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Lots of data but none the wiser

Published Thursday, November 26th, 2015

Thanksgiving is upon us and it was preceded yesterday by a big US data day. Not big as in very important releases such as non-farm payrolls, but big in terms of volume. There were numbers on durable goods, personal income, new homes, consumer sentiment and jobless claims. As always they were mixed but tending to mildly positive, certainly nothing to spoil today’s turkey or the Fed’s journey towards an interest rate rise.

Nevertheless the US sky is not cloudless. Plugging the latest numbers into their GDP growth model the Atlanta Fed comes up with only 1.8% 4Q GDP growth compared to its previous forecast of 2.3%. The drag came from anaemic consumer spending at only +0.1% compared to +3% in 3Q. Now it is all eyes on Black Friday. Will retail records be broken or disappoint? This and the non-farm payroll data due on Friday December 4 will be important influences on Fed thinking.

US share indices closed marginally higher. European indices recovered some of Tuesday’s losses rallying 1.4% as it became clear that following the downing of a Russian jet by Turkey the mood was to deescalate rather than escalate the crisis, even though the Russians are determined to make the Turks pay economically. Russia also moved on Ukraine cutting off all gas supplies in response to power blackouts in Crimea which Russia believes the Ukrainian government supports.

to read the rest of the report, please click here

Posted by David Hufton