US Crude Subdued, US PMI, Housing Reports Slip

US crude is steady on Monday, as March futures trade at $33.57 a barrel in the North American session. Brent crude futures are trading at $36.63. On the economic front, Chicago PMI dropped sharply to 47.6 points, while Pending Home Sales declined by 2.5%. On Tuesday, the US releases ISM Manufacturing PMI.

It’s been a slow start in 2016 for the US economy, with soft growth and employment numbers in comparison with the red-hot numbers which characterized the second half of 2015. This was underscored on Monday, as PMI and housing numbers were very soft. Chicago PMI slipped to 47.6 points in February, compared to 55.6 points a month earlier. Weak housing numbers continue to raise concerns, as Pending Home Sales posted a sharp loss of 2.5% in the January report. This reading comes on the heels of New Home Sales, which slipped to 494 thousand in January, compared to 544 thousand a month earlier. This figure was well short of the estimate of 522 thousand.

The US economy has been grappling with a downturn in global demand, which has taken its toll on the export and manufacturing sectors. A strong US dollar, which has posted broad gains in recent months, has only exacerbated the situation. However, there was some positive news late in the week. US Preliminary GDP for the fourth quarter posted a strong gain of 1.0%, well above the estimate of 0.4%. There was also positive news from the manufacturing sector, as durable goods sparkled. Core Durable Goods rose 1.8%, crushing the estimate of 0.2%. This marked the key indicator’s strongest showing since March 2014. Durable Goods Orders followed suit with a sharp rise of 4.9%, rebounding from the previous reading of -5.1%. This was stronger than the estimate of 3.0%.

WTI/USD Fundamentals

Monday (Feb. 29)

• 9:45 US Chicago PMI. Estimate 52.1 points. Actual 47.6 points
• 10:00 US Pending Home Sales. Estimate 0.6%. Actual -2.5%
• 23:30 US FOMC Member William Dudley Speaks

Upcoming Key Events

Tuesday (March 1)

• 10:00 US ISM Manufacturing PMI. Estimate 48.5 points

*Key events are in bold

*All release times are EST

WTI/USD for Monday, February 29, 2016

WTI/USD February 29 at 12:35 EST

Open: 32.81 Low: 32.33 High: 33.77 Close: 33.57

WTI/USD Technical

• WTI/USD was flat in the Asian session. The pair showed posted losses in the European session but recovered. The pair is steady in North American trade.
• There is resistance at 35.09
• 32.22 is providing support

Further levels in both directions:

• Below: 32.22, 30.00, 26.64 and 22.88
• Above: 35.09, 37.75 and 40.00

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.