Natural Gas Forecast January 8, 2013, Technical Analysis

The natural gas markets had a positive session during the Monday trading hours, but it must be said that most of those gains were given up and the daily candle formed a shooting star. This signals that we could very well see a continuation of the downtrend that has been so prevalent in this marketplace over the last several months.

The longer-term downtrend is still very much in effect, and as a result we are willing to start selling rallies and show signs of weakness. In fact, a break of the candle from the Monday session to the downside would have us selling Erie it also, we would sell another attempt at the $3.50 level as it should be far too resistive for the buyers to break out of.

 

Natural Gas Forecast January 8, 2013, Technical Analysis
Natural Gas Forecast January 8, 2013, Technical Analysis

Natural Gas Fundamental Analysis January 8, 2013 Forecast

Natural Gas Fundamental Analysis January 8, 2013 Forecast
Natural Gas Fundamental Analysis January 8, 2013 Forecast

Analysis and Recommendations:

Natural Gas bounced to 3.337 as traders took advantage of the low prices and the weak dollar to grab up the cheap commodity. Weather patterns still call for warm weather but a drop in inventory last week is helping to support prices.

Natural gas is still expected to continue its decline as we move through the winter with spring counting down. Weather forecasters predicted that a cold blast last week will be followed by a warming trend in the central and eastern states over the next two weeks. 2012 is likely to overtake 1998 as the warmest on record in the US, according to the National Oceanic and Atmospheric Administration.

Natural gas for February delivery dropped 7.4 cents, sinking to $3.39 per million British thermal units on the New York Mercantile Exchange on Monday.

US gas inventories totaled 3.652 trillion cubic feet (Tcf) in the week ended December 21 — 12.8 percent above the five-year average for the period, according to the US Department of Energy.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data January 7, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jan. 07

 

GBP

 

 

Halifax House Price Index

1.3%

 

0.1% 

 

1.6% 

   

 

 

NOK

 

 

Norwegian Unemployment Rate 

3.20%

 

3.00% 

 

3.10% 

   

 

WEEKLY

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event

Forecast

Previous

 Jan. 08

10:00

EUR

Retail Sales (MoM) 

0.3%

-1.2%

 

11:00

EUR

German Factory Orders (MoM) 

-1.4%

3.9%

Jan. 09 

09:30

GBP

Trade Balance 

-9.1B

-9.5B

 

11:00

EUR

German Industrial Production (MoM) 

1.0%

-2.6%

Jan. 10

07:45

EUR

French CPI (MoM) 

 

-0.2%

 

12:00

GBP

Interest Rate Decision 

 

0.50%

 

12:00

GBP

BOE QE Total 

 

375B

 

12:45

EUR

Interest Rate Decision 

0.75%

0.75%

Jan. 11

01:30

CNY

Chinese CPI (YoY) 

 

2.0%

 

01:30

CNY

Chinese PPI (YoY) 

 

-2.2%

 

01:30

CNY

Chinese CPI (MoM) 

 

0.1%

 

08:15

CHF

CPI (MoM) 

0.1%

-0.3%

 

09:30

GBP

Industrial Production (MoM) 

0.8%

-0.8%

 

09:30

GBP

Manufacturing Production (MoM) 

0.5%

-1.3%

 

09:30

GBP

Industrial Production (YoY) 

-1.9%

-3.0%

Upcoming Government Bond

Date Time Country 

Jan 08 01:30 Japan 

Jan 08 09:30 Holland 

Jan 08 10:10 Greece 

Jan 08 10:15 Austria 

Jan 08 10:30 Belgium 

Jan 08 10:30 UK 

Jan 08 11:00 ESM 

Jan 08 15:30 UK 

Jan 08 16:30 Italy  

Jan 08 18:00 US 

Jan 09 10:10 Sweden 

Jan 09 10:30 Germany 

Jan 09 10:30 Swiss 

Jan 09 18:00 US 

Jan 10 01:30 Japan 

Jan 10 09:30 Spain 

Jan 10 10:10 Italy  

Jan 10 18:00 US 

Jan 11 10:10 Italy  

Jan 11 11:30 Belgium 

Jan 13 12:00 Norway 

Oil Flat in Early Trading

Oil Flat in Early Trading
Oil Flat in Early Trading

In early trading on Monday oil is flat near $93.00, drifting between small gains and losses The market is trading calm from its previous week’s gigantic move as crude oil prices increased around 2.5 percent in the last week on the back of sharp decline in US crude oil inventories. Additionally, favorable data like manufacturing and non – manufacturing activity coupled with more than forecasted change in non-farm employment led to expectations of rise in demand for the fuel.

Sharp upside moves in the prices was capped as a result of strength in the DX. Crude oil prices touched a weekly high of $93.87 and closed at $93.09 in the last trading session of the week.

The US Energy Department (EIA) report on Friday that, US crude oil inventories declined more than expected by 11.1 million barrels to 359.90 million barrels for the week ending on 28th December 2012.

Crude oil futures closed slightly higher on Friday, finding support from a hefty drop in last week’s US crude supplies, but was pressured by a stronger dollar, as traders weighed concern over a potential end to the Federal Reserve’s monetary stimulus this year. The dollar index, which measures greenback’s performance against a basket of six currencies, turned down to 80.44 before the nonfarm payroll report.  The US rose after the report showed the US economy continued to add jobs in December.

