Tuesday, August 14, 2012
Bollinger band reading : downside biased with possible pullback correction.
MACD Histogram : recovering, buyer seller battling.
Support : 2840, 2800, 2770, 2750 level.
Resistance : 2880, 2900, 2920, 2950 level.
FCPO closed lower again with declined volume transacted. Soy oil currently trading weaker after overnight closed lower while crude oil price currently trading higher.
Price traded lower following overnight news on U.S. Midwest rains sent grains related commodities lower. However, losses are limited as huge discount compare to rival soy oil may attract demand while trade awaits tomorrow exports data.
Daily chart reading adjusted to suggesting a downside biased development with possible pullback correction due to huge discount compare to soy oil factor and today hammer like candle plus market didn't close below 2840 support level before.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.
Posted by MW Chong at 6:25 PM
Bollinger band reading : little upside biased.
MACD Histogram : recovering, buyer in little advantage.
Support : 1650, 1640, 1630, 1623 level.
Resistance : 1660, 1670, 1680, 1690 level.
FKLI closed recorded gain for the 4th day with quiet volume traded doing about 1.5 point discount compare to cash market that closed higher. Overnight U.S. markets closed little lower and today Asia markets ended on higher ground while European markets currently having positive development.
Asia and Europe markets traded higher after Germany reported slower than forecast GDP growth, hope on Bank of Japan stimulus measure while investors awaits tonight U.S. retail report.
Daily chart study adjuested to suggesting a little upside biased market development with MACD started to having positive crossed up.
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.
Posted by MW Chong at 5:34 PM
DJIA chart reading : upside biased.
Hang Seng chart reading : upside biased.
KLCI chart reading : little upside biased with possible pullback correction.
Posted by MW Chong at 5:03 PM
GLOBAL MARKETS: Asian shares rose as investors hunted for bargains while waiting for more economic figures from Europe and the United States later in the day, after recent data showed the euro zone's debt woes were eroding business activity globally. European stock index futures pointed to a higher open on expectations that a slew of economic releases in Europe and the United States later in the day might strengthen the case for more monetary stimulus to tackle a slowdown in global growth. U.S. stocks ended slightly lower on Monday as fatigue set in after a six-day rally and disappointing Japanese growth data provided a fresh reminder of the headwinds facing the global economy. (Reuters)
FOREX: The euro pushed higher, extending some of the previous session's gains in Asian trade, as the market cautiously tested the upside ahead of euro zone and U.S. economic data.(Reuters)
FOREX-Euro pushes higher ahead of euro zone GDP data
TOKYO, Aug 14 (Reuters) - The euro pushed higher on Tuesday, extending some of the previous session's gains in Asian trade, as the market cautiously tested the upside ahead of euro zone and U.S. economic data.
"Low liquidity in the summer could mean that market moves are small, or it could amplify moves," said Kimihiko Tomita, head of foreign exchange for State Street Global Markets in Tokyo.
Euro zone output expected to shrink in Q2(Reuters)
Euro zone output is seen declining in the second quarter when the European Union releases data on Tuesday, as the debt crisis hurts confidence, making businesses reluctant to invest and consumers worried about spending.
German economy grows 0.3 pct in second quarter (Reuters)
German gross domestic product grew 0.3 percent in the second quarter, seasonally-adjusted data showed on Tuesday, slightly beating expectations on the back of solid exports and consumption.
Petrobras makes big oil find in Brazil's sub-salt-partner(Reuters)
Brazil's Petrobras has made "one of the most significant oil discoveries" in the country's offshore sub-salt area, a partner in the discovery said, raising expectations the state-led oil company has made another giant find in a hot exploration region.
GRAINS: Chicago new-crop soybeans were little changed after previous session's losses as an improved weather outlook for the U.S. Midwest weighed on prices, while corn rose half a percent on supply worries. (Reuters)
U.S. soybean health improves with rain-USDA(Reuters)
The condition of the U.S. soybean crop improved last week, helped by recent rains that may boost harvest prospects for a crop that struggled through much of the summer due to the worst drought in five decades.
OIL: Brent futures held steady above $113 as investors awaited GDP data out of two of Europe's powerhouse economies to gauge the region's energy demand outlook, while tensions in the Middle East supported prices. (Reuters)
COLUMN-Iron ore curve flattening shows turning point nearer
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--
LAUNCESTON, Australia, Aug 14 (Reuters) - Iron ore spot prices are likely to fall further in the short term, but are getting closer to a turning point if previous trends in the swaps curve are repeated.
The Singapore-traded iron ore swaps curve has been flattening recently, with the six-month contract currently 3.17 percent below the front-month's $114 a tonne.
METALS-LME copper eases ahead of U.S., Europe data
SHANGHAI, Aug 14 (Reuters) - London copper edged down to a 1-1/2-week low on Tuesday, weighed by poor physical demand and disappointment at the lack of economic stimulus measures by China, the United States and Europe despite a bleaker global outlook.
"Shanghai equities fell from mid-morning, dampening sentiment, especially because there are no sign of those stimulus measures many investors have been hoping for," said CIFCO Futures analyst Zhou Jie.
BASE METALS: London copper ticked up after four straight sessions of losses, although prices are expected to stay within tight ranges ahead of data from Europe and the United States that will be scoured for clues on the health of the global economy.(Reuters)
PRECIOUS METALS: Gold inched up, after dropping in the previous session, as investors waited to see if data from Europe and the United States would indicate more weakness in the global economy and prompt central banks to take stimulus measures(Reuters)
PRECIOUS-Gold ekes out gains before U.S., euro zone data
SINGAPORE, Aug 14 (Reuters) - Gold inched up on Tuesday, after dropping in the previous session, as investors waited to see if data from Europe and the United States would indicate more weakness in the global economy and prompt central banks to take stimulus measures.
"Gold is likely to remain in the range of $1,600 and $1,630 an ounce while people wait for central bank actions," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong, adding that buying interest from Shanghai ebbed after prices failed to push through the $1,625 level over the past two days.
Posted by MW Chong at 5:00 PM
GLOBAL MARKETS-Shares steady in ranges before US, euro zone data
TOKYO, Aug 14 (Reuters) - Asian shares steadied on Tuesday with investors staying sidelined ahead of more figures from Europe and the United States later in the day, after recent data showed the euro zone's debt woes were eroding business activity
"One important channel by which news on GDP affects financial markets is its effect on policy. In the euro zone, where broad-based weakness of growth means that the ECB could easily justify further measures now if it so wished, we expect monetary policy to be loosened further in the months ahead," Barclays Capital said in a research note.
COMMODITIES-Grains lead retreat as growth worries revive
NEW YORK, Aug 13 (Reuters) - Pumped up grain prices led a broad retreat in commodity markets on Monday as downbeat economic signals from Japan and China weighed on riskier markets.
"There seems to be a general tone of weakness across a number of markets due to some weaker economic data, in particular the disappointing Chinese data," said Gayle Berry, an analyst at Barclays Capital.
OIL-Brent up on supply worry, economic concerns check gain
NEW YORK, Aug 13 (Reuters) - Brent crude prices rose on Monday in choppy trade, hitting a three-month peak on concerns about North Sea supply and Middle East tensions, while fears about a slowing global economy checked gains.
"The likelihood of some sort of intervention to stimulate economies is supporting the market," said Christopher Bellew, an oil broker at Jefferies Bache in London. "Also the North Sea, Iran and the Middle East are still a factor."
POLL-US crude stocks seen down on lower imports
Aug 13 (Reuters) - U.S. crude oil stockpiles were forecast to have declined last week for a third straight week, on lower imports, a preliminary Reuters poll showed on Monday ahead of industry and government data due this week.
