Thursday, July 5, 2012

20120705 1829 FCPO EOD Daily Chart Study.

FCPO closed : 3164, changed : +42 points, volume : higher.
Bollinger band reading : upside biased.
MACD Histogram : rising, buyer in control.
Support : 3150, 3100, 3070, 3050 level.
Resistance : 3200, 3250, 3270, 3300 level.
Comment :
FCPO closed recorded gains with improved volume exchanged. Soy oil will resume trading today while crude oil price currently trading higher.
Price continue to pullback lower through out late afternoon ahead of ECB interest rate meeting followed by last one and a half hour surge breaking previous 5 weeks high potentially on persisting dry weather factor and surging crude oil price.
Daily chart study adjusted back to calling an upside biased market development potentially testing May 2012 high at 3193 level.
When to buy : buy at support or weakness with larger cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20120705 1805 FKLI EOD Daily Chart Study.

FKLI closed : 1618 changed : +1 points, volume : lower.
Bollinger band reading : upside biased.
MACD Histogram : rising, buyer in control.
Support : 1610, 1600, 1590, 1580 level.
Resistance : 1620, 1630, 1640, 1650 level.
Comment :
FKLI closed 1 point higher with decreased volume transacted touching new year high again doing 3.5 points premium compare to cash market that closed marginally higher. U.S. markets will resume trading tonight and today Asia markets closed mixed while European markets currently trading little higher.
Global markets traded indecisively ahead of European Central Bank interest rate decision.
Technical chart analysis still calling an upside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20120705 1728 Regional Markets EOD Daily Chart Study.

 Hang Seng chart reading : upside biased with possible pullback correction.
KLCI chart reading :  upside biased.

20120705 1608 Global Market & Commodities Related News by Reuters.

A rally in Asian shares fizzled out as markets marked time while European indices were poised to open little changed before the European Central Bank's policy decision later in the day, as investors consolidated recent gains ahead of widely anticipated moves from the European Central Bank and the Bank of England to stimulate the economy. U.S. markets were closed on Wednesday in observance of Independence Day.

The euro wallowed near one-week lows, with trading subdued in the wake of the U.S. holiday and ahead of a widely expected interest rate cut by the European Central Bank later in the day.

FOREX-Euro on defensive as ECB policy decision looms
TOKYO, July 5 (Reuters) - The euro wallowed near one-week lows on Thursday, with trading subdued in the wake of the U.S. holiday and ahead of a widely expected interest rate cut by the European Central Bank later in the day.    
The ECB is due to announce its decision at 1145 GMT, followed by a news conference by ECB President Mario Draghi. A Reuters poll of economists showed the majority expect the central bank to cut its main rate by 25 basis points to 0.75 percent, but they were evenly split on whether the ECB will lower its deposit rate.

Relentless heat in the key U.S. corn- and soybean-growing areas drove benchmark Chicago corn futures higher on Tuesday, marking the golden grain's biggest eight-day advance in 3-1/2 years as drought brought worries about world grain supplies.

Bahia cocoa flow slows as warehouses fill up
Deliveries of cocoa from Brazil's top producing state Bahia eased off in the last week as warehouses became crammed after weeks of abundant arrivals, data from Bahia Commercial Association and comments from analyst Thomas Hartmann showed.

Ukraine sees 20-21 mln T early grains crop in 2012
Ukraine, hit by poor weather during the sowing and wintering of major crops, expects to harvest 20 million-21 million tonnes of early grains - mostly wheat and barley - in 2012 against 34 million tonnes in 2011, farm minister Mykola Prysyazhnyuk said.

Bulgaria to reap over 4 mln T of wheat-Agmin
Bulgarian farmers will harvest over 4 million tonnes of wheat this year, more than initially expected due to rains in May, deputy Agriculture Minister Svetlana Boyanova said on Wednesday.

Australian raw sugar exports face wet weather delay
Australian raw sugar exports are likely to be delayed as wet weather slows the harvest of sugar cane, even though most of the crushing operations that were disrupted last week by rain have resumed, refining firms said on Wednesday.

Brent futures slipped below $100 a barrel as fresh evidence of weakness in European economies sparked demand concerns, even as investors kept up their hopes for stimulus measures to counter fragile global growth.

Norway oil talks fail, strike could last weeks-union
An 11-day strike in Norway's oil sector, which has slowed shipments from the world's eighth-largest exporter, could drag on for weeks, a labour union said on Wednesday after a second round of talks with employers failed to produce a deal over pensions.

Wary of sanctions, Kenya cancels Iran oil deal
Kenya is cancelling an agreement to import 4 million tonnes of Iranian crude oil per year because of international sanctions against Iran, its top energy official said on Wednesday.

EXCLUSIVE-Japan to import no Iranian oil in July-sources
Japan will not import any Iranian crude in July as buyers held back to avoid any risk of running foul of EU sanctions targeting insurance, which have severely disrupted the OPEC member's supplies, industry and government sources said on Wednesday.

Cost to secure aluminium soars, industry seethes
LONDON, July 4 (Reuters) - The cost paid to secure aluminium supplies in Europe has soared to record highs, with the metal still being used chiefly as a financing tool of choice for investors, leaving manufacturers and smaller merchants scrambling for stocks.
Aluminium premiums - money paid over and above the benchmark London Metal Exchange (LME) cash price to secure physical delivery - are supposed to reflect regional supply and demand trends.

INTERVIEW-Italy steel industry sees tough years ahead
Italy's steel industry, the second biggest in the European Union after Germany, will have to wait a few years for the crisis-hit economy to recover and drive a return of production volumes to a pre-crisis level, a senior industry executive said on Wednesday.

Copper traded largely steady as investors waited for the result of a European Central Bank meeting, at which interest rates are expected to be cut to a record low, a move which may stimulate economic growth and help boost metals demand.

Gold edged up, shrugging off a firm dollar, ahead of an expected rate cut by the European Central Bank that should boost liquidity and enhance bullion's appeal.

METALS-Copper steady ahead of ECB rate decision
SHANGHAI, July 5 (Reuters) - Copper traded largely steady on Thursday as investors waited for the result of a European Central Bank meeting, at which interest rates are expected to be cut to a record low, a move which may stimulate economic growth and help boost metals demand.
Three-month copper on the London Metal Exchange  shed 0.1 percent to $7,714.50 per tonne by 0421 GMT, after falling 1.2 percent i n the prior session.

PRECIOUS-Gold inches up on ECB rate cut hopes
SINGAPORE, July 5 (Reuters) - Gold edged up on Thursday, shrugging off a firm dollar, ahead of an expected rate cut by the European Central Bank that should boost liquidity and enhance bullion's appeal.
A recent raft of weak economic data has piled up pressure on central banks to take a more accommodative stance to nurture a fragile global recovery, putting gold on track for a third consecutive session of gains.

20120705 1606 Crude Palm Oil Related News by Reuters.

