US Oil Inventory Up – Again, Oil Futures Decline

Daily Analysis - 31/03/2016

Crude Oil Inventories Rose 2.29 Million Barrels


Crude oil futures continued their steady declines as the weekly crude oil inventories reported for the week ending March 25th showed an increase of 2.29 million barrels in commercial stockpiles in the US. The growth was less than the expected 3.1 million barrels, but still signaling that supply continues to outpace demand. A separate survey showed that global oil production in March increased by 100,000 barrels per day to 32.47 million barrels.

ADP Reports 200k Jobs Added in March

Private sector hiring in the US continued to show solid gains in March suggesting that the momentum in the US labor markets was robust despite economic headwinds. According to data released by the ADP yesterday, payrolls in the country increased by 200k in the month of March beating market forecasts of 195,000. February's print was revised down to 205k from the initially reported 214k. The March private payrolls remained consistent with the average monthly job growth over the past years. While services contributed the most to the monthly report, the manufacturing sector added only 3,000 jobs, following a sector-wide layoff of nearly 9,000 jobs in the previous month. Gold prices retreated yesterday erasing the gains from the previous day after Janet Yellen’s dovish remarks sent the Dollar weaker.


Japan Industrial Production Falls at Fastest Pace Since 2011

Japan's industrial production fell at the sharpest pace in February on weaker shipments abroad and the Yen’s exchange rate appreciation. Falling at the fastest pace since 2011, Japan's industrial production fell 6.20% in February on a month over month basis, reversing the 3.70% increase seen in January. On a year over year basis, industrial production is down 1.50%, down further than forecasted, but better than January's decline of 3.80%. Transport equipment followed by electronic parts was the biggest drag on industrial production during the month reported.


Germany CPI Rises 0.80% in March

Consumer prices in Germany picked up pace, rising 0.80% in March, more than the forecasted 0.60% increase and up from February's 0.40% on a month over month basis. On a year over year basis, Germany consumer inflation increased 0.30% beating forecasts of an increase of 0.10%. The uptick in inflation puts the German CPI closer to the 0.50% estimates on a year over year basis for 2016 and is seen as encouraging for the ECB. Earlier in the day, ECB's executive board member Benoit Coeure said that the central bank won't take rates into extremely negative territory. His comments mirrors those of ECB's Makuch who said on Tuesday that the ECB could ease monetary policy further but that interest rate cuts as a policy tool was reaching its limits.


UK Q4 Current Account Deficit Expected to Widen

UK's current account deficit will be released by the ONS later today at 08:30 GMT. Analysts expect the country's current account deficit widening to 21 billion GBP in the fourth quarter of 2015 from 17.5 billion GBP previously. The trade balance data has come under scrutiny in light of the Brexit debate as UK continues to rely heavily on foreign investment to fund its current account deficit which incidentally is one of the biggest among the developed economies, close to 4.0% of its national output. The Bank of England, in a recently released report, noted that foreign investors could be nervous about investing further in the country should Britain vote to leave the EU. UK's final revised GDP for the fourth quarter will also be released but is expected to remain unchanged at 0.50%.


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