Crude oil strengthens in European session as USD retreats and macroeconomic data signaled economic improvement. The benchmark contract surges to 74, over +$1 from yesterday's close. On weekly basis, the black gold will likely record the first gain in 4 weeks.
The market was thrilled by the stronger-than-expected decline in crude and distillate inventory. Especially for distillate, the stockpile drew -2.95 mmb while demand rose to 3.792M bpd, the highest level since March, last week. This sent an optimistic sign to investors. Together with the cold weather, the market anticipates further draws are coming.
That said, current inventory levels remain at record high and demands are still below multi-year average. Therefore, oil's rally should be limited.
Gold price again plunged briefly below 1100 but then rebounded to 1110. Currently trading at 1109, the yellow metal is expected to decline for the third consecutive week.
The currency market was volatile today and traditional safe-haven, such as USD and Yen, retreat. Japanese yen slips against the euro and the dollar as the BOJ may continue to keep its policy rate near 0%. At the meeting today, policymakers decided unanimously to keep the uncollateralized overnight call rate at 0.1%. in the accompanying statement, the BOJ said 'does not tolerate a year-on-year rate of change in the CPI equal to or below zero percent', suggesting low rate policy may be maintained for some time.
Swiss Franc rose above 1.5 against euro, the first time since March when the SNB announced to intervene against appreciation of CHF against the euro. Currently trading at 1.495, decline in EURCHF accelerated after the pair broke below 1.5 and fell to as low as 1.4909. The central bank did not react by selling the franc and suggested that the SNB members were less cautious about rise in the currency.