VEGOILS: Palm eases ahead of ECB rate meeting, weather caps losses DBYU2 FCPOc3 - RTRS 05-Jul-2012 13:21
Traders book profits in overbought market Market watching ECB policy decision later in the day Palm oil to drop to 3,062 ringgit -technicals
By Chew Yee Kiat
SINGAPORE, July 5 (Reuters) - Malaysian crude palm oil futures eased on Thursday as investors turned cautious ahead of the European Central Bank's (ECB) policy decision later in the day, booking profits from a weather-fuelled rally earlier in the week.
A Reuters poll of economists showed a majority expect the central bank to cut its main interest rate by 25 basis points to 0.75 percent, in a move that could spur economic growth and commodity demand. ECB/INT
A persistent drought in the U.S. Midwest that has damaged soybean crops pushed palm oil futures to a 5-week high on Wednesday, setting the stage for a price correction.
"The market is a little overbought technically and we see some initial profit taking. Fundamentally, end-stocks in Malaysia are tight while weather remains hot and dry in the U.S. Midwest," said a trader with a local commodities brokerage in Malaysia.
"Demand is also good with the current discount between palm olein and soybean oil."
By the midday break, benchmark September palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange fell 0.7 percent to 3,101 ringgit ($981) per tonne. Prices touched 3,147 ringgit on Wednesday, a level unseen since May 30.
Traded volumes stood at 14,177 lots of 25 tonnes each, slightly higher than the usual 12,500 lots.
On the technicals front, palm oil will fall to 3,062 ringgit per tonne as it has completed a rebound, said Reuters market analyst Wang Tao. (Full Story)
Traders anticipate more vegetable oil demand shifting to the cheaper palm oil on tighter global oilseed supply and buying ahead of the Muslim fasting month beginning in the third week of July.
Malaysia's palm oil exports rose in June from a month ago, according to cargo surveyor data. PALM/ITS PALM/SGS
Higher exports, together with weaker production growth, could pile further pressure on Malaysia's stocks, which fell to a 13-month low in May.
Industry regulator Malaysian Palm Oil Board (MPOB) will issue official data on stocks and output for June on Tuesday.
Brent futures were steady below $100 a barrel in Asian trade on Thursday as fresh evidence of weakness in European economies triggered demand concerns, even as investors kept up hopes for stimulus measures to counter fragile global growth. O/R
In other vegetable oils markets, the most active January 2013 soyoil contract DBYF3 on the Dalian commodity exchange edged up 0.1 percent, after touching a near two-month high on U.S. weather concerns.
The U.S. market is closed for the Independence Day holiday.

20120705 1116 Global Market & Commodities Related News.

GLOBAL MARKETS-Shares pause from rally, euro eases before ECB decision
TOKYO, July 5 (Reuters) - Asian shares eased as markets awaited the European Central Bank's policy decision later in the day, while the euro was pressured by widespread expectations of a rate cut to support fragile euro zone growth.
"With a lack of cues from the U.S. market which was closed overnight and the market waiting to see what cards the ECB will put on the table, trading looks to be constrained and aimless today," said Lee Young-gon, an analyst at Hana Daetoo Securities.

OIL-Oil slides below $100, focus on grim economy
LONDON, July 4 (Reuters) - Benchmark oil prices fell back below $100 a barrel on Wednesday, after a sharp gain the previous day, as new evidence of grim economic conditions in Europe offset expectations of fresh stimulus measures.
"After a strong rally yesterday, with the U.S. liquidity out of the market, the market is moving to a level that is easier to defend," Filip Petersson, an analyst at SEB in Stockholm, said.

POLL-China's top refineries cut July throughput on weak demand
BEIJING, July 4 (Reuters) - Top Chinese refineries will cut crude oil processing runs in July, following gains in the previous two months, as sluggish demand, poor refining margins and high fuel stocks hurt operations, a Reuters poll showed.
The 12 plants, which make up nearly a third of the capacity in China, the world's No.2 oil consumer, are located mostly in coastal areas, and plan to process 2.88 million barrels per day (bpd) of crude oil this month, the poll showed.

Japan to import no Iranian oil in July-sources
TOKYO, July 4 (Reuters) - Japan will not import any Iranian crude in July as buyers held back to avoid any risk of running foul of EU sanctions targeting insurance, which have severely disrupted the OPEC member's supplies, industry and government sources said on Wednesday.
Japan will join South Korea among top Asian buyers in halting all Iranian imports this month due to sanctions imposed by Brussels on Sunday that aim to cut Iran's oil revenues and force Tehran to curb its nuclear programme.

20120705 1009 Local & Global Economy Related News.

Exports increased 6.7% yoy in May (-0.1% in Apr), above the market expectation of 5.5%. Imports surged 16.2% yoy (10.2% in Apr), leaving a trade surplus of RM4.6bn in May (+RM7.5bn in Apr). (BT)

The government Wednesday announced that the retail price of RON97 would cost 20 sen less at RM2.60 per litre from today. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the lower price was in line with the dip in average global crude oil prices in Jun. (Bernama)

A total of 291 buildings were registered in Malaysia under the Green Building Initiative (GBI) as of 15 Jun this year. Energy, Green Technology, and Water Ministry Secretary General Datuk Loo Took Gee said of this number, 67 had received their Design Assessments and five the Final GBI Certificate. These 72 projects represent a total gross floor area of almost 2.5m sq meters, and help the local environment by reducing the emission of carbon dioxide, equivalent to more than 110,000 tonnes annually, he said. (Bernama)

Worldwide sales of semiconductors reached US$24.4bn in May, up 1.4% from Apr's sales of US$24.1bn, the third consecutive month of growth, but a sluggish global economy could impact the upward trend. (StarBiz)

China’s HSBC Services PMI fell to a 10-month low of 52.3 in Jun compared with 54.7 in May. (WSJ)

Home prices in China edged up 0.05% mom from May to Rmb8,688 (US$1,376) psm in 100 major cities, ending a losing streak since Sep 2011, according to China Index Academy research. (Shanghai Daily)

The Bank of Japan's consumer sentiment diffusion index improved to -39.5 in the three months to June, the highest level in almost five years, from -55.6 in Mar. (WSJ)

Eurozone retail sales rose 0.6% mom in May (a revised -1.4% in Apr), overshooting consensus expectations of a 0.2% gain, whilst on a yoy basis, the measure fell 1.7% (a revised -3.4% in Apr). (Dow Jones)

Eurozone’s Markit composite PMI rose to 46.4 in Jun (46.0 in May), above the preliminary reading of 46.0. The services PMI rose to 47.1 from 46.7 in May and came in above the preliminary estimate of 46.8. (Reuters)

The new French Socialist government launched €7.2bn in tax rises and €1.5bn in spending cuts to meet budget targets as growth flags. (AFP)

Indonesia’s Danareksa Consumer Confidence Index improved to 92.4 in Jun from 91.3 in May. (Bloomberg)

The Indonesian government acknowledged that it was considering a moratorium on the signing of new contracts for natural gas exports, saying the country needed the gas more to support national development. (Jakarta Globe)

Indonesian retail sales rose 8% yoy in May, the lowest pace since Oct and down from a revised 11.7% gain in Apr, but retailers were confident sales would increase in the next three to six months. (Reuters)

The Philippines’ long-term foreign currency-denominated debt rating was raised one level to BB+, the highest level since 2003, from BB by Standard & Poor’s. That’s one step below investment grade and on a par with neighboring Indonesia. The outlook on the rating is stable. (Bloomberg)