Last week markets were more focused on the US fiscal cliff negotiations ahead of the deadline and then the dramatic deal and vote and signing of the agreement. After elation wore off on Thursday, traders realized that the deal was more of a delaying tactic, pushing off the debt ceiling and spending and budget cuts until March 2013. By late Friday, traders had more or less moved past the US fiscal cliff deal as market uncertainty would continue, but the US avoided recession and traders will now focus on fundamental data. The US dollar has now climbed for its fourth consecutive session.

Today natural gas prices are trading marginally higher at 3.312. Markets are seeing slight recovery is gas prices however, there does not seem to be any indication of any major reversal in prices. There could be slight recovery in prices. However, the trend continues to stay bearish. The technical charts are also suggesting gas prices to remain bearish in the near term. The US Energy Information Administration (EIA) released its weekly inventories on Friday delayed due to the holidays showing that US natural gas inventory declined more than expected by 135 billion cubic feet (bcf) which stood at 3.517 trillion cubic feet for the week ending on 28th December 2012

Natural Gas Weekly Fundamental Analysis, January 7-11, 2012, Forecast

Introduction: Natural gas is nevertheless a major commodity in its own right, which is used for everything from cooking food to heating houses during the winter. Natural Gas is growing much faster than either of its non-renewable fossil fuel competitors, oil and coal.

Do not miss the weekly U.S. gas inventories report. The figures are issued by the Energy Information Administration (EIA) every Thursday afternoon at 15:30 (released Friday at 15:30 if there was a U.S. bank holiday on Monday). Here’s a link to the latest EIA report. The main natural gas moving figure in there is the change in inventories from the previous week. When it comes to the gas inventories report, we’re talking about billions of cubic feet, Bcf for short.

When the actual change in inventories number is released, it is the deviation from the expected number that is really important. If the actual inventories figure shows a 24 Bcf rise when an 84 Bcf increase was expected, then that is actually positive for the price of natural gas. All else equal, the price of natural gas should rise after the release.

A barrel of oil has roughly 6 times the energy content of natural gas. If the fuels were perfect substitutes, oil prices would tend to be about 6 times natural gas prices. However, due to various market characteristics discussed briefly above and the ease of using oil, the price of oil has been following a pattern of 8-12 times that of natural gas. However that ratio has spiked dramatically since March 2009.

Weekly Analysis and Recommendation:

Natural Gas climbed a bit to close the week at 3.289 as traders took advantage of the weak prices. As gas fell to trade at 3.199 traders grabbed up the asset. Gas fell as much as 9 percent, the biggest intraday drop in more than three years; after Commodity Weather Group LLC said cold weather in most of the U.S. this week would give way to above-normal temperatures from Jan. 7 through Jan. 11. The low in New York on Jan. 10 may be 37 degrees Fahrenheit (3 Celsius), 10 higher than usual, AccuWeather Inc. said.

Date

Last

Open

High

Low

Change %

Jan 04, 2013

3.289

3.199

3.299

3.193

2.88%

Jan 03, 2013

3.197

3.232

3.236

3.166

-1.07%

Jan 02, 2013

3.232

3.353

3.354

3.066

-3.64%

Jan 01, 2013

3.354

3.349

3.358

3.349

-0.42%

Dec 31, 2012

3.368

3.464

3.481

3.342

-2.76%

U.S. gas inventories totaled 3.652 trillion cubic feet in the week ended Dec. 21, a record for this time of the year, a department report last week showed. Supplies were 12.8 percent above the five-year average, up from 4.6 percent at the end of November. The surplus had climbed to 61 percent at the end of March. Stockpiles reached an all-time high of 3.929 trillion cubic feet during the week ended Nov. 2.

The U.S. raised its forecast for natural gas output in 2012 by 0.6 percent in a report Dec. 11.

Marketed gas production averaged 69.22 billion cubic feet a day, up from 68.84 billion estimated in November, the Energy Department said in its monthly Short-Term Energy Outlook. Output may increase 0.5 percent in 2013 to 69.59 billion a day, department estimates showed.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Historical: From 2010 to Present

Highest: 6.106 on Jan 07, 2010

Average: 3.836 over this period

Lowest: 1.903 on April 19, 2012

 

Economic Events: (GMT)

WEEKLY

 

Natural Gas Monthly Fundamental Forecast January 2013

Outlook and Recommendation

Natural Gas tumbled as the year ended to trade at 3.390, after touching as low as 3.265. Traders abandoned the commodity as warmer weather continued in the US with a drop in residential demand. Major commodities traded mostly up on the last business day of the year: the price of Brent oil and WTI oil changed direction and rallied; the prices of gold and silver also shifted gear and rose on Monday; natural gas Henry Hub future (short term delivery), on the other hand, changed direction and fell yesterday; the Euro slipped against the USD on Monday. All this on works of US politicians and President Obama promised a deal, while Harry Reid said no deal was in the making but at the last moments on Monday a deal was ready to be done. Commodities and currencies were all over the place. As markets closed on Monday for the holiday there was one last hurrah. Natural gas had been on the decline since the delays inventory report released on Friday disappointed traders.

Highest: 3.745

Lowest: 3.263

Difference: 0.483

Average: 3.447

Change %: -5.28

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Natural Gas Inventory (EIA)

Working gas in storage was 3,517 Bcf as of Friday, December 28, 2012, according to EIA estimates. This represents a net decline of 135 Bcf from the previous week. Stocks were 23 Bcf higher than last year at this time and 389 Bcf above the 5-year average of 3,128 Bcf. In the East Region, stocks were 122 Bcf above the 5-year average following net withdrawals of 84 Bcf. Stocks in the Producing Region were 186 Bcf above the 5-year average of 1,027 Bcf after a net withdrawal of 36 Bcf. Stocks in the West Region were 81 Bcf above the 5-year average after a net drawdown of 15 Bcf. At 3,517 Bcf, total working gas is above the 5-year historical range.