Crude inventories were projected to have fallen by 1.6 million barrels in the week to Aug. 10, according to the survey of seven analysts. All of them expected a drawdown.ž
Russia says new U.S. sanctions on Iran could affect ties
MOSCOW, Aug 13 (Reuters) - Russia sharply criticised new U.S. sanctions against Iran on Monday, saying the measures to punish banks, insurance companies and shippers that help Iran sell its oil would harm Moscow's ties with Washington if Russian firms are affected.
Russia, which has long opposed sanctions beyond those approved by the U.N. Security Council to pressure Tehran over its nuclear programme, called the measures "overt blackmail" and a "crude contradiction of international law."
NATURAL GAS-US natgas futures end down on weather, hold key support
NEW YORK, Aug 13 (Reuters) - U.S. natural gas futures ended lower on Monday for the third time in four sessions, pressured by milder weather forecasts this week, but technical traders noted the front contract held above key chart support.
"I think we're in a neutral to negative market. We were looking at $2.71 as a decision point, but now I think it will take a close below $2.64 to give the market a more bearish tone," said Dean Rogers, analyst at Kase & Co in New Mexico.
EURO COAL-Prices creep 25 cents higher with oil, gas
LONDON, Aug 13 (Reuters) - Physical prompt South African coal prices rose marginally by around 25 cents to $91.25 a tonne on Monday, in line with oil's rally to its highest level since May and stronger gas prices.
"With the railway out of operation, coal exports have ceased and inventory at the mine loadout facility has reached full capacity," Drummond said.
New Zealand: Retail sales jump 1.3% on vehicle purchases
New Zealand’s retail sales rose last quarter by almost twice the pace economists predicted, as a record jump in motor vehicle purchases helped sustain the economy’s recovery from earthquakes in the past two years. Sales, adjusted for inflation, gained 1.3% in the three months through June from the first quarter, when they fell 0.6%, Statistics New Zealand said in Wellington today. The median estimate in a Bloomberg News survey of nine economists was for a 0.7% increase. (Bloomberg)
G20: Plans response to rising global food prices, FT reports
The G20 countries will try and co-ordinate a response to surging food prices after droughts wilted crops in the world’s top farm exporter, the Financial Times said, citing unidentified officials. Officials plan to hold a conference call in the week of 27 Aug to discuss a meeting which could be held in late September or early October, according to representatives familiar with the conversations. (Bloomberg)
Greece: Recession making bailout targets harder to meet
Greece’s economy contracted for a ninth straight quarter, making it harder for the government to meet the budget-reduction targets required under the country’s international bailouts. GDP declined 6.2% in the second quarter from the same period last year after dropping 6.5% in the first, the Athens-based Hellenic Statistical Authority said in an e-mailed statement yesterday. The median estimate of three economists in a Bloomberg News survey was for a contraction of 7%. The authority doesn’t publish seasonally adjusted data or quarter-on-quarter rates. (Bloomberg)
UK: Home-price index falls to lowest in a year as sales decline
A UK house-price index dropped to the lowest in a year as property transactions fell for a fourth month, the Royal Institution of Chartered Surveyors said. The price gauge fell to -24 from -22 in June, London-based RICS said in a report yesterday, citing a monthly poll of property surveyors. A reading below zero means more surveyors saw price drops than gains last month. Measures of newly agreed sales dropped to a four-year low. The property market is under pressure as banks curtailing access to finance and the continuing recession deter prospective buyers. The Bank of England started a program this month to boost the flow of credit as it continued its bond-purchase program aimed at sparking a recovery. (Bloomberg)
1MDB to pay Genting RM2.3bn for power assets
Genting, the country's top gaming company, is proposing to sell off its power business to 1Malaysia Development (1MDB) for RM2.3bn, the company said in a statement to the stock exchange yesterday. Genting and its indirect wholly-owned subsidiaries, Genting Power Holdings Ltd and Genting Power (M) Ltd, entered into conditional share sale and purchase agreements with Asia Trade Investment Ltd, Ong Tiong Soon @ Wang Chang Chuen and 1MDB for the disposal of their respective shareholding interests in Mastika Lagenda SB. (BT)
Sime Darby gets China's nod for trading business
Sime Darby has received the Chinese government's approval to set up the Hangzhou Sime Darby Trading Company Ltd to trade in vehicle parts and lubricating oil. It said, on Monday, that the RM2.99m registered capital of trading company would be held by its indirectly 60%-owned subsidiary Shanghai Sime Darby Motor Commerce Company Ltd. The company will be involved in the trading, wholesale and retail import and export of vehicle parts and accessories, lubricating oil, hardware tools, and electrical equipment parts. (StarBiz)
Media Prima plans RM100m to RM120m capex per year over three yrs
Media Prima has allocated RM100m to RM120m as capital expenditure (capex) per annum for the next three years, according to RAM Rating Services. It said on Monday the capex was to continue replacing its broadcasting and transmission equipment in progress to be digital-TV ready. "This is anticipated to be funded via internal cash, without requiring debt funding. As such, the group's balance sheet is expected to stay sturdy," it said. RAM Ratings reaffirmed the AAA(bg) rating of Media Prima's RM170m bank-guaranteed medium-term notes programme (2007/2012) (BG MTN), with a stable outlook. (StarBiz)
Germany's Seeburger makes KL its Asean regional HQ
Germany's business integration and managed file transfer solutions provider Seeburger is setting up its Asean regional headquarters in Malaysia to drive its strategic expansion into the region. Malaysia was chosen as its Asean hub due to lower operational costs, central geographic location, local information, its communication technology market's maturity and local potential. With the Kuala Lumpur headquarters, the move will facilitate its regional partners in sales support and technical implementation. Seeburger's partners in Malaysia, Time Engineering and Datamation (M) SB, will concentrate on providing its business integration suite. (StarBiz)
SP Setia proposes placement
Property developer SP Setia has proposed a placement of up to 15% of the issued and paid-up share capital of the company, to investors via a book-building exercise. The placement is expected to raise at least RM957.4m, assuming an issue price of RM3.19, and will be used for the acquisition and initial development cost of the Battersea Power Station project in London as well as working capital for ongoing projects. SP Setia also proposed to terminate its existing employees' share option scheme (ESOS), to be replaced by a new ESOS of up to 15% of its issued and paid-up share capital. (Financial Daily)
Malakoff begins Tanjung Bin power plant expansion in Johor
Malakoff Corp has commenced the operation of the Tanjung Bin Power Plant in Johor, which will become South East Asia’s largest coal-fired power plan upon completion in 2016. The plant is also expected to create a multiplier effect for development in Johor's Iskandar region. The first concrete pouring ceremony of its new 1000MW coal-fired power plant was held yesterday, the independent power producer said in a press statement. The project was awarded to Malakoff in June last year, and will ramp up Tanjung Bin's current generating capacity of 2,100MW. (Malaysian Reserve)
Asia FX By Cornelius Luca - Mon 13 Aug 2012 16:50:14 CT (Source:CME/www.lucafxta.com)
The appetite for risk was mixed on Monday amid ongoing concern about the global slowdown. The euro and franc benefited from a decent auction of Italian debt, but the other foreign currencies were hurt by worries about the slowdown of the Chinese and Japanese economies. The US stock indexes, oil and gold slipped. The short-term outlook for the European and commodity currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short only the yen. Good luck!
