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Japanese Companies closer to higher profits; Due to Surging metal prices

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 Top 5 Important in Today’s Market:

 

  • Wall Street volatility index at 23-year low
  • Global stocks higher as traders look for next catalyst
  • Dollar powers ahead on June rate hike bets
  • Oil extends rebound as OPEC hints at supply cuts beyond 2017
  • Bitcoin tops $1,700 for first time

 

For more info on these 5 visit: www.investing.com

Main Economic Events today:

  • Australia Retail Sales MoM fell to actual -0.1% while predicted was 0.3%
  • United States JOLTs Job Openings rose to 5.743M, while expected was 5.655M

 

Mitsubishi & Mitsui

Heightened by elevating Iron one price, as well as the Coal prices, Japanese biggest trading houses (compared by assets) came back to profitability. In this financial year, at the end of March.

Many years Japanese top five trading houses were trying to change their businesses. In order to try diversifying their work into non-cyclical. But after long period of time they have confirmed and underlined the vulnerability and sensitiveness of their businesses. Because they still operate in ”the world of commodities”.

Regarding Today’s reports, Mitsubishi gave data about its profits. Which was 440 billion yen ($3.88 billion) in the last financial year. Rather than loss of circa 150 billion yen from previous year. While the second biggest trading house Mitsui reported a 306 billion yen profit. Which is up from an 83 billion yen loss, from year earlier.

 

Other Corps of the Japanese Big 5 family:

 

Today also, Sumitomo Corporation reported profit for the financial year went up for more than double. Taking off to over 170 billion yen. While Marubeni said their profit gain was a 150 percent, to 155 billion yen.

Itochu Corp, the least dependent among the big five trading houses on resources, last week reported record profit, partly driven by the rise in prices.

Their forecasts, for all the 5, are strongly positive for the following financial year. They also expect them to improve. Despite some prices decline trends in forthcoming weeks.

Japanese traders think that the China’s refreshed appetite for raw materials, would desirably lead to higher commodity prices. These opinion is also respected amongst the most global miners.

Regarding the year before, the top 5 trading houses gained up a total of about 1 trillion yen ($8.9 billion). These were in write-offs due to a slump in valuations. Mitsubishi and Mitsui were then announcing their first annual losses since they were founded. And they were founded after World War Two. Which represents them as very serious operating businesses.

 

Global trends

Observing the global trends anyway, commodity prices are very volatile.

The price of coking coal went up for more than three times. In period between March and late November 2016. Afterwards which it halved through March 2017. In the period of previous 2 months, iron ore prices have also came off roughly.

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Futures overview on May the 8th: Copper drops to 5-month low

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Today’s market had some very stressful outcomes. Volatility was huge, and main base metals and commodities prices were changing their movements unexpectedly, in a way that predictions were mostly positive.

 

Copper

Comex copper prices started trading in the new week at the lowest price since December. Among signs of weak global demand, focusing particularly on Asia. 
Speaking about copper for July delivery on the Comex division of the New York Mercantile Exchange fell 4.25 cents. Which is same as 1.7% to $2.4770 per lb. Earlier, the contract touched $2.4760 per lb. And it was the lowest since December 27.

Gold

Tracking precious metals, especially gold, Comex gold for June settlement was gaining $2.90 or 0.2% to $1,229.80 per oz.
Over the weekend, Chinese imports of unwrought copper and copper-fabricated products fell 4.4% year-on-year in April. Following, total imports for the first four months of 2017 were down 22.9% compared to the same period of last year. Generally, total imports in the first four months of 2017 of 1.88 million tonnes were down 22.9% year-on-year.

Chinese import demand, which was pretty weak, coupled. With mounting inventory stocks demonstrate soft global demand nevertheless the market moving into the summer months where consumption peaks.

“While we remain constructive on copper over the very short term, our final affinity has seriously been tempered by 1) the deterioration in the technical picture. 2) the negative micro dynamics. And 3) the continued poor investor conviction in the base metals complex,” (Metal Bulletin)

European market

In Europe, the election of Emmanuel Macron as the French president should lead to the stabilisation of the political scene. Malcolm Freeman, Kingdom Futures, noted:

“The new French president Macron will slightly calm European nerves. And unlike the USA and President Trump it looks it will be a case of no real change. Also the risk of the breakup of the EU has taken a step back which will meaningly calm investor’s nerves.”