WEEKLY DATA

Natural Gas forecast for the week of January 7, 2013, Technical Analysis

The natural gas markets fell during the week as we tested the $3.00 level. However, we get a significant bounce from that area and manage to form a massive hammer by the end of the week. This of course shows quite a bit of strength down near that area, and as a result it will be very interesting to watch this contract going forward.

We are still very bearish of this market even though Friday had a reasonably sizable draw down of natural gas inventories in the United States. The truth is that we have warmer temperatures coming in the near-term future, and as a result they should curb demand for natural gas.

We have this chart, we do recognize the fact that a move above the $3.50 level would in fact signal a buy trade, and as a result could see a move up to the $4.00 handle. With that in mind, we don’t see breaking above the $4.00 level anytime soon, and would look at a move like that as an invitation to start selling at the first sign of weakness.

When you keep in mind that the supply of natural gas is so significant in the United States that they literally burned off more natural gas at oil sites because they don’t have anything else to do with it than is actually consumed in that country. When you literally have so much of it that you are destroying it because you do not have anything to do with it, you have by all stretch of imagination a massive glut

Going forward, we would expect this market to have its undulations, but we definitely think that the downward trajectory should continue to pay dividends. Obviously, if we managed to break the bottom of the hammer from this past week we could really see the trap door open underneath the market. However, we recognize the fact that this is a supportive candle, so a bounce could come. We are not interested in buying and will only fade that rally once it shows some signs of weakness.

 

Natural Gas forecast for the week of January 7, 2013, Technical Analysis
Natural Gas forecast for the week of January 7, 2013, Technical Analysis

Natural Gas Forecast January 7, 2013, Technical Analysis

The natural gas markets rose during the Friday session after it was reported that a larger than expected draw down in the natural gas reserves happened during the last month in the United States. However, warmer temperatures are expected over the next few weeks, so this could put a damper on any type of bullish move that we see at this point. In fact, we see the $3.50 level as being overly resistive and it should put quite a bit of selling pressure on the market. Alternately, if we managed to break down below the $3.00 level, we think that the floor in this market will completely collapse and send prices much lower. As far as buying is concerned, we have no interest in doing so at the moment.

 

Natural Gas Forecast January 7, 2013, Technical Analysis
Natural Gas Forecast January 7, 2013, Technical Analysis

Natural Gas Fundamental Analysis January 7, 2013, Forecast

Natural Gas Fundamental Analysis January 7, 2013, Forecast
Natural Gas Fundamental Analysis January 7, 2013, Forecast
Analysis and Recommendations:

Natural Gas continues to do the opposite of the markets, gaining today, to trade at 3.252 adding 0.053 as traders took advantage of low prices to grab up the commodity. Yesterday, gas fell as much as 9 percent, the biggest intraday drop in more than three years, after Commodity Weather Group LLC said cold weather in most of the U.S. this week would give way to above-normal temperatures from Jan. 7 through Jan. 11. The low in New York on Jan. 10 may be 37 degrees Fahrenheit (3 Celsius), 10 higher than usual, AccuWeather Inc. said.

Futures have plummeted 18 percent since rising to a one- year intraday high of $3.933 on Nov. 23 on below-average weekly stockpile declines caused by mild weather.

U.S. gas inventories totaled 3.652 trillion cubic feet in the week ended Dec. 21, a record for this time of the year, a department report last week showed. Supplies were 12.8 percent above the five-year average, up from 4.6 percent at the end of November. The surplus had climbed to 61 percent at the end of March. Stockpiles reached an all-time high of 3.929 trillion cubic feet during the week ended Nov. 2.

The U.S. raised its forecast for natural gas output in 2012 by 0.6 percent in a report Dec. 11.

Marketed gas production averaged 69.22 billion cubic feet a day, up from 68.84 billion estimated in November, the Energy Department said in its monthly Short-Term Energy Outlook. Output may increase 0.5 percent in 2013 to 69.59 billion a day, department estimates show.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data January 4, 2012 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jan. 04

 

DKK

 

 

Danish Unemployment Rate 

4.80%

 

4.90% 

 

4.80% 

 

 

 

 

HUF

 

 

Hungarian Unemployment Rate 

10.6%

 

10.6% 

 

10.5% 

 

 

 

 

GBP

 

 

Services PMI 

48.9

 

50.4 

 

50.2 

 

 

 

 

EUR

 

 

CPI (YoY) 

2.2%

 

2.1% 

 

2.2% 

 

 

 

 

BRL

 

 

Brazilian Industrial Production

-1.0%

 

-0.8% 

 

2.5% 

   

 

 

USD

 

 

Average Hourly Earnings (MoM) 

0.3%

 

0.2% 

 

0.3% 

   

 

 

CAD

 

 

Employment Change 

39.8K

 

5.0K 

 

59.3K 

 

 

 

 

USD

 

 

Nonfarm Payrolls 

155K

 

150K 

 

161K 

   

 

 

USD

 

 

Unemployment Rate 

7.8%

 

7.7% 

 

7.8% 

   

 

 

CAD

 

 

Unemployment Rate 

7.1%

 

7.0% 

 

7.2% 

 

 

 

 

USD

 

 

Average Weekly Hours 

34.5

 