Asian Stocks Advance on BOJ Minutes, Before U.S. Data (Source:Bloomberg)
Asian stocks rose as Bank of Japan minutes showed policy makers weren’t ruling out any options to boost the economy, and before U.S. retail sales data expected to signal recovering demand in the world’s largest economy. Honda Motor Co. (7267), which depends on North America for more than 40 percent of its sales, climbed 0.7 percent in Tokyo. MTR Corp. may be active today in Hong Kong after the subway operator said first-half profit fell on lower earnings from its real estate business. Singapore Telecommunications Ltd., Southeast Asia’s biggest phone company, may drop after it missed earnings estimates. The MSCI Asia Pacific Index (MXAP) rose 0.2 percent to 120.41 as of 9:45 a.m. in Tokyo. Almost three stocks climbed for each that fell before the open of markets in Hong Kong, Singapore and China.
Asia’s benchmark gauge fell 6.9 percent from this year’s high on Feb. 29 through yesterday amid concern earnings would be hurt by Europe’s debt crisis and slower growth in China. The index traded at 12.4 times estimated earnings compared with 13.6 times for the Standard & Poor’s 500 Index and 11.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Japanese Stocks Advance on U.S. Retail Expectations, BOJ (Source:Bloomberg)
Japanese stocks rose, with the Nikkei 225 Stock Average (NKY) rising the first time in three days, as minutes from the Bank of Japan showed policymakers weren’t ruling out any options to boost the economy and on expectations U.S. retail sales rose in July. Makita Corp. (6586), a maker of power tools that gets more than 40 percent of its sales in Europe, climbed 1.5 percent after the yen weakened. Nissan Motor Co. (7201), a carmaker that gets almost a third of its revenue from North America, rose 1 percent. Nippon Yusen K.K., Japan’s largest shipping line by sales, slid 1.7 percent after a key gauge of cargo rates fell to the lowest since March 1. The Nikkei 225 Stock Average rose 0.9 percent to 8,964.38 as of 10:09 a.m. in Tokyo. Volume was 20 percent below the 30- day average with many companies closed for the O-bon holiday this week. The broader Topix (TPX) Index added 0.8 percent to 752.52 today, with about three times as many shares advancing as falling.
“Situations overseas and currency movements are calming down, fueling confidence to buy shares,” said Ryuta Otsuka, a strategist at Toyo Securities Co. in Tokyo. “Trading is light during the O-bon holiday and investors are searching for companies that have catalysts to buy shares.” The Topix has fallen 14 percent from this year’s peak on March 27 as growth slows in the U.S. and China and on concern Europe’s debt crisis is spreading. The decline has cut the price of shares on the gauge to 0.9 times book value, compared with 2.2 times for the Standard & Poor’s 500 Index and 1.5 times for the Europe Stoxx 600 Index. A number less than one means that companies can be bought for less than value of their assets.
European Stocks Fall as Japanese Growth Wanes; Baer Drops (Source:Bloomberg)
European stocks retreated, after 10 weeks of gains for the Stoxx Europe 600 Index, as slowing economic growth in Japan offset increased demand at an Italian debt auction. Julius Baer Group Ltd. lost 7.4 percent after agreeing to buy Bank of America Corp.’s Merrill Lynch wealth management business outside the U.S. Petrofac (PFC) Ltd. fell 5.2 percent as the oil and gas engineer said profit growth will slow. Unicredit SpA and Intesa (ISP) Sanpaolo SpA advanced after Italy sold 8 billion euros ($9.9 billion) of debt. The Stoxx 600 fell 0.4 percent to 268.72 at the close of trade after climbing as much as 0.1 percent earlier. The volume of shares changing hands in companies listed on the gauge was 40 percent below the average of the last 30 days, data compiled by Bloomberg show.
“We remain cautious on European equities in the short term,” Yu-chieh Chiang and Edmund Shing, strategists at Barclays Plc in London, wrote in a report to clients. “The rally needs something more to extend. Macro lead indicators have not turned around decisively.” National benchmark indexes fell in 14 of the 18 western European markets today. The U.K.’s FTSE 100 dropped 0.3 percent, while Germany’s DAX declined 0.5 percent and France’s CAC 40 retreated 0.3 percent. Italy’s FTSE MIB Index reversed earlier gains, losing 0.1 percent.
Emerging Stocks Fall Most in Week on China, Europe Woes (Source:Bloomberg)
Emerging-market stocks dropped the most since Aug. 2 after Bank of America Corp. cut its forecast for Chinese economic growth. The MSCI Emerging Markets Index (VXEEM) sank for a second day, losing 0.7 percent to 972.59. Brazil’s Bovespa stock index dropped with mining company MMX Mineracao e Metalicos SA and homebuilder Cyrela Brazil Realty SA Empreendimentos e Participacoes (CYRE3) among the worst performers. The Shanghai Composite Index lost 1.5 percent, the most in four weeks. Israel’s shekel fell to a two-week low amid concern the nation is considering a strike against Iran. Bank of America joined Deutsche Bank AG and Barclays Plc in cutting growth forecasts for China, the biggest developing economy, on weaker exports. Israel’s Home Front Command this week will test its nationwide text-message system to alert the public of danger, the military said yesterday, as concerns rise about a confrontation with Iran, the third-largest producer in the Organization of Petroleum Exporting Countries.
“At a time like this when trading levels are generally low, the markets are a lot more volatile when a headline number emerges,” Robert Abad, who helps oversee $41 billion in emerging-market assets at Western Asset Management Co., said in a phone interview from Pasadena, California. “The GDP forecast cut doesn’t necessarily mean a hard landing for markets as emerging markets have a lot more ammunition in terms of stimulus measures.”
S&P 500 Snaps Six-Day Winning Streak as Growth Slows (Source:Bloomberg)
The Standard & Poor’s 500 Index fell for the first time in seven days, ending the longest streak of gains in 20 months, as slower-than-forecast economic growth in Japan added to investor concern of a global slowdown. Commodity shares led declines among 10 groups in the S&P 500 as Bank of America Corp. cut its outlook for Chinese growth. Alcoa Inc. and Cisco Systems Inc. fell the most in the Dow Jones Industrial Average as investors sold stocks most tied to the economy. TripAdvisor Inc. (TRIP) lost 4.5 percent after Google Inc. agreed to acquire all of John Wiley & Sons Inc.’s travel assets.
The S&P 500 slid 0.1 percent to 1,404.11 at 4 p.m. in New York. The Dow lost 0.3 percent to 13,169.43. Trading volume for exchange-listed stocks in the U.S. was about 4.5 billion shares, the lowest level since July 3 when the market closed at 1 p.m. and about 31 percent lower than the three-month average, according to data compiled by Bloomberg. The Chicago Board Options Exchange Volatility Index, known as the VIX, fell 7.1 percent to 13.70, the lowest level since 2007. “There are some worries that while we’re all focused on Europe, China could actually be one of the reasons why GDP disappoints and that is a negative,” Jeffrey Kleintop, chief market strategist at LPL Financial Corp. in Boston, which oversees $350 billion, said in a telephone interview. “The GDP data from Japan reminds us of a risk of a hard landing in China.”
Convertibles Redeemed as Dollar Costs at Year Low: India Credit (Source:Bloomberg)
The lowest Indian dollar borrowing costs in a year will help as companies from Tata Steel Ltd. (TATA) to Jaiprakash Associates Ltd. (JPA) refinance $1.2 billion of convertible debt due this quarter. The extra yield investors demand to buy dollar-denominated Indian bonds over U.S. Treasuries fell to 448 basis points on Aug. 10, the lowest since August 2011, HSBC Holdings Plc indexes show. That’s higher than the 335 basis points for Chinese notes and 289 for Indonesian issuers. Suzlon Energy Ltd. (SUEL), JSW Steel Ltd. (JSTL) and Rolta India Ltd. (RLTA) all used bank loans to redeem $887 million of debt in the past six weeks. Indian companies sold $1.75 billion of dollar bonds this quarter, almost 13 times the preceding three months’ issuance, as global central banks ensure ample cash supply to counter slowing economic growth.