Thailand’s consumer confidence index on the overall economy rose from 67.1 in May to 68.5 in Jun. (Bangkok Post)

The Bank of Thailand has asked local commercial banks to raise their loan-loss reserve to cope with high global uncertainties and strong lending growth, Deputy Governor Krirk Vanikkul said. (Bloomberg)

Thailand’s Energy Policy Administrative Committee today slashed the Oil Fund levy on diesel by 50 satang per litre, to ensure that retail price is below THB30 per litre despite a spike in global prices. (The Nation)

The National Assemblies of Laos and Vietnam signed a memorandum of understanding to deepen the relations, solidarity and cooperation between the two assemblies and their relevant departments through bilateral and multilateral frameworks. (Vientiane Times)

With the current macroeconomic uncertainties, it is impossible for Vietnam to achieve this year’s GDP growth target of 6-6.5%, said Tran Hoang Ngan, member of the National Assembly Economic Committee, after the latest report by the General Statistics Office showed national GDP grew at 4.38% yoy in Jan-Jun. (The Saigon Times)

Vietnam’s total money supply, M2, in the year’s first half is estimated to pick up 6.84% against late 2011, according to the Government Office. M2 in six months grew 6.84% from Dec 2011, and was up 4.47% as of end-May, versus the year’s target of 14-16%. (The Saigon Times)

Vietnam’s Government will continue to place top priority for the remainder of this year on keeping inflation in check and stabilising the macro-economy, said Prime Minister Nguyen Tan Dung. (Vietnam News)

20120705 1008 Malaysia Corporate Related News.

The secured creditors of Asia Petroleum Hub Sdn Bhd (APH), whose rights to develop a petroleum hub on an island off Johor are up for grabs, are seeking a 30-year tax break in a bid to make the project commercially viable. APH's concession is over a 30-year period. "Initially, the project was estimated at RM1.5bn. Now to complete the job, another RM1bn is needed. It will be tough without a tax break to recover investments in the project," said a source. In a related development. the receivers and managers of APH, PricewaterhouseCoopers (PwC), placed an advertisement to sell APH's conditional rights to development a petroleum storage, blending and distribution terminal. The advertisement is to solicit expression of interest, with prospective bidders needed to make a full-fledged offer at a later date. ZAQ Construction and Muhibbah Engineering are opposed to the sale of APH's conditional rights, as it would leave the two with little recourse to recover the amounts owed to them. The parties said to be interested in APH include Swiss group Mercuria Energy Group Ltd, Petrofac Ltd and Tan Sri Syed Mokhtar Al-Bukhary's Port of Tanjung Pelepas Sdn Bhd. The shareholders of APH are KIC Oil & Gas, controlling 90% equity interest in the company, while the remaining 10% is held by UMNO-linked Trek Perintis Sdn Bhd. (Financial Daily)

MMC Corp Bhd plans to submit next month a proposal on the privatisation of national railway company Keretapi Tanah Melayu Bhd (KTMB) to the government. Group managing director, Datuk Hasni Harun said the proposal is subject to the result of due diligence study conducted by the company which is expected to be completed by the end of the month. KTMB suffered some RM1.45bn in accumulative net losses up until 2008. It is further believed that the national railway company cannot "afford" to pay back its own operational costs and loans. However, MMC will not have to absorb KTMB's debt of over RM1bn because the fixed assets comprising 11 depots, land, building and equipment will remain with the government. (BT)

Mass Rapid Transit Corp Sdn Bhd (MRT Corp) is considering inviting tenders for 31 packages of the Sungai Buloh-Kajang mass rapid transit line in the current quarter. Strategic communications and public relations director Amir Mahmood Razak said 85 contracts have been made available, 33 worth RM15.5bn have been awarded, 21 are being evaluated and 31 have yet to be called. Amir said MRT Corp is confident that all the tenders can be awarded by year-end and the massive project can be completed within the given timeframe. (Financial Daily)

Ambank Group has teamed up with Travelex Global, the world's largest foreign exchange specialist, to introduce a suite of foreign exchange products and services offerings called AmBank-Travelex money changing services. AmBank Group chairman, Tan Sri Azman Hashim said the service offers local customers a strong international connectivity proposition. Travelex CEO Peter Jackson said the company will offer its foreign currency services via selected AmBank branches in a unique co-branded agreement. A total of 81 currencies will be available for exchange. AmBank-Travelex money changing service is already operational at eight selected AmBank branches in the Klang Valley. (BT)

Malaysia Airlines (MAS) will add another international destination to its flight network service by introducing the commencement of thrice weekly services between Kuala Lumpur and Kathmandu effective Sept 1. The national carrier said the flights would be operated with a two-class configured Boeing 737-800 aircraft comprising 144 economy class and 16 business class seats. (Bernama, BT)

Malaysia Airport Holdings Bhd (MAHB) has maintained that construction cost for the Kuala Lumpur International Airport 2 (KLIA2) will remain at RM3.9bn as previously announced, refuting remarks by an AirAsia Bhd top official that it is set to go up to RM5bn. "Whatever we have announced, we stick to that," and MAHB official said. (Malaysian Reserve)

Tricubes Bhd will appeal against Bursa Malaysia's decision to reject its regularisation plan, said its CEO Khairun Zainal Mokhtar. "We plan to seek clarification from Bursa the soonest possible," he added. The company pointed out the rejection by Bursa would only affect the "listing status" but did not impact the company's ability to carry out its business as usual. (Financial Daily)

20120704 1001 Global Market Related News.

Asian Stocks Snap Six-Day Gain on German Data Before ECB (Source: Bloomberg)
Asian stocks fell, with the benchmark index heading for its first decline in seven days, after service-industry reports in Germany and the U.K. missed estimates, supporting the case for an interest-rate cut by the European Central Bank today. Samsung Electronics Co. (005930), the world’s biggest maker of mobile phones by sales that gets 19 percent of sales from Europe, slipped 0.7 percent in Seoul. Aquarius Platinum Ltd. tumbled 8.2 percent in Sydney after saying output will decline. Sun Hung Kai Properties Ltd. and other Hong Kong developers may be active after a government report showed home sales fell last month . The MSCI Asia Pacific Index (MXAP) lost 0.2 percent to 119.05 as of 9:52 a.m. in Tokyo, before markets open in Hong Kong and China. The gauge climbed yesterday to its highest level since May 10 after euro-zone leaders last week agreed to relax conditions for rescuing lenders, easing concern about the region’s debt crisis.
“I would still be cautious to suggest that there’s going to be a sustained move upwards,” said Tim Schroeders, a portfolio manager who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “The market remains skeptical that policy measures in Europe will be in place in a timely fashion. Significant details still need to be addressed but for the time being the initiatives to tackle the debt crisis have broadened.”