34.4 

 

34.4 

 

 

 

 

USD

 

 

Private Nonfarm Payrolls 

168K

 

148K 

 

171K 

   

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event

Forecast

Previous

 Jan. 07

07:00

EUR

Finnish Trade Balance 

 

-0.23B 

 

08:00

EUR

Czech Construction Output (YoY) 

 

-4.30% 

 

09:30

EUR

Sentix Investor Confidence 

-13.8 

-16.8 

 

10:00

EUR

PPI (MoM) 

0.1% 

0.1% 

 

15:00

USD

CB Employment Trends Index 

 

107.80 

 

 

 

 

 

 

                     

Upcoming Government Bond

Date Time Country 

Tuesday, January 10: Austria will auction €1.3 billion ($1.7 billion) in 5- and 10-year bonds

Thursday, January 12: Spanish 3- and 5-year bond auction

Friday, January 13: Italy will auction medium-long term bonds

Thursday, January 19: France will auction 5-year bonds

Thursday, January 19: Spanish 10-, 15-, and 30-year bond auction

Thursday, January 26: Italian long-term bond auction

Monday, January 30: Italian medium-long term bond auction

Monday, January 30: Belgian bond auction

WEEKLY

 

Strong US dollar Weighs on Crude Oil

Strong US dollar Weighs on Crude Oil
Strong US dollar Weighs on Crude Oil

Ahead of a delayed weekly EIA inventory, crude oilis traded at 92.25 down 68cents. Oil futures were trading marginally lower. Crude oil prices had already factored in the optimism on US deal for averting fiscal cliff and were due for a correction. Weak construction spending data for November in the US provided the trigger for correction in energy contract Wednesday. Traders worries about growing uncertainties over the US debt ceiling and the delayed budget and spending cuts have seen traders returning to the safety of the US dollar and US Treasuries. The higher US dollar weighs on the value of crude oil. Today’s inventory and the much watched US Nonfarm payroll data will give traders something to look forward to.

Crude oil prices declined the first time in 3-days, on speculation that this week’s gains were unjustified, as the US budget deal is insufficient to ensure growth in the world’s biggest oil consuming country. Inventory estimates project that Crude oil to decline by 0.5mn barrels. U.S. crude oil inventories fell sharply last week and imports tumbled, data from the American Petroleum Institute showed on Thursday, as Gulf Coast refiners drew down stocks for end of the year tax purposes.

The strength of the US dollar will continue to weigh on energy prices as the dollar rises on economic uncertainties in the US as well as the latest FOMC minutes which show that the Fed’s might well limit or curtail their monetary easing policies.

Other data effecting markets yesterday, showed that Gasoil stocks independently held at the Amsterdam-Rotterdam-Antwerp hub gained 5.8 percent week-on-week, data from Dutch oil analyst Pieter Kulsen showed, but conditions are in place which could push levels lower in coming weeks.

Japanese power demand rose 0.8 percent in December from a year earlier, marking the second straight year-on-year gain, as colder-than-normal weather pushed up heating demand, a Reuters calculation based on industry data showed on Friday.

Ivory Coast hopes to raise its oil output to around 200,000 barrels per day in five years from 32,000 bpd now thanks to recent discoveries and ongoing exploratory drilling, a top oil official said.

Output fell 4 percent to 2.5 million barrels of crude and natural gas equivalent per day from 2.61 million boepd in November 2011, the ANP said.

Natural gas prices declined to a 3-month low on NYMEX, after forecasts of milder weather that would cut demand for the heating fuel. Natural gas inventories are expected to decline by 120-130bn cubic feet, actual data will be released by EIA later in the day. NG is currently trading at 3.212 adding 0.018 as traders grabbed up bargains.

Natural Gas Forecast January 4, 2013, Technical Analysis

The natural gas markets fell slightly during the Thursday session as the bearish trend continues. We have recently broken down below an up trending line that formed the bottom of a bearish flag, and as a result we find this market to be a “sell only” market at the moment. Also, it should be noted that temperatures are supposed to rise over the next several sessions in the northeastern part of United States, so this of course will weigh upon any bullishness that would be out there for natural gas. With all this being said, we are sellers, and will continue to be so until we fill the gap at $3.00.

 

Natural Gas Forecast January 4, 2013, Technical Analysis
Natural Gas Forecast January 4, 2013, Technical Analysis

Natural Gas Fundamental Analysis January 4, 2013, Forecast

Natural Gas Fundamental Analysis January 4, 2013, Forecast
Natural Gas Fundamental Analysis January 4, 2013, Forecast
Analysis and Recommendations:

Natural Gas continued to hit bottom, with the US dollar climbing the commodity lost its appeal. US weather forecast has turned to the warmer side leaving little excess demand for the energy source. Traders are expecting this week’s inventory to show a larger build pushing natural gas back to the basement prices we saw just a few months ago.

Gas fell as forecasters predicted that a cold blast this week will be followed by a warming trend in the central and eastern states over the next two weeks. 2012 is likely to overtake 1998 as the warmest on record in the US, according to the National Oceanic and Atmospheric Administration.

US gas inventories totaled 3.652 trillion cubic feet  in the week ended December 21 — 12.8 percent above the five-year average for the period, according to the US Department of Energy.

