West Texas Intermediate crude rose following the released data today according to which more Americans than projected have filed applications for unemployment benefits and U.S. consumer prices decreased. The Consumer Price Index (CPI) dropped 0,4% today, going worse than the 0,2% decrease expectation. Futures climbed after jobless claims exceeded all forecasts in a Bloomberg survey of economists and additional stimulus to counter disinflation may be required according to James Bullard – St. Louis Federal Reserve President. The Department of Labor announced earlier that the number of jobless claims rose by 32 000 to 360 000, way above the expectations for increase by 2 000 to 330 000. Also the Philadelphia Fed Index went to -5,2 with a forecast of an improvement to 2 after a reading of 1.3 in April.
According to the Commerce Department the number of building permits rose by 14,3%, going way pass the 3,8% increase forecast. Meanwhile however, U.S. housing starts dropped 16,5%, which presents a more accurate data for the real started construction works, dropped 16,5%, poor performance in comparison to the expected 6,4% decrease.
Negative data about the U.S. economy put downward pressure and weakened the greenback, which often makes dollar-priced commodities attractive to investors. The dollar index, which tracks the dollars performance against a basket of six other major currencies, dropped 0,2% after a previous gain of 0,25%. WTI Crude rose by 0,3% on the day following the negative outlook for the U.S. economy. Bob Yawger, director of the futures division at Mizuho Securities USA Inc.commented : “he dollar dropped as soon as the jobs report came out and crude oil rallied. The correlation between the dollar and oil has tightened over the past week, after loosening for a while.”
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