Japan, Australia Stocks May Be Little Changed Before ECB (Source: Bloomberg)
Japanese and Australian stocks may open little changed after service-industry reports in Germany and the U.K. missed estimates amid speculation the European Central Bank and the Bank of England will ease monetary policy. Shares of Canon Inc. (7751), the world’s biggest camera maker that gets 31 percent of its revenue in Europe, may be active in Tokyo. Inpex Corp. (1662), Japan’s No. 1 energy explorer, may be active after oil slid from the highest price in a month. Aquarius Platinum Ltd., the fourth-largest producer of the metal, may be active in Sydney after saying output will decline as it conserves cash amid falling prices. Futures on Japan’s Nikkei 225 Stock Average (NKY) weren’t traded in Chicago yesterday with U.S. equity markets closed for a holiday. New Zealand’s NZX 50 Index was little changed today in Wellington. Futures on the Standard & Poor’s 500 Index (SPXL1) were little changed today as investors await a U.S. jobs report tomorrow.
“The market is likely to be in a gridlock,” said Mitsushige Akino, Tokyo-based executive officer at Ichiyoshi Investment Management Co., which oversees about 40 billion yen ($501 million). “You want to wait and see how the ECB meeting and the U.S. jobs data will come out. It’s not easy to buy or sell.”

China Stocks Drop for First Time in Four Days on Profit Concern (Source: Bloomberg)
Chinese stocks fell for the first time in four days as concern that construction activity is faltering dragged industrial companies lower, overshadowing a rally by energy producers. Taiyuan Heavy Industry Co. (600169) fell to the lowest level in 3 1/2 years after saying it will post a first-half loss. Sichuan Hongda Co. plunged 9.2 percent after the government ordered it to halt building a plant that drew protests. China Shenhua Energy Co. advanced 1.3 percent after oil jumped more than 4 percent in New York yesterday. The Shanghai Composite Index (SHCOMP) fell 1.88 points, or 0.1 percent, to 2,227.31 at the close. The CSI 300 Index slipped 0.2 percent to 2,464.92. The Bloomberg China-US 55 Index, the measure of the most-traded U.S.-listed Chinese companies, added 1.3 percent at the close in New York.
“There’s a lack of liquidity in the market on concerns about the economy,” said Cao Xuefeng, an analyst at Huaxi Securities Co. in Chengdu. “In the near term, any gains will be limited and trading is likely to be range-bound.”

Bovespa Climbs for Fourth Day as OGX, Usiminas Lead Gains (Source: Bloomberg)
The Bovespa (IBOV) index advanced for a fourth day as raw-materials producers gained amid speculation central bankers in China and Europe will ease monetary policy, helping shore up global growth. Steelmakers Usinas Siderurgicas de Minas Gerais SA and Cia. Siderurgica Nacional SA helped lead gains on the benchmark index. Eletropaulo Metropolitana SA, the Brazilian unit of AES Corp. (AES), rebounded after plunging 10 percent yesterday. The Bovespa climbed 0.5 percent to 56,076.82 at the close in Sao Paulo. Forty-three stocks gained on the gauge while 17 declined. The real weakened 0.6 percent to 2.0279 per U.S. dollar. The European Central Bank will cut interest rates tomorrow, according to a Bloomberg survey of economists. In China, a state-run newspaper said yesterday policy makers may lower lenders’ reserve requirements three more times this year.

Stocks Pessimism Posts Longest Streak Since 2011 Market Bottom (Source: Bloomberg)
Bearish sentiment in a survey of individual investors has surpassed the historical average for the longest stretch since October, when stocks began a rally that lifted the Standard & Poor’s 500 Index (SPX) 24 percent. A poll by the American Association of Individual Investors showed 44.4 percent of respondents say American stocks will fall over the next six months. That’s the eighth consecutive week that pessimism stayed above the 25-year average of 30 percent. Concern Europe’s debt crisis will deepen and the recovery weaken have erased as much as $1.8 trillion from U.S. equities since March. The last time the proportion of bears topped the average for this long was in the 14 weeks through Oct. 20, 2011, just after the S&P 500 bottomed at 1,099.23. The benchmark measure for U.S. stocks went on to surge as much as 29 percent, reaching a four-year high of 1,419.04 on April 2.
“Individual investors tend to get in when the markets are red hot and they tend to get out when the markets are at the bottom,” Robert Carey, who helps oversee $53 billion as chief investment officer of Wheaton, Illinois-based First Trust Portfolios, said in a telephone interview. “It’s been one series of issues after another, but, ultimately, fundamentals will weigh out and overwhelm any sentiment that people have.”

European Stocks Are Little Changed; Iberdrola Shares Fall (Source: Bloomberg)
European stocks were little changed as speculation that central banks will ease monetary policy offset service-industry measures in the U.K. and Germany that missed economists’ forecasts. Iberdrola (IBE) SA tumbled 5.6 percent as utilities dropped. Chr. Hansen A/S, the maker of natural food colors and cheese cultures, climbed 12 percent after reporting earnings that exceeded estimates. Societe Television Francaise 1 (TFI) advanced after UBS AG (UBSN) advised buying the shares. The Stoxx Europe 600 Index slipped less than 0.1 percent to 257.33 in London, after rallying 5.2 percent over the previous three days. The gauge is still on course for a fifth straight week of gains, the longest stretch since January, as European leaders agreed to address flaws in their bailout programs to ease the sovereign-debt crisis and speculation grew that central banks will take steps to boost the economy.
“Seeing equities fall back after a 7 percent rise as a result of the summit meeting last week suggests that common sense is returning to the market,” said Henrik Drusebjerg, a strategist at Nordea Bank AB in Copenhagen. “If investors are hoping that tomorrow’s central bank meetings will see initiatives on top of lowering interest rates, they will be disappointed.”

Most Emerging Stocks Gain on Stimulus Hope, Vehicle Sales (Source: Bloomberg)
Most emerging-market stocks rose, led by consumer companies, after automakers beat estimates for U.S. sales and on speculation that Chinese and European central banks will ease monetary policy. The MSCI Emerging Markets Index (MXEF) was little changed at 956.26 at the close in New York, with 442 stocks advancing and 308 declining. Brazil’s Bovespa (IBOV) index rose 0.5 percent, led by raw-materials producers such as Usinas Siderurgicas de Minas Gerais SA (USIM5) and Cia. Hyundai Motor Co. (005380), South Korea’s biggest carmaker, climbed the most in two weeks as it sold more cars in the U.S. The Hang Seng China Enterprises Index (HSCEI) of Chinese stocks listed in Hong Kong fell 0.3 percent. The Micex Index (INDEXCF) gained 0.5 percent in Moscow.
The European Central Bank will cut interest rates tomorrow, according to a Bloomberg survey of economists. The 21 countries in the developing-nation gauge send about 30 percent of their exports to the European Union on average, data compiled by the World Trade Organization show. A government-linked newspaper in China said policy makers may lower lenders’ reserve requirements three more times this year.

U.K. Stocks Are Little Changed Before ECB, BOE Meetings (Source: Bloomberg)
U.K. stocks closed little changed, after the benchmark FTSE 100 Index rallied to a two-month high yesterday, as investors awaited the outcome of tomorrow’s central-bank policy meetings. Barclays paced banks lower as former Chief Executive Officer Bob Diamond attended a Treasury Select Committee hearing. Man Group (EMG) Plc slid 4.7 percent after the hedge-fund manager reported a decrease in assets last week at its flagship fund. Tullow Oil Plc (TLW) fell 1.9 percent after the oil producer suspended drilling at a well in Kenya. The FTSE 100 slid 3.26, less than 0.1 percent, to 5,684.47 at the close in London. The volume of shares changing hands on the gauge was 50 percent below the 30-day average with the U.S. closed for the Independence Day holiday. The broader FTSE All- Share Index also slid less than 0.1 percent today, while Ireland’s ISEQ Index rallied 0.8 percent.
“The recent risk rally across global markets appears to be alluring clients into booking some profits,” said Ishaq Siddiqi, a market strategist at ETX Capital in London. “Today’s price-action is likely to continue until the European Central Bank and Bank of England policy decisions tomorrow.”

