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November 25th, 2011
Gold traders are more bullish after investors accumulated the biggest-ever hoard of the metal, with Europe’s deepening debt crisis driving them to protect their wealth with this year’s second-best performing commodity.
Eighteen of 26 surveyed by Bloomberg expect bullion to rise next week. Holdings in exchange-traded products backed by gold reached a record 2,350.8 metric tons on Nov. 23, now valued at $127.6 billion, according to data compiled by Bloomberg. Hedge funds and other speculators increased their net-long position, or bets on higher prices, for four weeks, the longest stretch since March, Commodity Futures Trading Commission data show.
Almost $12 trillion was wiped off the value of global equities since May on mounting concern about slower global growth, driving investors to what are perceived as the safest assets. Yields on Treasuries fell to a near-record low and gold is heading for an 11th consecutive annual gain. Bullion beat every other member of the Standard & Poor’s GSCI gauge of 24 commodities this year except for gasoil.
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November 28th, 2011
Forex – The euro gave up much of its gains made earlier Monday in Asia, as doubts emerged over a report that the International Monetary Fund may offer financial support to Italy.
The euro rose earlier in the day on expectations for bolder action from the international community to fix the euro-zone crisis.
A daily newspaper in the Italian city of Turin cited IMF sources Sunday as saying the fund could offer Italy between EUR400 billion and EUR600 billion in financial support. That would give Italian Prime Minister Mario Monti a window of 12 to 18 months to enact reforms to restore waning market confidence in Italy’s ability to repay its debt.
However, people familiar with international discussions on the European debt crisis told Dow Jones Newswires on Monday that the report wasn’t credible.
“I think it is baseless,” one of them said. “There has been no talk on something like that among (Group of Seven) authorities.”
The euro lost nearly 50 pips versus the dollar within a few minutes after the Dow Jones headlines hit the wire.
“We knew the euro was going to fluctuate based on headlines like these,” said Tomohiro Nishida, senior dealer at Chuo Mitsui Trust and Banking.
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November 28th, 2011
Commodities climbed the most in a month amid signs that European policy makers are taking steps to stem the debt crisis as retail sales improve in the U.S.
The Standard & Poor’s GSCI index of 24 raw materials advanced 1.4 percent to 645.01 at 11:58 a.m. in New York, heading for the biggest advance since Oct. 27. Twenty-one commodities gained, led by copper, silver and energy. The gauge lost 4.5 percent in the previous two weeks as rising borrowing costs deepened concern Europe would fail to contain the turmoil.
Leaders drafted a framework for Europe’s bailout fund that they will discuss this week, after U.S. retail sales during Thanksgiving climbed 16 percent to a record. Commodities are beating equities for the fifth consecutive year, gaining 2.2 percent while shares measured by the MSCI All-Country World Index tumbled 13 percent.
“Commodities are popping from short-term oversold levels on U.S. dollar weakness and corresponding hopes that the quickly deteriorating situation in Europe will force policy makers to come in with a coordinated, sizable policy response,” Scott Gardner, the chief investment officer at Verdmont Capital SA in Panama, said in an e-mail.
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November 25th, 2011
U.S. stock futures fell, indicating the Standard & Poor’s 500 Index will decline for a seventh day, as a surge in Italian borrowing costs at an auction intensified concern about a worsening in Europe’s debt crisis.
Citigroup Inc. and Morgan Stanley each retreated 0.7 percent, pacing losses in financial shares. Halliburton Co. (HAL) dropped 0.3 percent as oil slumped. Amazon.com Inc. (AMZN), the world’s largest Internet retailer, rose 0.1 percent.
S&P 500 futures expiring in December decreased 0.7 percent to 1,152.10 at 8:32 a.m. New York time. Dow Jones Industrial Average futures declined 66 points, or 0.6 percent, to 11,168. The U.S. stock market was closed yesterday for the Thanksgiving holiday and trading will end at 1 p.m. today.
“It is becoming apparent that European bonds are suffering from a buyer’s strike where institutions no longer want to fund European debt,” Mark Grant, a managing director at Southwest Securities Inc. in Fort Lauderdale, Florida, said in an e-mail. “The equity markets in the United States may test the lows again as there is increasing concern of a major recession in Europe.”
The S&P 500 was headed for a second week of losses, the longest losing streak since September as the burden of government debt grew around the world. The cost of insuring European sovereign bonds against default rose to a record.
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November 25th, 2011
Forex- The euro fell to a fresh seven-week low versus the dollar Friday in Asia as continuing uncertainty over the European sovereign debt crisis kept investors in risk-averse mode.
Stocks fell in most Asian markets Friday with the Nikkei Stock Average closing at its lowest level since March 2009 and European sovereign yields maintaining elevated levels. Among them, the 10-year Italian yield stayed above the key 7.0% mark.