Members of the metals industry gathered for LME Asia Week in Hong Kong this week, key topics was about launched discussion paper and finding a balance between traditional and new LME users.

Currencies & data


Firstly, The dollar index was up 0.39 to 98.96. Secondly, in data, US unemployment claims for April came in at 238,000. It is the amount below the forecast of 246,000. Thirdly, preliminary non-farm productivity and unit labour costs during the first quarter came in at -0.6% and 3%, respectively.
Following, EU Sentix investor confidence took a value at 27.4 for May. Which is up from 23.9 in the previous period.
Today is the day when UK Halifax house price index and BRC retail sales data will come out. US labour market conditions are also specific.

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Oil prices VOLATILE; firstly UP on positive expectations, then falling DOWN after overnight gains

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Top 5 things about Monday’s Market:

  • Macron cruises to victory in France
  • Euro SLIPS as Macron relief rally loses steam
  • Global stocks mixed; Europe trades lower after French election
  • Oil gives up strong overnight gains
  • China’s april exports, imports rise less than expected

More info on these 5 from: www.investing.com

Prices; Monday Overnight Gains

Saudi Arabia’s energy minister stated that OPEC is seriously discussing the idea to prolong output cuts. The extension of oil output cuts will happen in June. And it would also likely cover all the year long period of time. It will maybe even enter the 2018. Despite U.S. production and drilling which is constantly increasing their margins and profits, the oil sector is limited. And the U.S. drilling can’t be permanent.

Brent crude futures were at $49.48 per barrel at 0652 GMT (2.52 a.m. ET). That is up for 38 cents, or 0.75 percent, from their last close.

U.S. West Texas Intermediate futures were at $46.52 per barrel. Which is up 30 cents, or 0.7 percent from their previous price.

Energy Minister of Saudi Arabia Speaking

Today, Khalid-Al-Falih, Saudi’s energy minister explained that oil market is now rebalancing. After long years of oversupply and overstressed ambient on this market. He said they are still expecting OPEC’s decision to bring the bright trends for future oil prices.

“Based on the consultations I have had with participating members, I am rather confident the agreement will be extended into the second half of the year and possibly beyond.” (Reuters)

His speech was held during an industry event in Kuala Lumpur. In Malaysia’s capital, on Monday.

 

Exports:

The Organization of the Petroleum Exporting Countries  along with other producers, together with Russia, agreed to cut output by almost 1.8 million barrels per day (bpd) during the first half of the year. In ordet to prop up the stressed market. Saudi Arabia is de-facto leader of all the producing countries. With the biggest stake with its individual oil outputs.

 

The positive comments and upward prices came after a long last week’s plummeting trends, which pumped the negative speculations into the Oil market. The countries who are not included in this output cut deals, also contributed to low prices. Including the United States, where output is simply exalted. It has took off in recent period so strongly, that it has a huge impacts on market.

 

Bringing the decision

Next official OPEC’s meeting will be on May the 25th. And finally, decision on whether to continue the cuts will be brought out to light. Officially.

“Oil may have seen the worst of the selloff for now, as the market turns its attention to the OPEC meeting at the end of the month.” said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore. ( Reuters)

French Election Impact on Oil Prices

Some of the market participants say that the victory of Emmanuel Macron in the French presidential election against far-right Marine Le Pen also supported oil prices. Bringing the hopes of more stable European economy, which automatically added to positive speculations. And implemented great hopes into the markets.

Still, both Brent and WTI crude are holding below $50 for now.

U.S. drilling continued to pick up last week, with the rig count climbing by 6 to 703.

Since a low point in May 2016, U.S. producers have added 387 oil rigs, or about 123 percent, Goldman Sachs said. (Reuters)

 

Change of trends:

Finishing with info that Oil price again edged lower, erasing strong overnight gains !! U.S. crude was at $46,17 a barrel, down 5 cents, or around 0.1% . While Brent Shed 6 cents to $49.04!

Doing businesses in the markets these days (the upcoming week) would certainly be very challenging for all the race participants. Rather than last week, which was filled out with suspicions on whether the oil prices will go a bit higher & what would happen in European market.

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