Iranian Oil Minister Rostam Qassemi declared that his ministry will begin striking gas deals with “different countries,” adding that Iran’s gas output will increase to 1.4 billion cubic meters  in the next three years, according to Fars News Agency.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data January 3, 2012 actual v. forecast

Date

Time

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jan. 03

07:00

 

GBP

 

 

Nationwide HPI (MoM) 

-0.1%

 

0.1% 

 

0.0% 

 

 

 

08:00

 

CHF

 

 

KOF Leading Indicators 

1.28

 

1.35 

 

1.50 

 

 

 

08:00

 

TRY

 

 

Turkish CPI (MoM) 

0.38%

 

0.38% 

 

0.38% 

 

 

 

08:00

 

EUR

 

 

Spanish Unemployment

-59.10K

 

50.30K 

 

74.30K 

 

 

 

08:30

 

CHF

 

 

SVME PMI 

49.5

 

48.5 

 

48.5 

 

 

 

08:55

 

EUR

 

 

German Unemployment Rate 

6.9%

 

6.9% 

 

6.9% 

 

 

 

08:55

 

EUR

 

 

German Unemployment

3K

 

10K 

 

5K 

 

 

 

13:15

 

USD

 

 

ADP Nonfarm Employment

215K

 

133K 

 

148K 

   

 

13:30

 

USD

 

 

Initial Jobless Claims 

372K

 

355K 

 

362K 

   

 

13:30

 

USD

 

 

Continuing Jobless Claims 

3245K

 

3215K 

 

3201K 

   

 

WEEKLY

Upcoming Economic Events that affect the CHF, EUR, GBP, CAD and USD

Date

Time

Currency

Event

Forecast

Previous

 Jan. 04

09:30

GBP

Services PMI 

50.4 

50.2 

 

10:00

EUR

CPI (YoY) 

2.1% 

2.2% 

 

13:30

USD

Average Hourly Earnings (MoM) 

0.2% 

0.2% 

 

13:30

USD

Nonfarm Payrolls 

150K 

146K 

 

13:30

CAD

Employment Change 

5.0K 

59.3K 

 

13:30

USD

Private Nonfarm Payrolls 

148K 

147K 

 

15:00

USD

ISM Non-Manufacturing Index 

54.2 

54.7 

Upcoming Government Bond

Date Time Country 

Thursday, January 5: France will auction an estimated €7-8 billion ($9.1-10.4 billion) in 10-year and other long-term bonds 

Tuesday, January 10: Austria will auction €1.3 billion ($1.7 billion) in 5- and 10-year bonds

Thursday, January 12: Spanish 3- and 5-year bond auction

Friday, January 13: Italy will auction medium-long term bonds

Thursday, January 19: France will auction 5-year bonds

Natural Gas Forecast January 3, 2013, Technical Analysis

The natural gas markets had a rough session on Wednesday as the selloff continues. In fact, we have broken down below the up trending line of what we considered to be a potential bearish flag and now see a path opened to the $3.00 level. We are short of this market now, and will continue to be until we hit and least that level. In fact, we are hoping to see a breakdown of $3.00 in order to not only stay short of this market, but to continue to add contracts as well.

 

Natural Gas Forecast January 3, 2013, Technical Analysis
Natural Gas Forecast January 3, 2013, Technical Analysis

Natural Gas Fundamental Analysis January 3, 2013 Forecast

Natural Gas Fundamental Analysis January 3, 2013 Forecast
Natural Gas Fundamental Analysis January 3, 2013 Forecast

Analysis and Recommendations:

Natural Gas was about the only commodity to trade on a negative bias today, as the bulls ran to risk assets leaving natural gas dying. NG tumbled some 12.7cents today to trade at 3.224 as weather patterns changes to show no other winter storms coming and temperatures rising. Weather forecast for the next two week was not supportive of natural gas as residential use should decline. Natural gas inventories remain high and traders are expecting to see a climb in inventory this week. With winter days dwindling quickly seasonal demand for gas remains low.

Even the weak dollar could not make gas attractive to investors today.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data January 2, 2013 actual v. forecast

Date

 

Currency

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jan. 02

 

EUR

 

 

Italian Manufacturing PMI 

46.70

 

45.40 

 

45.10 

 

 

 

 

EUR

 

 

French Manufacturing PMI 

44.6

 

44.6 

 

44.6 

 

 

 

 

EUR

 

 

German Manufacturing PMI 

46.0

 

46.3 

 

46.3 

 

 

 

 

EUR

 

 

Manufacturing PMI 

46.1

 

46.3 

 

46.3 

 

 

 

 

GBP

 

 

Manufacturing PMI 

51.4

 

49.2 

 

49.2 

   

 

 

EUR

 

 

German CPI (MoM) 

0.9 

 

0.7% 

 

-0.1% 

 

 

 

 

EUR

 

 

German CPI (YoY) 

2.1 

 

1.9% 

 

1.9% 

 

 

 

 

USD

 

 

ISM Manufacturing Index 

na 

 

50.3 

 

49.5 

 

 

 

WEEKLY

 

Upcoming Economic Events that affect the CHF, EUR, GBP, CAD and USD

Date

Time

Currency

Event

Forecast

Previous

Jan. 03

07:00

GBP

Nationwide HPI (MoM) 

0.1% 

0.0% 

 

08:00

CHF

KOF Leading Indicators 

1.35 

1.50 

 

08:00

EUR

Spanish Unemployment Change 

50.30K 

74.30K 

 

08:30

CHF

SVME PMI 

48.5 

48.5 

 

08:55

EUR

German Unemployment Change 

10K 

5K 

 

13:15

USD

ADP Nonfarm Employment Change 

133K 

118K 

 

13:30

USD

Initial Jobless Claims 

355K 

350K 

 