Leaders of the euro zone’s three largest economies pledged Thursday to propose modifications to European Union treaties to further integrate economic policy and crack down on profligate spenders. But there are no signs of a shift in German Chancellor Angela Merkel’s reluctant stance regarding a more ambitious approach for the European Central Bank in addressing the crisis, which French officials have called for.
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November 21st, 2011
Heating oil futures slid below $3 a gallon as stocks fell on speculation that a deficit impasse will force $1.2 trillion in automatic U.S. spending cuts and that Europe’s debt crisis threatens global economic recovery.
Heating oil futures fell to a four-week low as a congressional debt-reduction panel is expected to say it can’t reach agreement. Josef Ackermann, chief executive officer of Deutsche Bank AG, said Europe needs a “firewall” to keep the debt crisis contained and should increase the size of a rescue fund.
“The overall weakness is due to the equity market,” said Fred Rigolini, vice president of Paramount Options Inc. in New York. “There’s problems with Congress here passing a debt resolution and concerns about Europe.”
Heating oil futures for December-delivery fell 3.82 cents, or 1.3 percent, to settle at $2.9943 a gallon on the New York Mercantile Exchange, the first settlement below $3 a gallon since Oct. 19.
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November 23rd, 2011
Commodity Brokers- MF Global Inc. brokerage customers, who may be missing more than $1.2 billion from their accounts, won’t be allowed to form a committee to represent their interests in bankruptcy court, a judge ruled.
Customer accounts believed to hold $5.45 billion were frozen Oct. 31, the day after the New York-based company reported a shortfall in funds that are required to be segregated under rules of the U.S. Commodity Futures Trading Commission. A previous estimate of about $600 million in missing funds was raised to $1.2 billion yesterday by James Giddens, the trustee appointed to liquidate the company and distribute refunds to customers.
Judge Martin Glenn, overseeing a hearing today in Manhattan Bankruptcy court, said he will deny commodity customers’ request to form an official committee. He urged the trustee to work closely with commodities customers.
“With 38,000 customers, for them to have an effective voice, there needs to be some agreed organizational structure that will allow them to be heard by the trustee,” Glenn told a lawyer for the trustee. Glenn said there were no legal precedents that would let a bankruptcy court grant the official committee.
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November 23rd, 2011
Forex-The euro sank to a six-week low against the dollar in European trade Wednesday as news broke of a poor German government bond auction and after the Bank of Greece warned the country risked exiting the euro zone, reinforcing an already gloomy tone as weak data helped to fan European recession fears.
Trading was cautious in Asian hours after weak Chinese manufacturing data and after a newspaper reported that the bailout plan to save Franco-Belgian bank Dexia SA (DEXB.BT) isn’t viable in its current form, suggesting the French government would have to shoulder a bigger share of the burden.
But the euro then plummeted across the board after Germany offered EUR6 billion of new 10-year benchmark bunds but only managed to sell EUR3.6 billion, prompting investors to worry that the euro-zone debt crisis might even be spreading to its hitherto solid German core.
“I cannot recall a worse auction,” said Marc Ostwald, a rates strategist at Monument Securities in London. “If Germany can only manage this sort of participation, what hope for the rest?”
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November 23rd, 2011
Crude oil futures dropped from a three-day high in New York as investors speculated that rising gasoline stockpiles in the U.S. and slowing economic growth in Europe will reduce demand for fuel.
Crude oil futures slipped as much as 1.7 percent before data today that may show shrinking manufacturing and services in Europe this month and falling U.S. durable-goods orders in October. The American Petroleum Institute said motor-fuel supplies climbed 5.42 million barrels last week. The U.S. economy expanded less than previously estimated in the third quarter, Commerce Department figures showed yesterday.
“There’s no reason for investors at the moment to be putting risk back on,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said in a telephone interview. “The API figures added to the moderate tone of the market, but the main picture remains what’s happening in Europe.”
Crude oil futures for January delivery slid as much as $1.62 to $96.39 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.51 at 3:27 p.m. in Singapore. The contract gained 1.1 percent yesterday to $98.01, the highest close since Nov. 17. Prices are up 19 percent from a year ago.
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November 22nd, 2011
The dollar swung briefly against the yen Tuesday in Asia as investors reacted to comments by Japanese Finance Minister Jun Azumi dismissing a proposal to buy large amounts of foreign bonds as a form of intervention.
The proposal, floated by former Bank of Japan official Kazumasa Iwata, for the government to establish a yen-denominated fund worth Y50 trillion to buy overseas securities, would involve yen-selling in process.
But Azumi said “there is a high possibility (such foreign-bond buying) would be tantamount to currency-market intervention,” and that the idea of foreign bond purchases “doesn’t fit well with our thinking,” since the purpose of intervention is to counter disorderly market moves.
The dollar initially rose to Y77.35 from Y76.95 in the wake of these remarks, but fell to Y77.03 soon afterward.
Traders said they were initially confused by the way the remarks were reported. At first they thought Azumi was for the deal, which turned out not to be the case.
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