German Stocks Fall From Highest in Two Months; Banks Drop (Source: Bloomberg)
German stocks fell for the first day in four, pulling the DAX Index (DAX) down from the highest level in almost two months. EON AG dropped 1.6 percent after JPMorgan Chase & Co. and Citigroup Inc. cut their recommendations on the shares. Linde AG (LIN) fell 1.3 percent after Credit Suisse Group AG lowered its rating on the stock. Deutsche Bank AG (DBK) and Commerzbank AG (CBK), Germany’s biggest lenders, retreated at least 1 percent each. The DAX Index fell 0.2 percent to 6,564.80 at the close in Frankfurt, as investors await an interest-rate decision by the European Central Bank and a U.S. report on payrolls later this week. The gauge has gained 10 percent from its 2012 low on June 5 as Greece formed a new government and European leaders agreed to address flaws in their bailout programs. The broader HDAX Index lost 0.1 percent today. U.S. equity markets are closed for the Independence Day holiday.
“Investors have spent the first half of this week eagerly looking forward to the final two days, when central bank meetings and non-farm payrolls will provide plenty of excitement,” said Rupert Osborne, a futures trader at IG Index in London. “Caution predominates over the U.S. Independence Day holiday.”

Treasuries Rise Before U.S. Employment Data (Source: Bloomberg)
Treasuries advanced before reports today and tomorrow that economists said will show the U.S. is struggling to add jobs. The economy is “slowing markedly,” Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., wrote on Twitter July 3. Yields slid to a record following the prior employment report on June 1, when the Labor Department said payrolls grew by 69,000, the smallest gain in a year. “There’s a lot of support for Treasuries,” said Tomohisa Fujiki, an interest-rate strategist at BNP Paribas Securities Japan Ltd. in Tokyo. “Jobs growth is sluggish. The pace of recovery seems to be slowing.” BNP is one of the 21 primary dealers that trade directly with the Fed. Benchmark 10-year yields declined two basis points to 1.61 percent as of 9:33 a.m. in Tokyo, according to Bloomberg Bond Trader data. The record low yield was 1.44 percent. The 1.75 percent note due in May 2022 rose 6/32, or $1.88 per $1,000 face amount, to 101 9/32.
The U.S. added 90,000 jobs in June and the jobless rate held at 8.2 percent, based on Bloomberg News surveys of economists before the Labor Department reports the figures tomorrow. It would be the third month that the economy created fewer than 100,000 positions.

Korean Won Retreats From Two-Month High on Europe Slowdown Signs (Source: Bloomberg)
South Korea’s won retreated from a two-month high after data indicated an economic slump is deepening in Europe, bosltering demand for the relative safety of the dollar. Government bonds were little changed. Services and manufacturing output shrank in June for a fifth month in the euro area and services unexpectedly contracted in Germany, reports showed yesterday. The European Central Bank will cut its benchmark interest rate by at least a quarter of a percentage point today, according to 52 of 63 economists in a Bloomberg survey. South Korea’s finance ministry releases its monthly economic assessment report at 10 a.m. local time. The Kospi Index (KOSPI) of shares fell. “The won will move within a range as investors wait for today’s ECB meeting,” said Han Sung Min, a Seoul-based currency dealer at Busan Bank. “Europe’s weakening data will put downward pressure on the won and demand to buy the dollar cheap may rise after the won’s recent gains.”
The won slid 0.1 percent to 1,137.00 per dollar as of 9:29 a.m. in Seoul, according to data compiled by Bloomberg. It touched 1,132.79 yesterday, the strongest since May 4. The currency’s one-month implied volatility, a measure of exchange- rate swings used to price options, increased five basis points, or 0.05 percentage point, to 7.23 percent.

Aussue Is Near Recrod Versus Euro Before ECB, BOE Meet (Source: Bloomberg)
Australia’s dollar was 0.5 percent from a record against the euro before European Central Bank and Bank of England meetings to discuss ways to provide economic stimulus, boosting demand for currencies tied to growth. New Zealand’s dollar, known as the kiwi, was near its strongest level versus the greenback in two months before U.S. data tomorrow forecast to show payrolls in June probably concluded the smallest quarterly advance in more than two years. Australia’s government is scheduled to report on the trade balance for May today. Australian Treasurer Wayne Swan said he will discuss trading between the Chinese yuan and the so-called Aussie next week in Hong Kong. “You might see the Aussie and kiwi supported a little bit if the BOE and ECB do more stimulus,” said Joseph Capurso, a strategist in Sydney at Commonwealth Bank of Australia. (CBA) “There’s a good chance that the Aussie-euro will soon hit a record high.”
The Australian dollar was little changed at 82 euro cents as of 10:55 a.m. in Sydney, compared with a record high of 82.42 set on Feb. 7. The currency slid 0.1 percent to $1.0271, and fetched 82.10 yen from 82.08. New Zealand’s dollar was little changed at 80.36 U.S. cents after yesterday touching 80.65, the strongest level since May 3. It was at 64.24 yen from 64.19.

Euro Stays Lower Before German Factory Data, ECB Meeting (Source: Bloomberg)
The euro remained lower against most of its 16 major peers before German data forecast to show factory orders dropped, adding to signs Europe’s debt crisis curbed demand from the region. The European Central Bank will probably reduce borrowing costs at a policy meeting today to stimulate the euro-area’s flagging economy, according to a Bloomberg News poll. The pound maintained a three-day slide on speculation the Bank of England will extend its so-called quantitative easing program today. “The euro is under pressure and will stay under pressure,” said Derek Mumford, a director in Sydney at Rochford Capital, a currency risk management company. “Germany is a huge market and if that market does slow down, it can only undermine global growth and confidence going forward.”
The euro traded at 100.11 yen as of 9:22 a.m. in Tokyo after falling 0.5 percent to 100.07 yesterday. It was little changed at $1.2528 following a 0.6 percent decline. The dollar bought 79.91 yen from 79.88. The pound was at $1.5591 after retreating 0.8 percent in the past three days to $1.5589.

China Needs to Ease One-Child Policy, State Researchers Say (Source: Bloomberg)
Chinese government researchers called on the nation to ease its one-child policy as soon as possible to cope with an aging population and labor shortage. One option is allowing all people to have a second child, three researchers including Yu Dong from the State Council’s Development Research Center wrote in an article in yesterday’s China Economic Times, a newspaper affiliated with the center. “The longer time we take to adjust the policy, the more vulnerable we become,” the piece said. The commentary adds to debate on the policy, adopted in the late 1970s, during the deepest economic slowdown since the global financial crisis and ahead of a once-in-a-decade power handover. Last month, the alleged forced abortion of a seven- month-old fetus sparked a public outcry and resulted in the suspension of three officials in a western city.
“It is suggested that the birth control policy be adjusted as soon as possible” against the backdrop of a vanishing demographic dividend, accelerating aging and a potential future labor shortage that are set to become major challenges, the researchers wrote. The recommendation came in a paragraph within a broader piece about social policies.

