WTI/USD – Crude Unchanged at $47, US Consumer Numbers Meet Expectations

US crude has started the week quietly. In Monday’s North American session, WTI/USD futures are trading at $46.85 per barrel. Brent crude futures are trading at $49.10, as the Brent crude premium stands at $2.25. In economic news, Personal Spending gained 0.3%, while Personal Income rose 0.4%, as both indicators matched the forecast. On Tuesday, the US will release CB Consumer Confidence, a key indicator.

Central bankers gathered at Jackson Hole late last week, and the highlight of the economic summit was a speech from Janet Yellen on Friday. The Fed chair was crystal clear in her remarks, saying the case for a rate increase had “strengthened in recent months”. Yellen noted that the economy was close to maximum employment, inflation was steady, and consumer spending remained solid. At the same time, Yellen did not provide any timeline on a rate hike nor did she spell out what the Fed wants to see before pressing the rate trigger. On Friday, Fed members Dennis Lockhart and Stanley Fischer both came out in favor of two rate hikes in 2016. Although the Fed has revived the possibility of a September hike, a December move is considered much more likely, with odds as high as 65% according to Goldman Sachs. However, given that any move by the Fed will be data-dependent, plenty can still happen before the Fed holds its policy meeting on September 21.

After some dismal readings in the second quarter, US durable goods orders recovered in July. Core Durable Goods Orders rebounded after two straight declines, posting an excellent gain of 1.5%. This easily beat the forecast of 0.4%. Durable Goods Orders also impressed with a sharp gain of 4.4%, compared to the forecast of 3.4%. This marked the strongest gain since January. The strong readings point to stronger demand for durable goods, which should translate into increased investment and hiring in the business sector. There was more good news on the labor front, as unemployment claims dropped to 261 thousand, its third decline in as many weeks.

WTI/USD Fundamentals

Monday (August 29)

• 8:30 US Core PCE Price Index. Estimate 0.1%. Actual 0.1%
• 8:30 US Personal Spending. Estimate 0.3%. Actual 0.3%
• 8:30 US Personal Income. Estimate 0.4%. Actual 0.4%

Tuesday (August 30)

• 10:00 US CB Consumer Confidence. Estimate 97.2

*Key events are in bold

*All release times are EDT

WTI/USD for Monday, August 29, 2016

WTI/USD August 29 at 12:00 EDT

Open: 47.18 High: 47.25 Low: 46.63 Close: 46.85

WTI USD Technical

• WTI/USD has shown limited movement in the Monday session
• 46.69 was tested earlier in resistance and remains a weak line
• There is resistance at 50.13

Further levels in both directions:

• Below: 46.69, 43.45 and 39.32
• Above: 50.13, 53.50 and 56.50

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