Crude Oil Weakens ahead of FOMC Meeting, China Reduces Imports

Gold price retreated yesterday for the first time in 9 days as the dollar rebounded against major currencies. However, speculations on Fed's QE and tensions in the Korean Peninsula, as well as Iran and the Western may limit the fall.

The Conference Board said its Employment Trends Index rose for a 14th month to 97 in July from 96.7 a month ago. The increase was driven by positive contributions from 6 out of the 8 components. The improving indicators were: Initial Claims for Unemployment Insurance, Percentage of Firms With Positions Not Able to Fill Right Now, Part-Time Workers for Economic Reasons, Job Openings, Industrial Production and Real Manufacturing and Trade Sales.

However, the Conference Board stressed that the growth rate 'slowed sharply in the past 3 months, suggesting that employment growth will remain too weak to keep up with the increase in the working age population'. Moreover, the disappointing employment numbers suggest that 'the low levels of household spending and confidence are making businesses more cautious when it comes to hiring'.

While the focus has been put on FOMC's meeting later today, the Bank of Japan announced to leave the benchmark overnight rate unchanged at 0.1% and maintained its credit programs for lenders by a unanimous vote. Japanese yen rose as the centra bank refrained from implementing more stimulus measures.

China reported preliminary trade data today, showing the country's crude oil imports dropped from a record high made in June. Net crude improts slippped to 18.8M tons, from a record high of 22.1M metric a month ago. The data does have negative impact on oil price as China the world's largest oil consumer (according to EIA's estimates).