As for FCPO, market eroded yesterday following weak trend in related outside markets. CBT soyoil, China Dalian futures and crude mineral oil all continued to ease. Rumours of very good 1-20 May exports to be reported by the cargo surveyors tomorrow encouraged some support which failed to carry through. Weaker ringgit, which lost about 0.6 pct vs USD, was supportive but largely ignored. Prices were 20 to 11 lower in the morning and recovered from 28 to 7 lower in the afternoon before eroding again towards close.
Confirmation of very good 1-20 May exports may check the current easier trend. Generally, there are no new factors. Higher production in the coming months and big soyabean crop are negative. Prospects of strong demand continuing in light of the upcoming Ramadan and discount of palm oil to soyoil, are supportive. Biggest factor will be weather, especially with talks of El Nino.
Technical view - prices continued to correct. A 50 pct correction is 2150 which is also a strong support level. Ringgit ~ 3.5920 / 3.5940 vs USD. Trend down ; RSI 47.47 ; parabolic SAR at 2145 ; stochastic oversold ; support 2140 / 2110 / 2070 ; resistance 2200 / 2235 / 2270 / 2320.
In other news...
🇨🇳 Shanghai Composite index up 3.15% as news that Beijing plans to gradually ease controls over deposit rates, improve the initial public offering (IPO) system and develop its capital market. Also boosting sentiment was a document issued by the State Council on Monday about steps to experiment a Shenzhen-Hong Kong stock connect.
🇯🇵 Nikkei 225 index recovered the 20,000 mark in morning trade and held on to a three-week high, but gains were capped as investors looked ahead to the release of first-quarter gross domestic product (GDP) on Wednesday. In the fourth quarter, Japan posted 0.6% quarterly and 2.2% annualized growth.
🇺🇸 Today’s release of the minutes of the April 28-29 FOMC meeting may provide some color on the Fed’s thinking on when it will need to raise interest rates. However, the U.S. economic data since the April 28-29 FOMC meeting has been weak, thus making the minutes obsolete to some extent.
🇺🇸 The Dow industrials climbed to a fresh record high for the second session in a row. Bullish factor was the sharp +20.2% increase in April US housing starts to a 7-1/3 year high.
* Dow 18312 (+13.51)
* S&P 500 2127 (-1.37)
* Nasdaq 5070 (-8.41)
* Dow 18312 (+13.51)
* S&P 500 2127 (-1.37)
* Nasdaq 5070 (-8.41)
€ The markets are waiting to see if the ECB at its weekly Greek review meeting today will boost the haircut on Greek bank collateral, thus reducing the liquidity available to Greek banks.
💶 The euro got hit with a double whammy and extended its losses against the dollar as the European Central Bank signaled it would step up bond buying in the coming weeks and investors got positive economic news out of the U.S. The dollar rose 1.5% against the common currency in late-afternoon trade.
⛽ The U.S. oil benchmark has slid for five straight sessions, the longest losing streak since mid-March. Though prices are still up more than 30% from a near six-year low reached in March, the benchmark has fallen 5.7% in the last five sessions.
* Crude oil 57.3 (-2.13)
* Brent Crude 64.39 (-1.88)
* Crude oil 57.3 (-2.13)
* Brent Crude 64.39 (-1.88)
⛽ The market consensus for today’s weekly EIA report is for a -2.0 million bbl drop in U.S. crude oil inventories.
👑 Gold prices fell nearly 2% as the dollar extended gains after positive U.S. data while global shares gained ground following the European Central Bank's suggestion it may speed up bond buying. Now, $1,209.65.
👑 A decline in bank-to-bank gold trading has hurt market liquidity and made it more expensive to hedge and conduct big trades.
🌴 FCPO (RM2,158) closed lower after lower CBT Soyoil, China Dalian Futures and crude mineral oil. Rumors of a very good 1-20 May exports to be reported today encourages some support in the middle session but failed to carry through closing. Price 50% correction from the recent high is 2150 which is also strong support level.
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