13:30

USD

Continuing Jobless Claims 

 

3206K

Upcoming Government Bond

Date Time Country 

Thursday, January 5: France will auction an estimated €7-8 billion ($9.1-10.4 billion) in 10-year and other long-term bonds 

Tuesday, January 10: Austria will auction €1.3 billion ($1.7 billion) in 5- and 10-year bonds

Thursday, January 12: Spanish 3- and 5-year bond auction

Friday, January 13: Italy will auction medium-long term bonds

Thursday, January 19: France will auction 5-year bonds

Thursday, January 19: Spanish 10-, 15-, and 30-year bond auction

Thursday, January 26: Italian long-term bond auction

Monday, January 30: Italian medium-long term bond auction

Monday, January 30: Belgian bond auction

Crude Oil Rebounds as US Dollar Weakens

Crude Oil Rebounds as US Dollar Weakens
Crude Oil Rebounds as US Dollar Weakens

Crude oil prices edged higher closing 2012 up for the fourth straight year after geopolitical threats to production offset worries about flagging oil demand. On Friday a delayed EIA inventory report showed that crude stocks had not decline as much as forecast limiting gains on Monday. This morning with the US fiscal cliff avoided at the last minute crude oil rebounded to climb as high as 92.60 and is trading at 92.53.

Hollywood studios could not have produced such an amazing drama, with everything from market crashes and rises to Presidential intervention, to the on again off again deals, and to the political posturing and rhetoric. It was a TV movie in the marking. But as market analysts had projected weeks ago a watered down version of a shorten bill would be passed. Politicians did what politicians do, they passed the buck or they delayed decisions. Most of the important hard core decisions were pushed off for 60 days, there are no budget cuts and no debt ceiling limits included in the last minute legislation. The government accounting office has projected that this delay will cost the government 44 billion dollars. Money which it does not have.

The budget deal passed just hours ago would raise taxes on 77.1% of U.S. households, mostly because of the expiration of a payroll tax cut, according to preliminary estimates from the nonpartisan Tax Policy Center in Washington. The bill, being discussed by House members today, would raise the top tax rate to 39.6% from 35% last year, starting with income over USD400,000 for individuals and USD450,000 for married couples. The new tax changes are a positive step but nowhere near aggressive enough to raise enough income for the government to reduce its debts. But it does stop the automatic budget and spending cuts and tax hikes that could have pushed America into recession, or at least this is what the politico used to frighten us.

With disaster averted or avoided, markets are able to return to normal. This has allowed commodity and currencies to once again move from risk off to risk on themes. It also allows traders to deal with fundamental, economic and technical data as opposed to political uncertainties.

During the past couple of months, crude oil has slightly increased. Despite the recent rally in oil prices, they are still down for the year by nearly 7%. The Chinese data reported on the positive side, with HSBC PMI data reporting above forecast and showing continued expansion, but still the market attention remained on the US.

Natural gas defied the norm, falling this morning to trade at 3.304 down 0.064 as investors dumped the commodity and moved to other risk assets, as the weather in the US, although severe does not seem to be enough to increase demand sufficiently to use excessive inventories.

Natural Gas Forecast January 2, 2013, Technical Analysis

The natural gas markets fell significantly during the session on Monday as the market still looks fairly week. In fact, we are sitting just on top of the uptrend line that we suggested was part of a bearish flag. Because of this, we think that the next session on Wednesday could very well be the deciding factor if we break down. In that circumstance, we will not hesitate to short this market as it is definitely a negative market overall, and the longer-term trend certainly does suggest that this is unchanging.

Far as buying is concerned, we simply won’t be bothered with it at this point time as the recent selloff has been based upon the fact that there have been warmer temperatures in the United States recently. With all that being said, any rallies that we see would more than likely make great selling opportunities if we get the right weak price action.

 

Natural Gas Forecast January 2, 2013, Technical Analysis
Natural Gas Forecast January 2, 2013, Technical Analysis

Nearby Natural Gas Monthly Analysis for January 2013

The lack of demand due to forecasts of warm weather is pressuring natural gas once again. Traders are shorting the market even near historically low price levels due to an expected rise in supply. 

The only bullish factor I can come up with is that nearby natural gas remains on the bullish side of a major downtrending Gann angle from the July 2008 top at 20.185. This angle comes in at 2.905 during January. 

Monthly Nearby Natural Gas
Monthly Nearby Natural Gas

Based on the short-term range of 2.803 to 4.164, a potential support zone has developed at 3.484 to 3.163. Holding this zone could put the market in a position to form a potentially bullish secondary higher-bottom. 

During January, uptrending support is at 3.523 and 3.163. The close below the first support angle is a sign of weakness. Regaining this angle however could mean that the buying is greater than the selling at current price levels. A failure to hold the second Gann angle at 3.163 could be a sign that the market is headed for a test of the main bottom at 2.803.

Natural Gas Fundamental Analysis January 1, 2013, Forecast

Natural Gas Fundamental Analysis January 1, 2013, Forecast
Natural Gas Fundamental Analysis January 1, 2013, Forecast

Analysis and Recommendations:

Natural Gas sold off today as traders booked profits before year end after gas climbed over the 3.46 price level yesterday as cold weather continued across the US. A freak winter storm moving from the gulf states northward sent temperatures downward. With speculators uneasy over fiscal uncertainties and possible tax changes in 2013, investors moved to the sidelines today. Inventory reports will be delayed a day due to the New Year’s holiday.