Companies defaulted on $315 million of debt this year after the 22 percent slump in the benchmark Sensitive Index from its peak in November 2010 pushed shares below levels at which the notes could be converted to equity. “It’s a better environment for companies to borrow overseas because global rates are at record lows and there’s comfortable liquidity around the world,” Raj Kothari, a London- based fixed-income trader at Sun Global Investment Ltd. said in an Aug. 10 telephone interview. “Refinancing is the only option for companies to repay this convertible debt.”
Yen Drops on BOJ Stimulus Signs, Asian Stock Gains (Source:Bloomberg)
The yen weakened versus all 16 major counterparts as Asian shares rallied and minutes of the Bank of Japan (8301)’s last meeting signaled policy members are considering ways to expand stimulus. Japan’s currency remained lower against the dollar and euro as stock gains curbed demand for haven assets. The euro halted its biggest gain in more than a week versus the greenback before reports forecast to show the euro-area economy contracted in the second quarter as French gross domestic product shrank and Germany’s expansion slowed. New Zealand’s dollar strengthened after a government report showed retail sales increased more than economists forecast.
“There’s going to be no change to the BOJ’s stance so long as they’re short of their inflation goal,” Sacha Tihanyi, a Hong Kong-based senior currency strategist at Scotiabank, a unit of Bank of Nova Scotia (BNS), said in reference to the central bank’s 1 percent target. Sentiment today “is looking a little bit better, so I think that’s pretty much consistent with a little bit of softening in the yen.” The yen lost 0.1 percent to 78.38 per dollar as of 9:53 a.m. in Tokyo. It fell 0.1 percent to 96.70 per euro. The 17- nation currency was at $1.2340 after rising 0.4 percent yesterday, the most since Aug. 3. The New Zealand dollar gained 0.2 percent to 81.06 U.S. cents.
FOREX-Euro steady but vulnerable to selling on rallies
LONDON, Aug 13 (Reuters) - The euro held steady, helped by the prospect of European Central Bank action to tackle the debt crisis, though it was seen vulnerable to selling on rallies and signs of disagreement among euro zone politicians.
"There is no coherent message between politicians and policymakers," said Jeremy Stretch, head of currency strategy at CIBC, adding that the euro's failure to break above $1.2450 would leave traders inclined to sell it on rallies.
Currency Flows Reversing China to Colombia as Trade Slows (Source:Bloomberg)
Just three months after the biggest developing economies sold dollars to support their currencies, policy makers from Colombia to China are moving to weaken exchange rates and revive exports as the International Monetary Fund forecasts the slowest trade growth in three years. Colombian Finance Minister Juan Carlos Echeverry urged the central bank on Aug. 3 to boost minimum dollar purchases from $20 million a day, saying the country needs “more ammunition” to drive down the peso in the global “currency war.” The Philippines banned foreign funds from deposit accounts and unexpectedly cut interest rates in July as the peso hit a four- year high. In China, authorities lowered the yuan reference rate to the weakest since November, which according to Citigroup Inc. will create “headwinds” for other Asian currencies.
After spending more than $59 billion in foreign reserves in May and June to stem currency depreciation, developing nations are reversing policies as the European debt crisis outweighs the risk of faster inflation. South Korea and Chile may weaken exchange rates to make their exports cheaper, according to UBS AG. The IMF estimates global trade will expand at the slowest pace since 2009. “Policy makers will become more aggressive,” said Bhanu Baweja, a London-based strategist at UBS. “The currency strengthening is in contrast with the state of the economy. That argues for much weaker foreign-exchange rates.”
Hedge Funds Capitulate on European Shorts (Source:Bloomberg)
Hedge funds that base investment decisions on economic trends are unwinding bets against European stocks (SXXP) at the fastest pace in three years, speculating policy makers will step up the fight against the debt crisis. The degree by which macro funds are trailing the Euro Stoxx 50 Index (SX5E) is narrowing at the fastest rate since 2009, a sign managers are covering short sales by buying shares, according to data compiled by Bloomberg and JPMorgan Chase & Co. The proportion of shares on loan in the Stoxx Europe 600 Index, an indication of short interest, has fallen to 2.9 percent from 3.4 percent in May, data from London-based Markit show. Bulls say professional investors buying back shares that were borrowed and sold short are fueling a rally led by European Central Bank President Mario Draghi’s pledge to defend the euro. The Euro Stoxx 50 is up more than 12 percent in three weeks, twice the gain of the MSCI All-Country World Index (MXWD), even as the euro-area economy is forecast to slide into recession.
Bears point to a drop in earnings estimates after profit fell about 10 percent last quarter as a sign stocks in Europe may fall. “Macro hedge funds missed collectively the policy news of June, and with the prospect of central bank interventions they are now capitulating,” Nikolaos Panigirtzoglou, head of global asset allocation at JPMorgan in London, said in an Aug. 7 phone interview. JPMorgan has $2.3 trillion under management. “For positions to unwind, a trigger is needed. And the trigger was all this policy news.”
Faber Pessimistic on China, Favors European Stocks: Tom Keene (Source:Bloomberg)
China’s economy will slow “considerably,” said Marc Faber, the publisher of the Gloom Boom & Doom report, who is buying European stocks. “The growth rate we had in the last 10 years, which was around 10 percent annually, is going to slow down considerably,” Faber told Tom Keene and Ken Prewitt in a “Bloomberg Surveillance” radio interview today. “I would rather wait to buy Chinese stocks until we see the result of the stimulus packages.” The Shanghai Composite Index has tumbled 13 percent from this year’s high reached March 2 on concern the economic slowdown is deepening. The gauge fell 1.5 percent today after Bank of America Corp. joined Deutsche Bank AG and Barclays Plc in cutting growth forecasts for China on weaker exports. Faber is buying European stocks as declines related to concern the euro may break up create opportunities for investors. “For the first time in my life, I’ve started to buy some European stocks, and I will buy more over time,” Faber said. “Equities have become inexpensive.”
Homebuilder Stocks Surge With New Sales 50% Below Average (Source:Bloomberg)
U.S. homebuilder shares are appreciating at a record rate this year, reflecting confidence the housing rebound from a six-year slump can accelerate with new-home sales still 50 percent below the 40-year average. The Standard & Poor’s Supercomposite Homebuilder Index of 11 companies has climbed 53 percent this year through Aug. 10, compared with a 12 percent gain for the broader S&P 500 Index. (SPX) Builders, including PulteGroup Inc. (PHM) and D.R. Horton Inc. (DHI), are raising prices in markets with limited inventory and targeting move-up buyers with more money for down payments and better access to credit than first-time purchasers. “We’re getting more activity, more traffic and even pricing has begun to improve,” said Jason Benowitz, portfolio manager for Roosevelt Investments in New York, which holds an almost 2 percent stake in Lennar Corp. (LEN) “If the economy can muddle along, then we think housing will continue to be a bright spot. And the homebuilder stocks have room to run from here.”
Shares rallied as new homes sold at a seasonally adjusted annual rate of 350,000 in June, about half the 40-year average, according to Commerce Department data. That’s still an improvement over 304,000 in June 2011 -- enough to help engender a big rebound for homebuilders, which underperformed the S&P 500 from 2005 through 2011.
