Wednesday, October 20, 2010

20101020 1011 Global Market News.

Oil rebounds as reaction to China rate hike seen overdone
SINGAPORE, Oct 20 (Reuters) - Oil rebounded in reaction to the previous session's activity, when it racked up the biggest drop since February after China surprised markets by raising interest rates for the first time in nearly three years. "It seems to me there was a very knee-jerk reaction to the China move across all commodities, and now people are starting to step back and think about what it actually means for Chinese growth," said Yingxi Yu, a Singapore-based commodities analyst with Barclays Capital.

Gold steady after sharp fall, bargain-hunting seen
SINGAPORE, Oct 20 (Reuters) - Gold held steady, after falling nearly three percent in the previous session following China's surprise interest rate hike, and prices are supported by bargain-seekers.
"In the short term, gold will be under pressure, as investors switch over to the dollar from commodities. In addition, some investors have chosen to close their positions after sizeable profit," said Hou Xinqiang, an analyst at Jinrui Futures in China.

Asia stocks slide after China rate rise
SINGAPORE, Oct 20 (Reuters) - Asian stocks fell with Japan's Nikkei average tumbling over 2 percent, as investors fretted that China may be embarking on a policy tightening cycle after it surprised with its first interest rate rise since 2007.
"It is not clear whether the central bank will start on a process of additional rate increases under the pressure of asset price bubbles and hot money inflows, but this signal shows that the government is clearly concerned about escalating inflation and rising real estate prices," said Guo Yanling, analyst at Shanghai Securities.

PRECIOUS-Gold holds near $1,370/oz, eyes Fed for QE clues
LONDON, Oct 19 (Reuters) - Gold held steady near $1,370 an ounce in Europe on Tuesday as expectations for further monetary easing in the United States continued to support prices, though gains in the dollar put the brakes on the metal's run higher.
"Gold is not going to move much lower when you have the FOMC ahead of us in early November, the G20 preparations later this month and the full summit next month," said Credit Agricole analyst Robin Bhar.

FOREX-Dollar ekes out modest gains, data supports euro
LONDON, Oct 19 (Reuters) - The dollar gained on a basket of currencies for a third straight session on Tuesday, backed by worries among some players that the monetary easing expected from the U.S. Federal Reserve next month is largely priced in.
"Comments from Geithner and a reversal in short dollar positions is pushing it higher," said Gareth Berry, currency strategist at UBS, Singapore. "But this will not last too long with many waiting to see what the Fed will do next month."

US dollar up for 3rd day; Asia stocks mixed
HONG KONG, Oct 19 (Reuters) - The U.S. dollar edged higher for a third consecutive day, driven by traders continuing to take profits on gains in other currencies, while weakness in the technology and commodity sectors limited gains in Asian stocks.
"The reasons for the dollar being weaker, principally that move towards QE, are still very valid, so any pullbacks are not going to be enormous," said Gregg Gibbs, currency strategist with Royal Bank of Scotland in Sydney.

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