Japan Should Boost JGBs to Spur Growth, Sakakibara Says (Source: Bloomberg)
Far from tightening its fiscal belt, Japan should expand the world’s largest debt pile to rekindle economic growth, said Eisuke Sakakibara, a former Ministry of Finance official. Prime Minister Yoshihiko Noda’s push to double the sales tax to lessen the government’s reliance on Japanese government bonds could further damage an economy already struggling amid a slowdown in exports, Sakakibara, known as “Mr. Yen” and now a professor at Aoyama Gakuin University in Tokyo, said in an interview yesterday. “We should be selling large amounts of JGBs to fund an economic stimulus,” he said. “We could also consider a cut to the corporate tax rate as a stimulus step. The big problem for the Noda administration is there’s no one in an important office who understands the economy.”
Japan’s bond market is signaling no immediate concern about a public debt burden that’s now double the nation’s annual economic output. The benchmark 10-year note yield closed yesterday at two basis points from a nine-year low, and central bank data showed last month that overseas investors owned 8.3 percent of JGBs at the end of March, the most on record.

S&P Raises Philippines’ Credit Rating to Nine-Year High (Source: Bloomberg)
The Philippines’ debt rating was raised to the highest level since 2003 by Standard & Poor’s, taking President Benigno Aquino nearer his goal of attaining investment grade. The nation’s long-term foreign currency-denominated debt was raised one level to BB+ from BB, S&P said in a statement yesterday. That’s one step below investment grade and on a par with neighboring Indonesia. The outlook on the rating is stable. “The foreign currency rating upgrade reflects our assessment of gradually easing fiscal vulnerability,” Agost Benard, a Singapore-based analyst at Standard & Poor’s, said in the statement. “The rating action also reflects the country’s strengthening external position, with remittances and an expanding service export sector continuing to drive current- account surpluses.”
Emerging nations from Brazil to Indonesia have won credit- rating upgrades in the past year as governments contained budget deficits. A higher assessment for the Philippines will help Aquino as he moves to boost spending to a record this year and seeks $16 billion of investment in roads, bridges and airports to shield the economy from Europe’s sovereign-debt crisis.

Draghi, King May Delve Deeper Into Zero-Rate World Today (Source: Bloomberg)
The European Central Bank and the Bank of England may drive global monetary policy deeper into the world of zero interest rates and unorthodox methods today as they seek to stimulate their flagging economies. The ECB will take its benchmark interest rate below 1 percent for the first time, cutting it by a quarter percentage point to a record low of 0.75 percent, and reduce its deposit rate to zero, according to a Bloomberg News survey of economists. The Bank of England will raise its target for bond purchases by 50 billion pounds ($78 billion) to 375 billion pounds, another survey shows. The moves would push JPMorgan Chase & Co.’s average interest rate for developed economies to a crisis-era low of about 0.5 percent and add to the balance sheets of major central banks, which have already swelled 40 percent in five years of global financial turmoil. The jury is out on whether the monetary medicine will work or whether policy makers will be forced to deploy further measures.
“A big part of the world economy has become fairly stagnant and so central banks are in easing mode again,” said Joseph Lupton, a global economist at JPMorgan in New York. “We’re probably at the point of diminishing returns, but it can still be argued that it helps somewhat.”

King Succession Race for BOE Roiled as Libor Furor Rages (Source: Bloomberg)
Chancellor of the Exchequer George Osborne’s hunt for the next Bank of England governor got tougher as the Libor-rigging scandal cast a shadow over potential contenders for the job, including the top internal candidate. With Bob Diamond resigning as chief executive officer of Barclays Plc (BARC), the lender’s acknowledged falsifying of global interest rates means greater scrutiny of bankers and regulators hoping to succeed Mervyn King atop the U.K. central bank. Paul Tucker, one of King’s deputies and a front-runner to replace him, is being drawn into the Libor furor over his 2008 communications with Diamond. Other possible contenders whose prospects may be affected include John Varley, Diamond’s predecessor, and former HSBC Holdings Plc (HSBA) Chairman Stephen Green, who chaired the British Bankers Association at the time.
“It would make it very difficult to select somebody if they have been implicated in what amounts to wholesale Libor- fixing,” said Mark Garnier, a Conservative Party lawmaker who sits on Parliament’s Treasury Committee, the panel that Diamond testified to today in London.

Lagarde Consumed by Crisis Steers IMF Tough Love to EU (Source: Bloomberg)
Discussing climate change was a welcome break for Christine Lagarde from the European debt crisis that has consumed her first year as director of the International Monetary Fund. “I’m very pleased to be here today, not only because we’re not going to talk at all about the euro zone, not at all about Greece, not at all about Spain,” she said in a June 12 talk to the Center for Global Development in Washington, drawing laughs from her audience. Then Europe caught up with her, again. Four days after the event, Lagarde, 56, canceled plans to join leaders at a summit on sustainable development in Rio de Janeiro. Instead, she flew to Luxembourg to urge finance ministers of the 17 euro countries to take further steps to save their monetary union, which has already required almost 500 billion euros ($629 billion) in funds for indebted nations and their banks.
So it’s gone for the former French finance minister. Over the year, she has signed off on a second Greek bailout, called for European banks to be recapitalized and traveled from Brasilia to Beijing to obtain more lending resources as Europe’s turmoil threatens global growth.

Brazil Said to Plan Further Half-Point Rate Reductions (Source: Bloomberg)
Brazil plans to maintain the pace of interest rate reductions at half-point intervals as the economy recovers more slowly than expected and Europe’s debt crisis remains a concern, a government official familiar with the bank’s deliberations said. While the situation in Europe has stabilized in recent days, it and the U.S.’s fiscal situation are hurting the confidence of investors and consumers in Brazil, said the official, who spoke on condition of anonymity because he’s not authorized to discuss monetary policy. Brazilian industrial output fell for a third straight month in May, a report showed yesterday. Brazil’s central bank, which next decides rates on July 11, cut its benchmark Selic rate to a record low 8.5 percent in May. It was the fifth time in seven meetings that the central bank reduced borrowing costs by 50 basis points.
Policy makers said in a quarterly inflation report last week that any future monetary easing would be carried out with “parsimony,” repeating language used in previous statements that analysts said signals rate reductions of a half point. The yield on interest rate future contracts maturing in January 2014 rose four basis points to 7.86 percent at 2:44 p.m. local time. The real extended declines, falling as much as 0.9 percent to 2.0345 reais per dollar.

