US crude is trading just above the $40 level. In the North American session, WTI/USD futures are trading at $40.12. Brent crude is trading at $41.71, as the Brent premium stands at $1.59. On the release front, there are no key events on the schedule. Personal Spending posted a gain of 0.4%, edging above the estimate of 0.3%. On Wednesday, the US will release two key events – ISM Non-Manufacturing PMI and ADP Nonfarm Employment Change.
With the Federal Reserve opting for the sidelines last week, the markets have circled September and December as possible dates for a rate hike. However, the economy has posted some weak numbers, underlined by a very soft Preliminary GDP report, which gained just 1.2%, compared to the estimate of 2.6%. The Fed will want to see stronger economic data before pressing the rate trigger. On Sunday, FOMC William Dudley, a close ally of Janet Yellen, said that the Brexit fallout posed a risk to the US economy and urged the Fed to proceed with caution before raising interest rates. The US will release wage growth and nonfarm payrolls later in the week, and these key employment numbers will be carefully monitored by the Fed as it mulls over a possible rate hike. If these releases do not meet expectations, the likelihood a move in September will sharply decrease. Employment releases will be in the spotlight for the remainder of the week, starting with ADP Nonfarm Payrolls on Wednesday.
The manufacturing sector has been a soft spot in a strong US economy, and the week started with lukewarm manufacturing numbers. ISM Manufacturing PMI and Manufacturing Prices pointed to slight expansion but both indicators fell short of their estimates. An ongoing global economic slump has taken its toll on the manufacturing sectors of developed economies, and the US is no exception. As well, Construction Prices disappointed with a drop of 0.6%, its fourth decline in the past five months.
Tuesday (August 2)
- 8:30 US Core PCE Price Index. Estimate 0.1%. Actual 0.1%
- 8:30 US Personal Spending. Estimate 0.3%. Actual 0.4%
- 8:30 US Personal Income. Estimate 0.3%. Actual 0.2%
- All Day – US Total Vehicle Sales. Estimate 17.1M
Upcoming Key Events
Wednesday (August 3)
- 8:15 ADP Non-Farm Employment Change. Estimate 171K
- 10:00 US ISM Non-Manufacturing PMI. Estimate 56.0
*Key events are in bold
*All release times are EDT
WTI/USD for Tuesday, August 2, 2016
WTI/USD August 2 at 11:30 EDT
Open: 41.36 High: 41.88 Low: 39.87 Close: 40.12
WTI USD Technical
- WTI/USD was flat in the Asian session. The pair posted strong gains in the European session but has reversed directions and posted strong losses in North American trade
- 39.32 is providing weak support
- There is resistance at 43.45
Further levels in both directions:
- Below: 39.32, 35.25 and 30.55
- Above: 43.45, 46.69, 50.13 and 53.50
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