Tuesday, December 14, 2010

20101214 0938 Global Market News.

OIL: Oil unchanged, market focus still on China
Oil prices fell on Tuesday in early Asian trade after moving higher in the previous session supported by data showing higher Chinese demand for oil in November. 
China's apparent oil demand hit a record 9.3 million barrels per day in November as refineries made more diesel than ever to help cover shortages on the domestic market,  Reuters calculations based on preliminary data showed. Crude oil processing hit a record 8.92 million bpd.

COMMODITY MARKETS: China stokes copper record, oil lags
NEW YORK, Dec 13 (Reuters) - Reports showing China's economy remains on the boil drove copper to record highs on Monday and triggered a run-up in many other commodities despite speculation that the giant raw materials consumer will raise interest rates soon, dampening demand.
"It's going to take an act of God to get the Fed to trim its bond buying," said Michael Woolfolk, an analyst at BNY Mellon. "That's what people are concerned about."
    
GLOBAL MARKETS: Global stocks rally falters, dollar slips
NEW YORK, Dec 13 (Reuters) - A stock rally fizzled on Wall Street on Monday as investors took profits and the dollar fell after Moody's warned it may change its U.S. outlook if a tax-cut deal is adopted.
"We've had a decent run-up over the last week or so and the market started out strong, but we saw a bit of profit-taking at the end," said Giri Cherukuri, head trader at Oakbrook Investments LLC in Lisle, Illinois.

SCENARIOS-China policy tightening and commodities
Dec 13 (Reuters) - Commodity investors may be switching  their stance on the risk of Chinese policy tightening away  from last month's fear to an optimistic outlook reflecting the  positive historical correlation between inflation and  commodity prices.
With data over the weekend showing inflation running at a  28-month high above 5 percent, most market watchers expect  Beijing to continue to tighten policy, including raising  interest rates.

China extends reserve requirements for top banks
HONG KONG/BEIJING, Dec 13 (Reuters) - China's central bank  told six of the country's biggest lenders that a special  increase in required reserves will be extended, the latest  step to try to quell inflation in a campaign that leaders this  weekend suggested would be intensified.
Three industry sources told Reuters that the special  increase in reserves that had been due to expire this week  will be extended for three months. That followed an official  reserve requirement increase for all banks -- the third in a  month -- that was announced on Friday.

PRECIOUS-Gold firms on physical demand, weaker dollar
LONDON, Dec 13 (Reuters) - Gold extended gains above $1,390 an ounce in Europe on Monday as the dollar surrendered early gains against the euro, and as last week's price dip of more than 2 percent brought physical buyers back to the market.
Concern over the outlook for the euro zone is also lending support to the precious metal, which is often seen as a safe store of value, analysts said.

FOREX-Euro bounces on sovereign buys; debt woes linger
LONDON, Dec 13 (Reuters) - The euro trimmed losses against the dollar on Monday, helped by East-European and Latin-American demand but hampered by uncertainty about how the euro zone would deal with its debt problems.
Trading volumes were reduced by the approach of the year-end, while few investors were willing to take on big positions before a Federal Reserve meeting this week and a European Union summit on Thursday and Friday.

U.S. wheat firm as weather worry outweighs USDA data
U.S. wheat and corn futures  crept higher on Monday in Asia, erasing early losses, as  persistent concerns about the impact of weather on global  supplies outweighed upbeat forecasts by the U.S. government.  "I think questions remain on the Australian crop and drier  conditions in the U.S. and China. These weather concerns are  probably overshadowing any announcements from the USDA," said  Garry Booth, a trader at MF Global Australia.

Treasury yields rise again, equities up
Selling pressure on 10-year U.S. Treasuries drove yields to fresh six-month highs on Monday as investors threatened to undo this year's bond rally on signs of global economic recovery and deeper U.S. deficits.  "If the market really thinks there will be a rate hike within a year, then the two-year yield could rise near 1 percent," said Tomoaki Shishido, a fixed-income analyst at Nomura Securities in Tokyo, adding that he did not believe there would be such a rate rise.

Oil steady to higher after OPEC output unchanged, eyeing China
PERTH, Dec 13 (Reuters) - Oil prices were steady to higher  after the Organization of Petroleum Exporting  Countries(OPEC) met over the weekend and agreed to keep crude  oil output levels flat.
"It looks like fundamentals are getting stronger heading into winter," said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp.    

COMMODITY MARKETS: Investors try to defend profit in thin trade
NEW YORK, Dec 10 (Reuters) - Copper hit a near record high but most commodities fell in thin trade for a second straight day on Friday as investors tried to defend profits before the year-end, amid a resurgent dollar.
"Investors who have performed well this year may be looking to protect their gains rather at this stage," said Anne-Laure Tremblay, an analyst for gold and other precious metals at BNP Paribas in London. U.S. silver producer, Coeur d'Alene Mines Corp.
   
GLOBAL MARKETS: Asian stocks rise, dollar up on upbeat U.S. data
SYDNEY, Dec 13 (Reuters) - Asian stocks rose on Monday as  investors took in their stride China's latest attempt to cool  inflation and fresh vows to tackle price pressure, while  upbeat U.S. economic data helped   shore up the dollar.
"Investors are thinking about this issue more sensibly  than they may have done so in the past, realising the broad  growth in the Chinese economy is good and policy makers aren't  over-reacting in terms of trying to slow the economy down,"  said Craig James, chief economist at CommSec.

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