Refinance Rebuilds U.S. Savings as Growth Delayed: Economy (Source:Bloomberg)
Americans’ drive to rebuild savings and pay down debt may mean the gains from the current mini boom in mortgage refinancing will accrue over years rather than have a more immediate effect on the U.S. economy. Aided by record-low interest rates and an expansion of government programs, the value of home loans refinanced this year will rise to $932 billion from $858 billion in 2011, according to projections from the Mortgage Bankers Association. The group’s gauge tracking the volume of credit being reworked climbed at the end of July to the highest level in three years. The typical borrower redoing a $200,000 mortgage last quarter will save about $2,900 in interest over the next year, according to figures from Freddie Mac. Nonetheless, the extra cash may not be spent soon as households continue to focus on repairing finances.
“The initial benefit is not as significant as the large dollar-savings figures would seem to indicate,” said Mark Vitner, senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, a subsidiary of the largest U.S. mortgage lender. “It does provide a benefit to the economy, but that benefit actually grows over time.”
Japan’s Executives Swelter in Solidarity to Save Power (Source:Bloomberg)
The 32-degree Celsius (90-degree Fahrenheit) heat outside Honda Motor Co. (7267)’s office prompts health warnings from the national weather agency. Inside in an executive meeting room, it’s only four degrees cooler as President Takanobu Ito swelters. “We are already used to being in this warm office,” Ito said, gesturing with his short-sleeved arms as a spokesman stirs the air with a paper fan. “We hope visitors understand the heat is part of our effort to save energy.” The 28 degree Celsius atmosphere in Honda’s 17-story Tokyo tower is now standard in offices participating in the government-led “Cool Biz” campaign to cut air-conditioning power use. Executive suites including Ito’s are no exception in a practice that has also become an expression of solidarity after last year’s nuclear power-plant disaster cost the country nearly its entire supply of atomic energy.
Cool Biz and conservation steps including a switch to light-emitting diode lamps have helped Japan cut energy use more than three times faster than the Organization for Economic Co- operation and Development country average. In the six years since the campaign began, primary energy use has dropped 9.4 percent in Japan, compared with the 2.5 percent average decline for OECD countries, according to Bloomberg calculations using data from the BP Statistical Review of World Energy.
Japan Post-Quake Rebound Wanes as Spending Nears Stall: Economy (Source:Bloomberg)
Japan’s reconstruction-fueled rebound waned in the second quarter as consumer spending growth almost stalled and export gains diminished, increasing the chance for monetary and fiscal stimulus. Gross domestic product advanced an annualized 1.4 percent in the three months through June, less than the median estimate of 2.3 percent in a Bloomberg News survey of economists and down from 5.5 percent the previous quarter, a Cabinet Office report showed in Tokyo today. Unadjusted for prices, GDP contracted at a 0.6 percent annual pace. Consumption rose the least since households cut spending in the immediate aftermath of the March 2011 earthquake, signaling a fading boost from government incentives that have supported domestic demand. With yen strength and Europe’s crisis curbing exports, today’s report escalates pressure on policy makers to head off a deeper slowdown in the world’s third-largest economy.
“Drafting a supplementary budget is already a done deal, as the Japanese economy can anticipate little support from overseas demand and the government has no other choice but to mobilize fiscal spending,” said Hiroshi Watanabe, a senior economist at SMBC Nikko Securities Inc. in Tokyo. “Political pressure on the Bank of Japan (8301) will probably intensify as deflation is expected to remain entrenched, just as today’s GDP deflator indicates.”
Philippines Agency Plans to Sell Mining Assets: Southeast Asia (Source:Bloomberg)
The Philippines will sell stakes in mining holdings as President Benigno Aquino seeks to nudge forward efforts to boost investment after two years in office. The government will auction stakes in four nickel, copper and gold mines, as well as shares in Semirara Mining Corp. (SCC), said Karen Singson, executive director of the Privatization and Management Office, one of several state agencies managing asset sales. She declined to give the potential value of the disposals. “We’re lining up the projects we plan to privatize in the near- and medium-term,” Singson, 33, said in an interview in her office in Manila yesterday. “There are more foreign investors talking to us because of improvements in governance and transparency.”
Aquino has struggled to accelerate asset sales and bidding of infrastructure projects, with the government awarding just one project under its private-partnership program since he took office in 2010. The momentum may be aided by rising investor confidence after credit rating upgrades from Standard & Poor’s and Fitch Ratings, as the nation takes steps to reduce corruption and contain the budget deficit.
Indonesian Bonds Go From Region’s Worst to Best: Southeast Asia (Source:Bloomberg)
Indonesian bonds have gone from the worst to best performers in Asia this quarter as a more stable rupiah lured funds such as HSBC Global Asset Management and Pioneer Investments to Southeast Asia’s highest yields. Local-currency notes have gained 4.1 percent since June 30 after being the only debt from the 10 major Asian emerging markets to post a negative return in the second quarter, according to an HSBC Holdings Plc index. Their average yield of 6.2 percent is the highest in Southeast Asia and compares with 5.2 percent in the Philippines and 3.5 percent in Malaysia. The rupiah weakened 2.8 percent against the dollar in the second quarter as Indonesia posted trade deficits in each of the three months, the first shortfall since July 2010. Since then, the currency has lost just 0.8 percent and foreign funds have added 13.7 trillion rupiah ($1.4 billion) to their debt holdings, finance ministry data show.
The more stable rupiah is helping to revive interest in the country’s notes, said Gordon Rodrigues, investment director at HSBC Global in Hong Kong. “We are cautiously positive on Indonesia,” Rodrigues, who helps oversee $32 billion of Asian fixed-income assets, said in an interview on Aug. 7. “In a more stable environment for bonds, being underweight for a long period of time on Indonesia, which is a relatively high-yielding country, tends to hurt you.”
Merkel Handed Sub-Zero Yields as ECB Plan Gains Traction (Source:Bloomberg)
Stuart Thomson knew what to do last month as Spanish yields rose to records: Sell German bunds. “There is no way that Germany will not be affected by this,” Thomson, who helps oversee $109 billion as a money manager at Ignis Asset Management in Glasgow, Scotland, said in an Aug. 3 interview. “Spain won’t be able to survive without external help. The bailout will add more burdens on Germany.” Chancellor Angela Merkel’s softening stance toward European Central Bank President Mario Draghi’s rescue plan for Spain and Italy is repelling investors who bought bunds because of her fiscal vigilance. Investors seeking a haven from tumbling bond markets were willing to accept yields below zero for German bunds due in as long as three years because they were confident in her pledge that she wouldn’t add to the nation’s debt to expand bailout programs for weaker neighbors.
Funds managing more than $4 trillion are turning against bunds on concern Germany’s costs to bail out the euro zone’s most indebted nations will rise. The total may reach 500 billion euros ($614 billion), research firm Graham Fisher & Co. estimates. That amounts to about 45 percent of Germany’s current debt outstanding, according to data compiled by Bloomberg.
IMF Says Bailouts Iceland-Style Hold Lessons in Crisis Times (Source:Bloomberg)
Iceland holds some key lessons for nations trying to survive bailouts after the island’s approach to its rescue led to a “surprisingly” strong recovery, the International Monetary Fund’s mission chief to the country said. Iceland’s commitment to its program, a decision to push losses on to bondholders instead of taxpayers and the safeguarding of a welfare system that shielded the unemployed from penury helped propel the nation from collapse toward recovery, according to the Washington-based fund. “Iceland has made significant achievements since the crisis,” Daria V. Zakharova, IMF mission chief to the island, said in an interview. “We have a very positive outlook on growth, especially for this year and next year because it appears to us that the growth is broad based.”