Euro Stays Lower Before German Factory Data, ECB Meeting (Source: Bloomberg)
The euro remained lower against most of its 16 major peers before German data forecast to show factory orders dropped, adding to signs Europe’s debt crisis curbed demand from the region. The European Central Bank will probably reduce borrowing costs at a policy meeting today to stimulate the euro-area’s flagging economy, according to a Bloomberg News poll. The pound maintained a three-day slide on speculation the Bank of England will extend its so-called quantitative easing program today. “The euro is under pressure and will stay under pressure,” said Derek Mumford, a director in Sydney at Rochford Capital, a currency risk management company. “Germany is a huge market and if that market does slow down, it can only undermine global growth and confidence going forward.”
The euro traded at 100.11 yen as of 9:22 a.m. in Tokyo after falling 0.5 percent to 100.07 yesterday. It was little changed at $1.2528 following a 0.6 percent decline. The dollar bought 79.91 yen from 79.88. The pound was at $1.5591 after retreating 0.8 percent in the past three days to $1.5589

Diamond Says Rivals Lowballed Libor, Blames Regulators (Source: Bloomberg)
Robert Diamond, who quit this week as chief executive officer of Barclays Plc (BARC), sought to blame other banks for misleading markets about their ability to borrow, and regulators for turning a blind eye. Ordered to testify to British lawmakers after Barclays agreed to pay a record 290-million pound ($455 million) fine for rigging the London interbank offered rate, Diamond said yesterday he was “disappointed” regulators failed to act on repeated warnings from Barclays that competitors had lowballed their submissions. Legislators challenged him on why he took so long to uncover his own firm’s attempts to manipulate the rate.
“This isn’t just Barclays,” Diamond, 60, told lawmakers at a three-hour hearing of Parliament’s Treasury Select Committee. “Throughout 2007 and 2008, no institution of the 16 banks reporting three-month dollar Libor was at the higher end more consistently than Barclays. Barclays was getting questions about why it was always high and we were saying, ‘We are high because we were reporting at where we were borrowing money.’” Diamond’s comments underscore concern that Libor, the benchmark for more than $360 trillion of global securities, has stopped being an accurate reflection of banks’ borrowing costs. Last week, regulators found Barclays had tried to manipulate the benchmark for profit and to mask its difficulty borrowing money during the credit crisis.

Australia Retail Sales Rise More Than Forecast; Dollar Jumps (Source: Bloomberg)
Australian retail sales advanced more than economists forecast in May on stronger spending at restaurants and department stores, sending the local dollar to a two-month high as traders pared bets on an interest-rate cut. Sales climbed 0.5 percent to A$21.3 billion ($22 billion) from a month earlier, when they rose a revised 0.1 percent, the fifth straight monthly gain, the Bureau of Statistics said in Sydney today. Sales in April were previously reported to have dropped 0.2 percent. The May result compares with economists’ forecast in a Bloomberg survey for a 0.2 percent gain. The longest stretch of retail sales increases since 2010 may encourage Reserve Bank of Australia Governor Glenn Stevens to extend this week’s rate pause after 75 basis points in reductions in May and June. Policy makers are trying to support confidence that has weakened among consumers who are saving, even as Australia recorded its best January-to-May period of hiring in five years.
Spending “was concentrated in the discretionary segment, adding to the overall strength of the report,” said Celeste Tay, a Singapore-based economist at 4cast Ltd. Excluding food retailing, which accounts for 40 percent of the total and fell for the first time this year, retail sales rose by “a more robust 0.9 percent month-on-month,” she said.

Fonterra Sales to China Threatened by New Zealand Ports: Freight (Source: Bloomberg)
New Zealand’s ports, the gateway for a quarter of the nation’s economy, have a potential threat to their future: Most container ships under construction are so big they’d run aground on arrival. Aging terminals from Auckland on the North Island to Otago in the south are struggling to keep pace with rivals along Australia’s east coast. Of New Zealand’s four busiest export hubs, only Port of Tauranga Ltd. is in the advanced stages of expanding for larger vessels, while others encounter regulatory delays and public opposition to their development. New Zealand needs to ensure that companies such as Fonterra Cooperative Group Ltd., the world’s biggest dairy exporter, can tap the growing demand for protein-rich diets in China and beyond. Already handicapped by the three weeks it takes a ship to get to Hong Kong, New Zealand’s shippers say a failure to act could cause the nation of 4.4 million people to cede ground to its larger neighbor in the race to supply Asian markets.
“We either keep getting small vessels and get less and less competitive as the fuel price eats away at the profit margins for the New Zealand exporter, or worse, we lose deep-sea vessels coming to New Zealand in favor of the carriers trans- shipping over to Australia,” said Chris Greenough, chief executive officer of Kotahi Logistics LP Ltd., Fonterra’s freight handler, in an interview.

20120705 1001 Global Commodities Related News.

Milk Rallying as New Zealand-to-U.S. Weather Sours: Commodities (Source: Bloomberg)
Goldman Sachs Group Inc. says this may be the first time in five years that New Zealand, the world’s biggest dairy exporter, produces less milk, at a time when surging corn prices are raising costs for U.S. farmers. The country’s output will drop 2.4 percent in the 12 months ending June 30 as the weather turns less favorable, according to Goldman’s New Zealand unit. Supply from the seven biggest exporting regions may gain 1.2 percent in the second half of 2012, slowing from 3.2 percent in the first six months, according to Rabobank International. Futures, which rose 19 percent since mid-April, will climb a further 16 percent to $20 per 100 pounds in Chicago by Dec. 31, said Shawn Hackett, the agricultural advisor who correctly predicted the rally in March.
Milk tumbled 33 percent in the eight months to April 18 as New Zealand’s production was boosted by abundant rain that gave cattle more to eat and U.S. yields reached a record after an unusually mild winter. Global food costs tracked by the United Nations fell 14 percent since reaching a record in February 2011. The worst Midwest drought in a decade is now parching corn crops, driving prices for the feed 33 percent higher since June 15 and increasing the incentive for farmers to cull herds. “Last year was a perfect weather scenario that happens once in a long, long, long while,” said Hackett, the president of Boynton Beach, Florida-based Hackett Financial Advisors Inc. who has specialized in agriculture for almost a decade. “Animals are going to be stressed. They’re not likely to produce as much milk as last year.”

Rubber Climbs to Five-Week High as U.S. Auto Sales Top Forecast (Source: Bloomberg)
Rubber advanced to the highest level in almost five weeks as U.S. factory orders and auto sales topped estimates, raising speculation demand will improve for the commodity used in tires. December-delivery rubber rose 2.2 percent to end at 256.6 yen a kilogram ($3,216 a metric ton), the highest settlement level for a most-active contract since May 31, on the Tokyo Commodity Exchange. That pared this year’s loss to 2.6 percent. Asian stocks climbed for a sixth day, with the regional benchmark heading for its longest winning streak this year, after data showed U.S. factory orders rose in May for the first time in three months. General Motors Co. (GM), Ford Motor Co. and Chrysler Group LLC reported U.S. auto sales for June that topped analysts’ estimates, helping the industry surpass projections and stay on pace for the best year since 2007.
“The better-than-expected figures underlined the strength of the U.S. auto industry, which is positive for rubber demand,” Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo, said today by phone. U.S. auto sales accelerated to a 14.1 million seasonally adjusted annualized rate, according to researcher Autodata Corp. The pace topped the 13.8 million light-vehicle rate that was the average estimate of 15 analysts surveyed by Bloomberg. Auto- industry sales provide a bright spot in the world’s largest economy that has been hindered by persistent unemployment and weakening consumer confidence.