Our fundamental analysis will not be published tomorrow, as we celebrated the New Year’s holiday and global markets are shuttered. I would like to take this time to wish all of my readers and followers the best in the New Year… Here’s to profitable trading.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data December 31, 2012 actual v. forecast

Date

Time

 

Currency

 

Importance

 

Event

Actual

 

Forecast

 

Previous

 

 

Dec. 31

00:30

 

AUD

 

 

 

Private Sector Credit (MoM) 

0.0%

 

0.3% 

 

0.1% 

 

 

 

01:45

 

CNY

 

 

 

Chinese HSBC Manufacturing PMI 

51.50

 

50.90 

 

50.90 

 

 

 

02:00

 

SGD

 

 

 

Singaporean Bank Landing (MoM) 

481.70B

 

 

 

479.40B 

 

 

 

09:30

 

GBP

 

 

 

Housing Equity Withdrawal (QoQ) 

-8.0B

 

-9.1B 

 

-9.4B 

   

 

10:00

 

EUR

 

 

 

Greek Retail Sales (YoY) 

-18.10%

 

 

 

-11.80% 

   

 

WEEKLY

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event

Forecast

Previous

Jan. 01

01:00

CNY

Chinese Manufacturing PMI 

51.00 

50.60 

Jan. 02

00:00

EUR

German CPI (MoM) 

0.7% 

-0.1% 

 

00:00

EUR

German CPI (YoY) 

1.9% 

1.9% 

 

08:00

CHF

KOF Leading Indicators 

1.38 

1.50 

 

15:00

USD

ISM Manufacturing Index 

50.2 

49.5 

 Jan. 03

08:00

CHF

KOF Leading Indicators 

1.35 

1.50 

 

08:30

CHF

SVME PMI 

48.5 

48.5 

 

08:55

EUR

German Unemployment Change 

10K 

5K 

Upcoming Government Bond

Date Time Country 

Thursday, January 5: France will auction an estimated €7-8 billion ($9.1-10.4 billion) in 10-year and other long-term bonds 

Tuesday, January 10: Austria will auction €1.3 billion ($1.7 billion) in 5- and 10-year bonds

Thursday, January 12: Spanish 3- and 5-year bond auction

Friday, January 13: Italy will auction medium-long term bonds

Thursday, January 19: France will auction 5-year bonds

Thursday, January 19: Spanish 10-, 15-, and 30-year bond auction

Thursday, January 26: Italian long-term bond auction

Monday, January 30: Italian medium-long term bond auction

Monday, January 30: Belgian bond auction

Crude Oil Demand Decreases As US Faces Possible Recession

Crude Oil Demand Decreases As US Faces Possible Recession
Crude Oil Demand Decreases As US Faces Possible Recession

As the year draws to a conclusion crude oil prices are trading below $90.69. A lack of concrete decision on the US fiscal budget talk held on Sunday might have weighed down on oil prices. However, the threat of a collapse of Syria government due to prevailing civil war is limiting the fall. The UN envoy to Syria has warned that failure of government and rebels to pursue a political solution could lead to the full collapse of the Syrian state and threaten the World’s security.

Speculators can expect oil prices to gain on concern of possible supply disturbances in the Middle East region. On a positive note, China the world’s second largest oil consuming nation has reported a rise in manufacturing activity index which indicates higher fuel demand.

There are no economic data releases from the eurozone. From the US, manufacturing data releases from the Dallas region is likely to show improvement for the month of December. This may prove to be further supportive for oil prices ahead of another round of fiscal talk meet tonight. Let’s face it as the US fiscal deadline draws close little eco data will have a reaction on the markets. In a light volume day with many traders sidelined and many on vacation, the only focus today will be news and statements from Washington.

Crude oil futures closed slightly lower on Friday after a delays EIA report showing a smaller-than expected decline in the nation’s crude supplies last week, but the commodity still closed in positive on a w-o-w basis. Crude oil inventories fell by 0.6mn barrels.

Without a deal in the US some economists have predicted a collapse of the US economy turning back towards recession, others say that it might not be so bad, but it will have an effect on GDP in the US and a stronger effect on US consumer confidence which will weigh heavily on energy demands, which is a negative for crude oil.

With markets closing early today for the New Year’s holiday volume is expected to be light and speculators are not expecting a last minute deal from Washington, and if one is presented it will only be a stopgap measuring buying time.

The US dollar continues to climb as traders seek safety as financial and economic uncertainties weigh on the markets. This rise will also weigh on crude prices.

Natural gas futures shrugged off a smaller-than expected weekly inventory draw and closed higher on Friday, in reaction to forecasts for cold weather in US next week that could boost heating demand. As the storms and freezing weather continued over the weekend, increasing residential demand allowed natural gas to continue to climb this morning trading at 3.473.

Natural Gas Weekly Fundamental Analysis December 31, 2012 – January 4, 2013, Forecast

Natural Gas Weekly Fundamental Analysis December 31, 2012 – January 4, 2013, Forecast
Natural Gas Weekly Fundamental Analysis December 31, 2012 – January 4, 2013, Forecast
Introduction: Natural gas is nevertheless a major commodity in its own right, which is used for everything from cooking food to heating houses during the winter. Natural Gas is growing much faster than either of its non-renewable fossil fuel competitors, oil and coal.

Do not miss the weekly U.S. gas inventories report. The figures are issued by the Energy Information Administration (EIA) every Thursday afternoon at 15:30 (released Friday at 15:30 if there was a U.S. bank holiday on Monday). Here’s a link to the latest EIA report. The main natural gas moving figure in there is the change in inventories from the previous week. When it comes to the gas inventories report, we’re talking about billions of cubic feet, Bcf for short.

