As for FCPO, market pulled back from sharp rise the past 2 days to close lower yesterday. Selling was led by profit taking following lower CBT soyoil, China Dalian futures and absence of new factors. Ideas that market was due for a downward correction, with RSI and stochastic indicating overbought, also prompted selling. Firmer ringgit, which gained about 0.3 pct vs USD, was also negative. Prices were 4 to 29 lower in the morning and continued easier in the afternoon.
Market is correcting from the overbought situation. There are no changes in the generally supportive short term factors. Prospects of increased use for biodiesel in USA and Indonesia, delayed Indian monsoon, better demand for festive Ramadan and stronger crude mineral oil are positive. Current high stocks and seasonally higher production in the coming months may cap gains.
Technical view - prices are correcting from the overbought situation. Indicators remain positive. trend up ; RSI 65.75 ; stochastic overbought ; support 2250 / 2225 / 2150 ; resistance 2350 / 2400 / 2450.
In other news...
A widening trade gap with China this year is adding pressure on the U.S. to complete a wide-ranging trade deal with other Asian nations. President Barack Obama is pushing for Congress to approve legislation to ease passage of the trade deal, which wouldn’t include China but is designed partly to counter its influence in the region.
🇺🇸 U.S. stocks closed higher despite a sharp rally in bond yields as investors found encouragement in signs of economic growth and coming resolution in the Greece debt talks.
* ADP private sector payrolls increased 201,000 in May, with the service sector boosting the figure to above the expected 200,000.
* The U.S. Apr trade balance shrank to a deficit of -$40.9 billion, a smaller deficit than expectations of -$44.0 billion.
* The May ISM non-manufacturing PMI fell -2.1 to 55.7, weaker than expectations of -0.8 to 57.0 and the slowest pace in 13 months.
* ADP private sector payrolls increased 201,000 in May, with the service sector boosting the figure to above the expected 200,000.
* The U.S. Apr trade balance shrank to a deficit of -$40.9 billion, a smaller deficit than expectations of -$44.0 billion.
* The May ISM non-manufacturing PMI fell -2.1 to 55.7, weaker than expectations of -0.8 to 57.0 and the slowest pace in 13 months.
⛽ Oil fell about 3% as traders and investors ignored a fifth straight weekly decline in U.S. crude stockpiles to focus instead on concerns that the global crude market continues to be oversupplied. Data showed the +0.2% increase in U.S. crude production in the week ended May 29 to 9.586 million bpd, the most in nearly 43 years, and expectations for OPEC to maintain its production levels when the cartel meets on Friday, which may exacerbate the global crude oil glut.
* U.S. crude $59.64 (-1.62 / -2.64%)
* Brent $63.90 (-1.61 /2.4%)
* U.S. crude $59.64 (-1.62 / -2.64%)
* Brent $63.90 (-1.61 /2.4%)
€ European stocks were up as stocks found support on stronger-than-expected economic data on Eurozone Apr retail sales and after the Eurozone May Markit composite PMI was revised higher. In addition, ECB Mario Draghi reaffirmed the continuation of ECB's asset purchase program and said the central bank wants Greece to stay in the euro zone.
📝 Optimism that a solution can be reached to the Greek debt crisis drove the Greek 10-year bond yield down to a 2-week low of 10.92% as Greek Prime Minister Tsipras meets today with European Commission President Juncker in Brussels.
🇨🇳 China HSBC/Markit services purchasing managers' index (PMI) for May rose to 53.5, up from 52.9 in April and comfortably above the 50-point level that separates expansion from contraction.
🇳🇿 Australia's economy expanded expanded 2.3% in the first quarter from the year-ago period, beating forecasts of 2.1% rise on-year. However, shares down under remained in the red and eventually closed down at a two-week low.
👑 Gold tumbled to 3-1/2 week low as shares rose after U.S. data showed its private sector added more jobs than expected in May, and prospects increased of a debt deal for Greece.
🌴 FCPO (RM2,294) closed lower as investors lock in profit following lower CBT Soyoil and China Dalian futures. From technical view, market is correcting from overbought situation. There are no change in the generally supportive short term factors.
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