The price of crude oil was moving higher Monday morning with traders overlooking down beat manufacturing data out of China, amid hopes of a demand recovery from the euro zone following encouraging macroeconomic data our of the region.
Chinese manufacturing activity slowed in June, a survey by the China Federation of Logistics and Purchasing and the National Bureau of Statistics revealed Monday, adding to concerns that the economy may continue to lose momentum in the second quarter. The headline purchasing managers' index fell to 50.1 in June from 50.8 in May.
Light Sweet Crude Oil (WTI) futures for August delivery, rose $0.45 to $97.01 a barrel. Last week, oil gained over 3 percent on a slew of upbeat economic data out of the U.S. with pending home sales rising more than expected and initial jobless claims dipping in line with expectations. As well, concerns over supply disruption from Canada due to floods impacting oil pipelines helped prop oil prices.
This morning the U.S. dollar was leveling off from its one-month high versus the euro, while hovering around its one-month high against sterling and the Swiss franc. The buck was ticking higher versus the yen.
In economic news from the euro zone, Germany's manufacturing sector contracted for the fourth straight month in June, and at a slightly faster rate than previously estimated, final data from a survey by Markit Economics and BME showed. The seasonally adjusted manufacturing purchasing managers' index dropped to 48.6 in June from 49.4 in May. The score was a tad lower than 48.7 estimated earlier..
Meanwhile, an indicator euro zone's manufacturing sector performance increased more than previously estimated in June, detailed results of a survey by Markit Economics revealed. The headline purchasing managers' index rose to a 16-month high of 48.8 in June from 48.3 in May. The latest score was slightly above the flash score of 48.7.
Annual inflation in the euro area accelerated in June as expected by economists, latest data showed. Inflation as per the harmonized index of consumer prices advanced to 1.6 percent in June from 1.4 percent in May and 1.2 percent in April, flash estimates released by statistical office Eurostat revealed. The outcome matched economists' forecast.
Unemployment rate in euro zone increased to 12.1 percent in May from a downwardly revised 12 percent in April, the latest data from Eurostat revealed. The initially reported jobless rate for April was 12.2 percent, a record high. Economists had forecast a further increase in the rate to 12.3 percent in May.
From the U.S., the Institute for Supply Management is scheduled to release the results of its manufacturing survey for June at 10 am ET. Economists expect the manufacturing index to move into the expansion territory to 50.5 from 49 in May.
Simultaneously, the Commerce Department will release its construction spending report for May. The consensus estimates call for a 0.6 percent month-over-month increase in construction spending for May following a 0.4 percent increase in April.
During this week focus will be on the Labor Department's non-farm payrolls and jobless claims report, the ADP's private payrolls report due two days ahead of the government report and the results of the Institute for Supply Management's manufacturing and non-manufacturing surveys for June.
The Commerce Department's construction spending and trade balance and factory orders reports for the month of May will be under the trader's radar.
Also, focus will be on the crude oil inventories data from the API, due out Tuesday after the market hours, and the EIA due out the subsequent day.
