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Saudi Arabia sticks to a high production in 2016

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Wednesday’s schedule was booked majorly by the US data releases regarding several important economic indicators. The Commerce Department’s report showed a boost in the corporate spending for the month of October, while household spending remained at an average note despite the hike in income.

October’s personal spending went up 0.1%, under the estimated 0.3% and at par with September’s 0.1%. Personal income came out 0.4%, in line with expectations and higher than September’s 0.1%. The CPE (Core Personal Expenditure) index printed as same as forecasted and equal to September’s 1.35 yoy (year-on-year), but the mom (month-on-month) figure stalled although it was estimated a 0.1% rise.

As for the corporate spending – represented by durable goods orders, numbers went up 3.0%, double the expected 1.5% and opposite to September’s 1.2% downfall. There was a three-month high in bookings for non-military capital goods (excluding aircrafts) at +1.3%, this figure coming after an upwardly revised 0.4% growth in September. As for the shipments of non-military capital goods (excluding aircrafts) – used in calculating the GDP (Gross Domestic Product), there was a decrease of 0.4%, while September has an upwardly revised 0.7% growth. Also below expectations came the new home sales, at 0.495 million inter-month, marginally better than September’s 0.468 million.

On Thursday the AUD /USD major was hit by the Australian Capex data printing under the expected [-2.9, -4.0] interval. The fall was over 30 pips after the release of actual figures coming at -9.2% qoq (quarter-on-quarter) for Q3.

The bulls’ gains have been majorly cut-off as the trend dropped from 0.7262 to a daily low of 0.7227 leading into the data. The focus is off RBA (Reserve Bank of Australia) until February next year, as attention shifts to December’s FOMC (Federal Market Open Committee) meeting and decision regarding Fed’s interest rate.

The black gold is continuing its struggle in the market, losses being extended as a delayed reaction to Saudi Aramco’s (the Saudi Arabia Oil Company) statement regarding the decision of keeping the same level of production going forward into 2016. These comments arrive a week before OPEC’s (Organization of Petroleum Exporting Companies) meeting on the 4th of December, where expectations are for the Saudi Arabia’s company to announce a change in its future strategy to support the present price. The release franticly contradict the market‘s expectations, as a result the downfall in crude prices. WTI’s (West Texas Intermediate) January futures went down 26 cents, meaning a 0.6% fall to $42.80 per barrel.

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