank of Russia’s 11.0% policy interest rate was likewise not changed.  It’s last cut was in July 2015.  A statement from officials suggests the rate could stay at current levels for longer than thought earlier.

New York Fed President Dudley warned of increased risks to the economy.  Boston Fed President Rosengren and St. Louis Fed President Bullard also speak publicly today.

Canadian retail sales reversed December’s 2.1% drop, climbing 2.1% in January to 6.4% above the year-earlier level. The results were stronger than forecast.

Canadian consumer prices on a seasonally adjusted basis fell 0.2% in February, reducing on-year inflation to 1.4% from 2.0%.  Core inflation dipped 0.1 percentage point to 1.9%. These data were weaker than forecast.

The U.S. consumer sentiment index compiled by Reuters and the University of Michigan fell 1.7 points to a reading of 90.0 in March, matching October’s low and constituting the second weakest outcome since the start of 2015.

Hourly labor costs in the eurozone recorded a 1.3% on-year increase last quarter, up from 1.1% in 3Q15.  Regular wages were unchanged at a 12-month 1.5% increase.

German producer prices fell 0.5% on month in February, widening the 12-month rate of decline to 3.0% from 2.4% in January.  Energy fell 9.4% year-on-year, while other producer prices collectively dropped 0.7%.

Germany’s indices of leading and coincident economic indicators respectively declined 0.5% and rose 0.3% in January.  The LEI had fallen 0.2% in January.

Dutch consumer sentiment worsened three points to a 13-month low of -4 in March.

Japanese department store sales recorded on-year growth of 0.2% in February after posting a 1.9% decline in January.

Icelandic CPI inflation slowed 0.2 percentage points to 0.9% in February.

South Korean PPI deflation deepened 0.1 percentage point to -3.4% in February.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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