Japan Reduces Spot LNG Purchases as Prices Soar to Near a Record (Source: Bloomberg)
Japan cut purchases of spot liquefied-natural-gas cargoes by 27 percent in May from a month earlier as prices soared to near a record amid the closing of domestic nuclear power plants. Supplies for immediate and short-term delivery from the Atlantic Ocean area dropped to 847,624 metric tons in May from 1.16 million tons in April, according to calculations by Bloomberg based on data from the Ministry of Finance. Prices of spot LNG climbed to about $920 a ton, or $18.93 per million British thermal units, 16 percent higher than last year’s average. The fuel reached a record $25 in 2008. Japan shut all 50 of its nuclear reactors for safety tests after last year’s earthquake and tsunami, halting atomic power generation for the first time in more than four decades. The country is restarting two units this month. Total LNG purchases in May rose 16.8 percent from a year earlier.
“Spot cargoes will start to moderate in the second half as Japan re-starts some of its nuclear facilities,” said Neil Beveridge, an analyst for Sanford C. Bernstein & Co., in Hong Kong in an e-mail on June 29. Prices of LNG delivered into Japan including spot and term supplies declined by 0.6 percent from April to 70,916 yen ($889) a ton in May, equivalent to about to $18.30 per million Btu, as oil prices declined, according to the data.

Oil Drops in New York on Speculation Europe’s Economy Weakening (Source: Bloomberg)
Oil fell in New York after data signaled a worsening economic slump in Europe, stoking speculation that fuel demand may shrink. Futures slipped as much as 1.3 percent from the settlement on July 3. A gauge of German services fell to 49.9 in June, London-based Markit Economics reported yesterday, with a figure below 50 indicating contraction. Factory orders in the country, the European Union’s largest economy, may have dropped 6 percent from a year ago, according to a Bloomberg News survey ahead of data released today. The EU accounted for 15.9 percent of global oil demand in 2011, according to BP Plc. (BP/) Oil for August delivery slid as much as $1.16 to $86.50 a barrel in electronic trading on the New York Mercantile Exchange and was at $86.76 at 9:21 a.m. Sydney time. Floor trading was closed yesterday for the U.S. Independence Day holiday and transactions since the July 3 close will be booked with today’s trades for settlement purposes. Prices are down 12 percent this year.
Brent oil for August settlement fell 91 cents, or 0.9 percent, to $99.77 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark’s premium to West Texas Intermediate closed at $12.11. U.S. crude stockpiles probably declined 2.3 million barrels last week, according to a Bloomberg survey before an Energy Department report today. Inventories may have dropped as Tropical Storm Debby delayed tanker arrivals and reduced output at Gulf of Mexico platforms, the respondents said.

S. Korea Agency Buying More Metals Than Planned as Prices (Source: Bloomberg)
South Korea, Asia’s third-biggest buyer of industrial metals, increased its 2012 spending plan for purchases by 9.4 percent as prices fell and domestic demand is forecast to climb, the head of a state agency said. The state-run Public Procurement Service, which manages strategic commodities, will spend 580 billion won ($510 million), up from an earlier estimate of 530 billion won and up 60 percent from last year, Kang Ho In, 54, said in an interview in Daejeon. The LMEX index of six metals including copper and aluminum has dropped 20 percent in the past year as Europe’s debt crisis and an economic slowdown in China, the biggest consumer, threatened to curb demand. South Korean demand may climb 7.5 percent to 3.2 million metric tons this year, the Korea Nonferrous Metal Association said March 30. “Our main goal is to ensure stable supply for small companies,” said Kang, a former deputy finance minister. “Global fundamentals point to further drops in metals prices.”

Gold Poised to Drop as ECB Seen Cutting Interest Rates (Source: Bloomberg)
Gold, trading near a two-week high, is poised to drop on speculation that the European Central Bank will cut interest rates to a record low today as policy makers take more action to spur growth and combat the debt crisis. Immediate-delivery gold was little changed at $1,614.43 an ounce at 8:13 a.m. in Singapore. Prices climbed $1,625.07 on July 3, the highest level since June 19. The August-delivery contract fell as much as 0.6 percent to $1,611.60 an ounce on the Comex in New York, and traded at $1,614.60. The ECB will probably reduce the benchmark rate 25 basis points to 0.75 percent, according to the median forecast in a Bloomberg survey of 62 economists. The Bank of England may raise its target for bond purchases today, boosting it 50 billion pounds ($78 billion) to 375 billion pounds, another survey shows.
“Expectations are for a cut in the interest rate,” Alexandra Knight, an economist at National Australia Bank Ltd., said by phone from Melbourne. That “could give a bit of support to gold. Inflationary pressures are likely to increase, if anything, if there’s further monetary-policy easing.”

Copper Drops From Seven-Week High on Signs of Slowing Economies (Source: Bloomberg)
Copper fell from a seven-week high in London as signs economies are slowing worldwide fed concern that demand may weaken. Euro-area services and manufacturing output contracted for a fifth month in June, an index from Markit Economics showed today. Retail sales in Europe slid from a year earlier in May, according to European Union statistics. The European Central Bank may lower its benchmark interest rate to a record 0.75 percent tomorrow, economists surveyed by Bloomberg said. “The market has been positioned very bearishly,” Gayle Berry, an analyst at Barclays Plc in London, said by phone. “We are not seeing any significant change in the short-term picture. The market is already expecting a cut tomorrow.”
Copper for three-month delivery declined 1.3 percent to $7,714 a metric ton by 4:03 p.m. on the London Metal Exchange. Prices yesterday touched $7,823, the highest level since May 15. Copper for September delivery fell 0.9 percent to $3.507 a pound on the Comex in New York, where floor trading is closed today for the Independence Day holiday. Price gains spurred sales of copper scrap, Herwig Schmidt, head of sales at Triland Metals Ltd. in London, said by phone.

Baltic Exchange Seeks to Double Asian Membership as Trade Shifts (Source: Bloomberg)
The Baltic Exchange, whose benchmarks for freight rates cover about 75 percent of global commodity cargoes, plans to double its Asian membership in the next two years to reflect a decade-long surge in trade to the region. Quentin Soanes, who starts as chairman today, wants 25 percent of the Baltic’s members to come from Asia by the end of his two-year term, from 10 percent to 15 percent now. The 268- year-old London bourse will convert its Singapore representative office into a full subsidiary that can collect fees and recruit new members, he said in an interview. Asia now accounts for about 63 percent of global seaborne imports of crude oil and dry bulk commodities such as iron ore and coal, from 45 percent in May 2002, according to London-based Clarkson Plc, the world’s largest shipbroker. Companies from BHP Billiton Ltd. (BHP) to Cargill Inc. are also expanding in Singapore, increasing the number of ships chartered there, Baltic Exchange Chief Executive Officer Jeremy Penn said in an interview.
“The Baltic has been perceived as a very London-centric organization,” said Soanes, 57, who retires July 31 as an executive director at Braemar Shipping Services Plc (BMS), the U.K.’s second-largest publicly traded shipbroker. “If we are going to be relevant to the world, Asia is where we’re going to have to do a lot more.”