8% – Weekly oil drop

The end of last week found the EUR/USD major lingering in the 1.0780 area, due to latest German data release. There was no significant recoil in the trend after the publication of Germany’s GDP (Gross Domestic Product) figures, which falls in line with the market’s expectations, meaning a 0.3% growth qoq (quarter-on-quarter) and a 1.8% growth on an yearly basis.

In line, France’s third quarter GDP expanded with 0.3% qoq in the same period. For the whole Eurozone, the GDP went up with 0.35% in the last quarter, under the already low estimations. ECB (European Central Bank) added that results will recover in the month of December.

As from the US side, we find out that retail sales went up slower than the investors expected they would for the month of October, despite the fact that the employment rate reached a 10-month high the same month. As more detailed aspects, we can mention a 0.1% rise in October’s headline figure (expected 0.3%, previous 0.1%), +0.2% hike in core retail sales – sales excluding autos, gasoline and building materials (expected 0.4%) and a 0.4% drop in Wholesale prices for which the Labor Department explained it was due to the drop in eggs and meat prices.

USD/JPY reverted its daily loss from the early Friday session, as the American dollar shrugged off the bearish sentiment. In exact figures, the USD/JPY reached the 1-week low 121.62, but quickly retraced to a peak of 122.87, stopping just ahead of the 123 handle with an average 0.2% above the opening price.

Oil prices went forward with their decline in the passing week marking an 8-week loss strike on Friday and closing the session under the $41.00 per barrel amidst the lingering supply glut concerns and the growing possibility of a Fed rate hike in the next meeting. The WTI (West Texas Intermediate) barrel hit a 10-week low at the $40.23 mark/barrel, but managed to close the session on Friday marginally over at $40.70/barrel, lowest since August, 26. On the whole, crude has a 2.5% drop on Friday, and an over 8% downfall over the course of last week. The two main reasons that stand behind this setback are the lack of reduction in OPEC’s (Organization of Petroleum Exporting Countries) in the demand growth forecast and the downwardly revised IEA (International Energy Agency) demand forecast from the 5-years high. At the same time, US’s EIA (Energy Information Administration) reported a rise in oil inventories for last week.