Iceland refused to protect creditors in its banks, which failed in 2008 after their debts bloated to 10 times the size of the economy. The island’s subsequent decision to shield itself from a capital outflow by restricting currency movements allowed the government to ward off a speculative attack, cauterizing the economy’s hemorrhaging. That helped the authorities focus on supporting households and businesses. “The fact that Iceland managed to preserve the social welfare system in the face of a very sizeable fiscal consolidation is one of the major achievements under the program and of the Icelandic government,” Zakharova said. The program benefited from “strong implementation, reflecting ownership on the part of the authorities,” she said.
Greek Recession Making Bailout Targets Harder to Meet: Economy (Source:Bloomberg)
Greece’s economy contracted for a ninth straight quarter, making it harder for the government to meet the budget-reduction targets required under the country’s international bailouts. Gross domestic product declined 6.2 percent in the second quarter from the same period last year after dropping 6.5 percent in the first, the Athens-based Hellenic Statistical Authority said in an e-mailed statement today. The median estimate of three economists in a Bloomberg News survey was for a contraction of 7 percent. The authority doesn’t publish seasonally adjusted data or quarter-on-quarter rates. Greece’s economic slump, now in its fifth year, has been exacerbated by austerity measures imposed by creditors to reduce the nation’s budget deficit. Without further rescue loans, Greece may default on its debts, which could precipitate its departure from Europe’s monetary union.
“We keep on pushing more austerity simply because we have to meet conditionalities, and there is very little done really in terms of growth,” Elena Panaritis, a former member of parliament for the socialist Pasok party, said in a Bloomberg Television interview today.
King Says European Debt Crisis Has ‘No Obvious End in Sight’ (Source:Bloomberg)
Bank of England Governor Mervyn King said the U.K. must press on with reforms to the banking industry and repeated his gloomy outlook for the euro-area debt crisis, which is impeding Britain’s economy. “If the rest of the world were growing normally, the rebalancing and recovery of our economy would be much easier,” King wrote in an article in the Mail on Sunday newspaper. “But it isn’t. Even the rapidly expanding emerging-market economies are slowing, and the problems of the euro area continue with no obvious end in sight.” King’s comments came days after the Bank of England cut its growth forecasts and said the outlook is “unusually uncertain.” A sports fan who attends the Wimbledon tennis tournament every year, he pointed to London’s Olympic Games and said achievements such as winning a gold medal take “years of hard work.” The same applies to the economy, he said.
Britain’s long-term economic performance will depend on measures such as “reforming our banking system so that banks focus less on making money in the short term, and more on building businesses to serve their customers,” King said.
California Heat Lingers, Midwest May Stay Dry Through Next Week (Source:Bloomberg)
Heat will grip the western and southern U.S., pushing temperatures to 100 degrees Fahrenheit (38 Celsius) or more from Pasadena to Dallas today, while the Great Plains and Midwest remain parched. An excessive-heat warning has been issued for the mountains and valleys just north and east of Los Angeles as temperatures are expected to rise above 100 today and come close to that for the rest of the week, according to the National Weather Service. High temperatures pushed California electricity prices to their highest point in a month last week, while the drought gripping U.S. agricultural states has cut corn harvest projection to a six-year low and has kept crop prices high throughout the summer.
“It does seem like they are going to stay on the hotter- than-normal side but we don’t see them hitting the peaks of last week,” said Matt Rogers, president of Commodity Weather Group LLC in Bethesda, Maryland. “The impressive thing here is they haven’t seen the duration of this kind of heat for several years; you have to go back three years at least.” In Pasadena, California, about 10 miles northeast of Los Angeles, today’s high may reach 103 and in Burbank the high may be 100, the weather service said. Downtown Los Angeles is expected to hit 92.
DTN Closing Grain Comments 08/13 14:45 : Grains Sharply Lower Monday (Source:CME)
The grain complex took a beating on technical selling and noncommercial long-liquidation to begin the week. Initial support levels remain a distance away, meaning losses could build Tuesday.
Pro Farmer: After the Bell Wheat Recap (Source:CME)
Wheat futures saw followthrough from Friday's losses and spillover from neighboring pits to post double-digit losses at all three exchanges. Chicago wheat closed 21 1/2 to 28 1/2 cents lower in the September through May contracts, with Kansas City wheat down roughly 23 to 28 cents. Minneapolis wheat ended 19 1/4 to 24 1/4 cents lower. Traders still have USDA's higher-than-expected all wheat crop estimate on their minds.
Wheat Market Recap Report (Source:CME)
September Wheat finished down 28 1/2 at 856 3/4, 28 1/2 off the high and 2 up from the low. December Wheat closed down 25 1/2 at 875 3/4. This was 2 up from the low and 25 1/2 off the high. September Chicago wheat traded sharply lower into the close and settled near session lows. Kansas City and Minneapolis wheat traded sharply lower as well. Outside markets added pressure with US Stocks and crude oil both trading weaker on the day. The US dollar was lower throughout the session which offered no support to the grain market. Sunday night losses were extended after it was reported that Egypt bought 120,000 tonnes of wheat from Russia over the weekend. Algeria is also tendering for 50,000 tonnes of milling wheat for September-October shipment. Export inspections for the week ending August 9th were reported at 22.2 million bushels vs. 20.901 last week. At the current pace, 23.8 million bushels are needed each week to reach the USDA goal for 2012/13. Scattered showers were seen in parts of the Black Sea recently which should aid in winter wheat planting but the outlook for extended dryness in Australia is offering long term support to the wheat market. The market remains concerned over the export capabilities in Russia past December 2012 as the country deals with rising flour prices following this year's drought. Chicago wheat was also pressured by a sharply lower corn market. September Oats closed down 16 at 372 1/4. This was 1/4 up from the low and 16 1/4 off the high.
Pro Farmer: After the Bell Corn Recap (Source:CME)
Corn futures faced pressure throughout the session with selling pressure mounting into the close. September through July 2013 futures ended with losses in the mid-teens, while far-deferred months closed with slightly lighter losses. Today held little in terms of fresh news for corn , leaving the market vulnerable to profit-taking amid spillover pressure from soybeans.
GRAINS: Chicago corn edged lower, giving up more ground as the market took a breather from a drought-driven rally that lifted prices to an all-time high in the last session and raised fears of a food supply crisis. Soybeans slid around half a percent after rising on Friday, while wheat extended losses to nearly 4 percent over two sessions on smaller-than-expected cuts in global wheat production.(Reuters)
G20 plans response as food prices climb - report (Reuters)
The Group of 20 countries are planning a meeting to coordinate a response to surging food prices, the Financial Times reported on Monday, as the worst U.S. drought in more than half a century devastates crops, lifting grain prices to record highs.
U.S. corn, soy drought losses worse than expected-USDA(Reuters)
The worst drought in half a century slashed U.S. corn and soybean production more than expected, the government said on Friday, and tight supplies will mean the smallest corn use in six years and the lowest soy use in nine years.
Speculators go net long in cocoa after more than a year-CFTC(Reuters)
Speculators turned net long in cocoa contracts on ICE Futures U.S. for the first time in more than a year, in the week to Aug. 7 when the futures contract jumped to a 5-1/2-month high on weather concerns in main growing region West Africa, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.
U.S. drought crop damage worsens, ethanol waiver urged(Reuters)
The worst U.S. drought in more than 50 years has caused more damage than expected to corn and soybean crops, the U.S. government said on Friday, heightening calls for a suspension of ethanol quotas to head off another global food crisis.
