US dollar fell against major currencies on well-received bond auctions. The USD index (DXY) extended weakness for a second consecutive, dropping to a two-week low of 101.99 today in Asian session. In the commodity sector, crude oil prices pulled back from recent strength. Refined oil products climbed higher with heating oil and RBOB gasoline prices adding +0.26% and +0.44% respectively. Precious metals were mixed. Gold rose for four days in a row, gaining +1.49% to a 2-week high of 1156.4 at close, while silver was up +1.1% to settle at 15.16, also the highest close in 2 weeks.
US Treasury Department auctioned US$28B in 7-year notes at a high yield of 2.284%. The bid-to-cover ratio was 2.54, compared with recent average of 2.51. Auction of 5-year notes was also well-received. The US$34B auction came in at 2.057% with the bid-to-cover ratio at 2.72. Yields fell along the curve as debt prices rose after the auctions. The 10-year yields dipped briefly below 2.46%, the lowest in 2 weeks. Falling yields dragged down US dollar and the DXY slashed gains from its decade high made on December 20.
On oil inventory, the DOE/EIA reported that total crude oil and petroleum products stocks dropped -12.9 mmb to 1315.82 mmb in the week ended December 23. Crude stockpile gained +0.61 mmb to 486.06 mmb with inventory rising PADD II and III and dropping in PADD I, IV and V last week. Cushing stock added +0.17 mmb to 66.44 mmb while utilization rate slipped -0.5% to 91%. For refined oil products, gasoline inventory fell -1.59 mmb to 227.14 mmb as demand increased 0.1% to 9.28M bpd. Production increased +3.81% to 10.54M bpd while imports dropped -2.91% to 0.43M bpd during the week. Distillate inventory fell -1.88 mmb to 151.63 mmb although demand plunged -12.79% to 3.97M bpd. Production decreased -3.22% to 4.96M bpd while imports plunged -25.59% to 0.16M bpd during the week. The industry-sponsored API estimated that crude oil inventory rose +4.2 mmb while refined oil products stockpiles fell with gasoline and distillate losing -2.8 mmb and -1.7 mmb respectively.
On second-tiered data were released. US advanced goods trade deficits surprisingly widened to US$65.3B in November from US$61.5B a month ago. Initial jobless claims dropped -10K to 265K in the week ended December 24, sending the 4-week moving average -0.75K lower to 263K. Continued claims increased to 2.1M in the week ended December 17 from an upwardly revised +2.04M. Today, the Chicago PMI would probably show modest improvement to 57.8 in December, from 57.6 previously.