When the actual change in inventories number is released, it is the deviation from the expected number that is really important. If the actual inventories figure shows a 24 Bcf rise when an 84 Bcf increase was expected, then that is actually positive for the price of natural gas. All else equal, the price of natural gas should rise after the release.

A barrel of oil has roughly 6 times the energy content of natural gas. If the fuels were perfect substitutes, oil prices would tend to be about 6 times natural gas prices. However, due to various market characteristics discussed briefly above and the ease of using oil, the price of oil has been following a pattern of 8-12 times that of natural gas. However that ratio has spiked dramatically since March 2009.

Weekly Analysis and Recommendation:

Natural Gas was the big gainer at the end of the week, opening on Monday at 3.466 to close almost flat at 3.465.  Midweek gas fell to trade at 3.328 after holiday weather forecast showed unseasonably warmer temperatures. These caused in a decline in residential use, but as the old saying goes, never trust the weatherman. By the end of the week the south and the east were blanketed by snow and freezing temperatures as a major storm moved up from the gulf killing as many as 16 people.

Date

Last

Open

High

Low

Change %

Dec 28, 2012

3.465

3.420

3.486

3.361

1.32%

Dec 27, 2012

3.420

3.400

3.429

3.357

0.60%

Dec 26, 2012

3.399

3.337

3.438

3.333

1.86%

Dec 25, 2012

3.337

3.335

3.340

3.328

-0.96%

Dec 24, 2012

3.369

3.466

3.469

3.364

-2.80%

As temperatures across the US declined the price of gas climbed. Due to the holiday week the EIA inventory was delayed until Friday. The weekly inventory reported that U.S. natural gas storage fell by 72 billion cubic feet last week to 3.652 trillion cubic feet, less than a decline of 82 billion cubic feet in the preceding week. Analysts had expected U.S. natural gas storage to fall 76 billion cubic feet last week, though markets focused more on weather forecasts

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week of December 24 -28 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event

Actual

Forecast

Previous

Dec. 27

GBP

BBA Mortgage Approvals 

33.6K

34.6K

33.1K

 

USD

Initial Jobless Claims 

350K

360K

362K

 

USD

Continuing Jobless Claims 

3206K

3200K

3238K

 

USD

CB Consumer Confidence 

65.1

70.0

71.5

 

USD

New Home Sales 

377K

378K

361K

Dec. 28

EUR

French Consumer Spending (MoM) 

0.2%

0.1%

-0.1%

 

EUR

French GDP (QoQ) 

0.1%

0.2%

0.2%

 

EUR

Italian 10-Year BTP Auction 

4.48%

 

4.45%

 

USD

Chicago PMI 

51.6

51.0

50.4

 

USD

Pending Home Sales (MoM) 

1.7%

1.0%

5.0%

Historical: From 2010 to Present

Highest: 6.106 on Jan 07, 2010

Average: 3.836 over this period

Lowest: 1.903 on April 19, 2012

 

WEEKLY

 

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date

Time

Currency

Event

Forecast

Previous

Jan. 01

01:00

CNY

Chinese Manufacturing PMI 

51.00 

50.60 

Jan. 02

00:00

EUR

German CPI (MoM) 

0.7% 

-0.1% 

 

00:00

EUR

German CPI (YoY) 

1.9% 

1.9% 

 

08:00

CHF

KOF Leading Indicators 

1.38 

1.50 

 

15:00

USD

ISM Manufacturing Index 

50.2 

49.5 

 Jan. 03

08:00

CHF

KOF Leading Indicators 

1.35 

1.50 

 

08:30

CHF

SVME PMI 

48.5 

48.5 

 

08:55

EUR

German Unemployment Change 

10K 

5K 

Upcoming Government Bond

Date Time Country 

Thursday, January 5: France will auction an estimated €7-8 billion ($9.1-10.4 billion) in 10-year and other long-term bonds 

Tuesday, January 10: Austria will auction €1.3 billion ($1.7 billion) in 5- and 10-year bonds

Thursday, January 12: Spanish 3- and 5-year bond auction

Friday, January 13: Italy will auction medium-long term bonds

Thursday, January 19: France will auction 5-year bonds

Thursday, January 19: Spanish 10-, 15-, and 30-year bond auction

Thursday, January 26: Italian long-term bond auction

Monday, January 30: Italian medium-long term bond auction

Monday, January 30: Belgian bond auction

Natural Gas Forecast for the week of December 31, 2012, Technical Analysis

The natural gas markets fell for most of the week over the last five sessions, but bounced enough in order to form a bit of a hammer. However, we also see a shooting star just above at the $3.60 level from three weeks ago, and this suggests more along the lines of consolidation rather than some type of serious bounce.

The longer-term charts most decidedly bearish, and although we have perked up a little bit lately, this is probably more to do with seasonality than anything else. After all, it is wintertime in the northeastern United States, the area that uses the most natural gas on the planet. However, we have seen $4.00 as an area that is strong resistance, and we do not see that changing anytime soon. Although we have a nice hammer for the week, because of the conflicting shooting star from three weeks ago just above we are not willing to take this otherwise bullish signal. In fact, we think a break of the bottom of the hammer would be an excellent selling opportunity.

 

Natural Gas Forecast for the week of December 31, 2012, Technical Analysis
Natural Gas Forecast for the week of December 31, 2012, Technical Analysis