In Iowa, Obama to announce measures to soothe drought pain(Reuters)
President Barack Obama will announce on Monday that the Department of Agriculture intends to buy up to $170 million of pork, lamb, chicken and catfish to help support farmers suffering from the drought, a White House official said.
Corn Market Recap for 8/13/2012 (Source:CME)
September Corn finished down 17 1/2 at 782 1/2, 22 off the high and 5 3/4 up from the low. December Corn closed down 17 1/4 at 792. This was 6 up from the low and 21 3/4 off the high. December corn traded sharply lower into the close but saw brief rallies throughout the day as end users covered on the slide in prices. The lower trade is linked to weak technicals, signaling profit taking by some traders. The US Dollar traded lower today which offered marginal support to commodities but outside markets were slightly negative with crude oil and stocks trading lower today. The market is expecting crop condition ratings to hold steady at 23% good/excellent which is offering no direction to the corn market. Export inspections for the week ending August 9th were supportive to corn and were reported at 22.276 million bushels vs. 19.88 last week. The current pace is still well behind the current USDA goal for this marketing year with 29.8 million bushels needed each week to reach the current government estimate. Export and ethanol demand remain sluggish for corn with cash corn levels in the Gulf of Mexico under the 3 year average and Iowa Ethanol profit margins dropping to negative 33 cents/bushel, signaling a continuation of the slowdown in the ethanol demand sector going forward. September Rice finished down 0.29 at 15.655, 0.115 off the high and equal to the low.
Corn Falls as Rally May Curb Demand; Soy, Wheat Drop on Rain (Source:Bloomberg)
Corn fell the most in five weeks on speculation that demand is slowing after a crop-damaging U.S. drought sent prices to a record this month. Soybeans and wheat declined as rain aided parched fields from Kansas to Ohio. Premiums for corn delivered to export terminals near New Orleans fell to the lowest since January 2011, U.S. Department of Agriculture data show. The government is reviewing mandates for ethanol use after corn futures jumped more than 60 percent since mid-June, drawing complaints from livestock producers that too much grain is being diverted to make fuel. “We know there is a shortage of corn, but at current prices, the demand for the grain will slow, especially from overseas buyers,” Greg Grow, the director of agribusiness for Archer Financial Services in Chicago, said in a telephone interview. “The anti-ethanol campaign has encouraged traders to sell out long positions.”
Corn futures for December delivery dropped 2.1 percent to close at $7.9225 a bushel at 2 p.m. on the Chicago Board of Trade, the largest drop for the most-active contract since July 6. The grain used to make animal feed, fuel and food touched a record $8.49 on Aug. 10. The USDA forecast on Aug. 10 that corn demand will shrink 10 percent from a year earlier as a drought cuts production by 13 percent. Crop conditions on Aug. 5 were the worst since 1988. The agency estimated ethanol plants will consume 4.5 billion bushels of corn in the year that starts Sept. 1, down from 5 billion a year earlier. One bushel of the grain makes at least 2.75 gallons of ethanol.
Soybeans, Corn Advance as Drought May Persist in U.S. Midwest (Source:Bloomberg)
Soybeans gained on speculation that a 1 percentage point improvement in U.S. crop conditions won’t ease supply concerns as drought persists in the Midwest. Soybeans for November delivery advanced as much as 0.5 percent to $16.08 a bushel on the Chicago Board of Trade, and were at $16.0425 at 8:36 a.m. Singapore time. Corn for December delivery rose as much as 0.6 percent to $7.9725 a bushel and was last at $7.9275. Less rain than normal will probably fall from Montana to western New York, including the Midwest, from Aug. 18 to 22, according to Joel Widenor, the co-founder of Commodity Weather Group LLC. Soybean crop conditions remained at the worst level since 1988, with 30 percent rated good to excellent in the week to Aug. 12, up from 29 percent a week earlier, the U.S. Department of Agriculture said yesterday.
“We would caution that the improvement in crop conditions is small and does not change the overall bleak supply outlook,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said in a report today. The U.S. soybean harvest, the world’s largest, will total 73.3 million metric tons in the year beginning Sept. 1, down from 83.2 million tons a year earlier, and smaller than the 83 million tons forecast last month, the USDA said Aug. 10. The share of the U.S. corn crop that’s rated poor to very poor expanded to 51 percent in the week ended Aug. 12, from 50 percent a week earlier. About 23 percent of the crop got the top ratings, unchanged from a week earlier and the smallest since 1988, according to the USDA.
Raw sugar futures steadied after sliding throughout last week, as monsoon rains in key grower India picked up and improved crop prospects, while arabica coffee and ICE cocoa eased.(Reuters)
Oil Rises From One-Week Low Amid Speculation U.S. Supply Shrank (Source:Bloomberg)
Oil rose from the lowest close in five days in New York before a government report forecast to show inventories declined a third week in the U.S., the world’s biggest consumer of crude. Futures advanced as much as 0.3 percent after dropping 0.2 percent earlier. U.S. fuel and crude stockpiles probably fell last week as refiners ran their plants at near the highest rates in five years, a Bloomberg survey shows before data released by the Energy Department tomorrow. U.S. retail sales probably expanded by 0.3 percent last month, the first increase since March, as employment picked up, a Bloomberg survey of economists showed before a report today.
“Markets are reluctant to take things much beyond here in the absence of fresh news that further changes the balance of risks,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “U.S. retail sales will be an interesting figure because it’ll provide an insight into whether the improvement that we saw in employment growth is in fact an indication of improving confidence levels.” Oil for September delivery gained as much as 27 cents to $93 a barrel in electronic trading on the New York Mercantile Exchange and was at $92.94 at 9:12 a.m. Singapore time. It slid 0.2 percent yesterday to $92.73, the lowest close since Aug. 6. Prices are 6 percent lower since the start of the year.
OIL-Oil hits 3-month high above $114 on supply concern
LONDON, Aug 13 (Reuters) - Oil rose above $114 per barrel to the highest in more than three months as concern about supplies and hopes that governments will roll out more stimulus measures trumped signs of weakening fuel demand.
"The likelihood of some sort of intervention to stimulate economies is supporting the market," said Christopher Bellew, an oil broker at Jefferies Bache in London. "Also, the North Sea, Iran and the Middle East are still a factor." The supply concerns countered forecasts of weakening oil demand which have weighed on prices. The International Energy Agency on Friday cut its 2013 oil demand forecast by 400,000 barrels per day, citing a slowdown in global economic activity.
China July crude oil output rises 1.4 pct on year
SHANGHAI, Aug 13 (Reuters) - Crude oil production in China, the world's second-largest oil consumer, in July rose 1.4 percent from a year earlier to 17.03 million tonnes, data from the National Bureau of Statistics showed on Monday.
Oil production for the month was also up 3.2 percent from June's 16.5 million tonnes, data showed.
Euro Coal-Prices dip, Oct S.African trades at $91/T
LONDON, Aug 10 (Reuters) - Physical prompt South African coal prices dipped slightly on Friday, in line with weaker gas, oil and the euro, having fallen by $4 a tonne on the previous day.
Oil fell to around $112 a barrel on Friday as a slowdown in China's trade flows and weaker forecasts from the International Energy Agency added to concern about demand .
Midwest drought helps push U.S. gasoline prices higher
NEW YORK, Aug 12 (Reuters) - Gasoline prices in the United States rose over the past two weeks, driven partly by supply disruptions and a drought-induced rise in ethanol prices, a widely followed survey showed on Sunday.
The Lundberg Survey said the national average price of self-serve, regular gas was $3.69 on Aug. 10, up from $3.51 on July 27.
Iron Ore-Spot prices at 31-month low, may fall further
SINGAPORE, Aug 13 (Reuters) - Sellers of foreign iron ore cargoes to China slashed prices further on Monday as the benchmark rate dropped to its lowest in more than 2-1/2 years, with losses likely to deepen further as weak steel demand forces mills to cut output.
Iron ore has fallen 24 percent from this year's peak near $150 in April as demand from the world's top consumer sagged along with its economy.
Baosteel cuts Sept steel prices, 3rd cut since June
SHANGHAI, Aug 10 (Reuters) - China's biggest listed steelmaker, Baoshan Iron & Steel , said it would cut September prices of its main products, the company's third price cut since June as demand falls in the world's second-largest economy.
Baosteel's pricing decisions are generally regarded as a bellwether for the industry. A price cut for September is significant, because steel demand in China usually increases in September and October when construction picks up.
Silver Hoard Near Record as Hedge-Fund Bulls Recoil: Commodities (Source:Bloomberg)
At a time when hedge funds are the least bullish on silver in almost four years, investors’ holdings are near a record, siding with the analysts predicting a rally as central banks move to bolster growth. Speculators cut bets on higher prices by 72 percent since the end of February, mirroring changes in their copper wagers, which turned bearish in May, U.S. Commodity Futures Trading Commission data show. Silver held in exchange-traded products climbed for three months and is now valued at $16.3 billion, according to data compiled by Bloomberg. Prices will average $33.02 an ounce in the fourth quarter, 18 percent more than now, the median of 13 analyst estimates compiled by Bloomberg show.
Hedge funds anticipate slowing growth will curb demand for silver, 53 percent of which is used in products from televisions to batteries. Investors and analysts are bullish on expectations central banks will do more to stimulate economies, expanding consumption and increasing the allure of precious metals as a store of value. Prices tripled as the Federal Reserve bought $2.3 trillion of debt in two rounds of so-called quantitative easing from December 2008 to June 2011. “Since the beginning of the year it has reacted more like a base metal than a precious one,” said Frederique Dubrion, the Geneva-based president and chief investment officer of Blue Star Advisors SA, which manages metals and energy assets. “The main negatives are still in industry. We’re waiting for more quantitative easing, and that would be really positive.”
Managed money cuts gold longs, ups copper shorts
Aug 10 (Reuters) - Hedge funds and money managers cut their net long position in U.S. gold futures and options in the week to Aug. 7, as speculators reduced their bullish bets on doubts over more imminent monetary stimulus by the Federal Reserve and other central banks.
The group trimmed their net longs in gold by 10,689 to 85,510 lots in the period, data from the Commodity Futures Trading Commission's (CFTC) Commitments of Traders showed.
China refined copper output falls 6.8 pct in July
HONG KONG, Aug 13 (Reuters) - China's output of refined copper dropped 6.8 percent in July from the previous month's record high production, customs data showed on Monday, as large stockpiles and weak demand prompted smelters to lower production.
Refined copper output was 483,000 tonnes in July, versus a record 518,000 tonnes in June, data from the National Bureau of Statistics showed on Monday. The July output was up 0.8 percent higher from the same month a year ago.
China daily steel output dips 0.8 pct in July from June
SHANGHAI, Aug 13 (Reuters) - China's daily crude steel output fell 0.8 percent to 1.99 million tonnes in July from the previous month, data from the National Bureau of Statistics showed, as steelmakers scaled back output in the face of sharply falling prices.
Steel output in July stood at 61.69 million tonnes, up 2.5 percent from June and taking total production to 419.46 million tonnes for the first seven months of the year, up 2.1 percent from a year earlier.
China oil, iron ore imports slow in July with economy
SHANGHAI, Aug 10 (Reuters) - China's imports of crude oil sank in July to a nine-month low and those of iron ore fell for the fourth time in five months as refineries and steel mills cut output due to slackening demand as growth in the world's second-largest economy sputtered.
China is the top buyer of iron ore, coal and several industrial metals. Investors and miners around the world rely on Chinese appetite for imports to prop up commodities prices struggling with sluggish demand in the United States and Europe.
METALS-LME copper edges down, stimulus hopes support
Copper fell for a fourth session amid nagging worries about the global economy, but losses were limited by hopes that the spate of disappointing economic data around the world last week would spur governments to roll out more stimulus measures.
"The base metal markets are exceptionally quiet. Most metals are stuck in range and investors' interest is dwindling. Copper looks set to stay within a tight $7,400-$7,600 range," said a Shanghai-based trader with an international firm. "Even the usual Chinese copper bargain hunters seem largely absent today, probably because many have already done their shopping during earlier dips."
PRECIOUS-Gold steady on stimulus hopes; platinum discount at record
Gold edged up, extending its winning streak into a seventh session as dimming prospects for global growth support expectations of more stimulus measures from central banks around the world.
"The sentiment (on gold) has gotten better in the past few days with investors focusing on central banks," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore.
Baltic index down as capesize, panamax rates weaken further
Aug 10 (Reuters) - The Baltic Exchange's main sea freight index, used to track rates for ships carrying dry commodities, fell on Thursday for the 24th straight day, as rates for panamax and capesize vessels continued to fall.
The main index, which reflects daily freight market prices for capesize, panamax, supramax and handysize dry bulk transport vessels, fell 16 points or 2 percent to 774 points, the lowest since March this year.
Pro Farmer: After the Bell Soybean Recap (Source:CME)
Soybean futures faced heavy selling pressure today, ending with losses of 39 3/4 to 53 1/4 cents in the August through January contracts. Farther deferred futures posted losses in the 28- to 32-cent range. Futures finished near session lows. Soybean futures faced a round of profit-taking and long liquidation today. Weekend rains and a relatively mild near-term weather forecast provided fundamental backing for the corrective selling.
Soybean Complex Market Recap (Source:CME)
August Soybeans finished down 53 1/4 at 1656 1/4, 57 1/2 off the high and equal to the low. November Soybeans closed down 43 at 1600 3/4. This was 2 1/2 up from the low and 51 1/4 off the high. August Soymeal closed down 18.2 at 526.3. This was equal to the low and 17.1 off the high. August Soybean Oil finished down 0.65 at 52.95, 0.45 off the high and equal to the low. November soybeans spent the day sharply lower and settled near the session lows. Soybean meal and oil saw steep declines as well. Outside markets offered minimal support with the US Dollar trading lower but US stocks weaker on the day. A cooler and wetter forecast is expected for most of the Midwest this week. Dry areas in the western Corn Belt are expected to miss a majority of the rainfall which will continue to stress soybean crops. Recent moisture has helped soybeans in the eastern and northern Corn Belt but has not provided relief to extremely dry areas in the western Midwest. Showers over the next 10 days in the Delta and Southeast should ease stress. Traders expect a 1% gain in good/excellent ratings in the crop conditions report this afternoon. Export inspections for the week ending August 9th were supportive to soybeans and were reported at 15.698 million bushels vs. 12.720 last week. Inspections needed each week stands at 11.8 million bushels to reach the 2011/12 USDA estimate. International demand remains robust for US soybeans which provides support to the long term outlook for prices. The July NOPA crush will be released tomorrow and the market estimates July crush at 132.5 million bushels vs. June crush at 134.156.
Malaysian crude palm oil futures eased, mirroring losses in the soybean oil market where traders booked profits from a drought-driven rally and as rising local stocks weighed on sentiment. (Reuters)