Monday, December 10, 2012

20121210 1815 FCPO EOD Daily Chart Study.

FCPO closed : 2313, changed : +16 points, volume : lower.
Bollinger band reading : pullback correction little downside biased.
MACD Histogram : recovering, buyer seller battling.
Support : 2300, 2250, 2230, 2200, 2130 level.
Resistance : 2300, 2350, 2400, 2450, 2490 level.
Comment :
FCPO closed recorded small gains with lesser volume changed hand. Soy oil price currently trading little weaker after last Friday closed marginally lower while crude oil trading higher after Friday loss.
Market still moving side ways between gains and losses after MPOB reported negative price biased November official data while 2 cargo surveyors release mixed exports figure.
FCPO daily chart reading continue suggesting a pullback correction little downside biased market development.
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.

20121210 1744 FKLI EOD Daily Chart Study.

FKLI closed : 1633.5 changed : +18 points, volume : higher.
Bollinger band reading : correction range bound little downside biased.
MACD Histogram : rising higher, buyer in control.
Support :  1627, 1623, 1615, 1610, 1600, 1595 level.
Resistance : 1635, 1640, 1645, 1650 level.
Comment :
FKLI closed rallied higher with improved volume transacted doing 1 point premium compare to cash market that also closed higher. Last Friday U.S markets closed recorded gains and today Asia markets ended in positice territory while European markets currently trading lower.
U.S and Asia markets traded higher on better than estimates U.S payroll data, today still resilient China ecocomy data in factory output, retail sales and under control inflation while European markets trading lower on Italian prime minister resignation news.
FKLI daily chart reading revised to suggesting a correction range bound little down side biased market development with possible pullback correction.
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.

20121210 1604 Global Markets & Commodities Related News.

STOCKS: European stock index futures turned negative in early trading, with deepening political uncertainty in Italy and disappointing Chinese trade data hurting sentiment while Asian shares touched a 16-month high. The Dow and the S&P 500 advanced modestly on Friday, though another sell-off in Apple depressed technology shares and kept the Nasdaq negative. (Reuters)

FOREX-Euro hugs 2-week low on worry about Italian leadership
TOKYO, Dec 10 (Reuters) - The euro flirted with two-week lows against the dollar after Italian Prime Minister Mario Monti offered to resign, raising political uncertainty over who will lead the euro zone's third-biggest economy out of the debt crisis.
"If Monti's pro-euro stance is to back off, that should raise concerns about the euro," said Junya Tanase, chief currency strategist at JPMorgan Chase in Tokyo.

China surprises with weak exports, signals slow recovery (Reuters)
China's exports growth slowed sharply to a much lower than expected 2.9 percent in November, underscoring the global headwinds dragging on an economy showing otherwise solid signs of a pick up in domestic activity.

U.S. employment ducks Superstorm Sandy's punch (Reuters)
U.S. companies kept up their slow but steady hiring pace in November, defying predictions that Superstorm Sandy would deal a big blow to the labor market.

GRAINS: Chicago corn futures eased to a three-week low, extending losses for the third straight session, crimped by sluggish exports from top supplier the United States and expectations of higher inventory forecast by the USDA. (Reuters)

Agentina to cut wheat export 25 pct due to poor harvest-paper (Reuters)
Major wheat supplier Argentina will trim the quantity of 2012/2013 wheat destined for overseas shipment to 4.5 million tonnes from a previous 6 million due to a smaller than forecast harvest, a local newspaper reported on Saturday.

OIL: Brent crude held above $107 a barrel, snapping five straight days of losses, as promising data from the world's top two oil consumers revived hopes for growth in demand in a well-supplied market. (Reuters)

China's iron ore imports near 2-year high in Nov (Reuters)
China's November iron ore imports rose 17 percent from the previous month to their highest in almost two years, according to customs data issued, as steel mills stocked up on the steelmaking raw material due to higher profit margins.

BASE METAS: London copper hit its highest in almost two months after data showed China's factory output growth accelerated to eight-month highs in November, but lingering worries that the euro zone may return to recession next year kept a lid on gains. (Reuters)

PRECIOUS METALS: Gold traded steady above $1,700 an ounce, as a drop in the U.S. unemployment rate did little to dampen the outlook for easy monetary policy, which is expected to be reaffirmed at a Federal Reserve meeting later this week. (Reuters)

China's iron ore imports near 2-year high in Nov
BEIJING, Dec 10 (Reuters) - China's November iron ore imports rose 17 percent from the previous month to their highest in almost two years, according to customs data issued on Monday, as steel mills stocked up on the steelmaking raw material due to higher profit margins.
Imports were 65.78 million tonnes in November, their highest since January 2011. Total imports in the first 11 months of the year were 672.9 million tonnes, up 8 percent compared to the same year-ago period.

METALS-Copper hits near 2-month high on China data
SINGAPORE, Dec 10 (Reuters) - London copper hit its highest in almost two months after data showed China's factory output growth accelerated to eight-month highs in November, but lingering worries that the euro zone may return to recession next year kept a lid on gains.
"We've been gathering signs that things in China are going to stabilise and hopefully improve in the year ahead. So the outlook is looking a little bit more favourable for industrial metals," said Alexandra Knight, an economist with National Australia Bank in Melbourne.

PRECIOUS-Gold inches up as Fed seen to stay accommodative
SINGAPORE, Dec 10 (Reuters) - Gold inched up as a drop in the U.S. unemployment rate did little to dampen expectations that the Federal Reserve will maintain easy monetary policy when it meets later this week.
"Market expectation is that there could be more quantitative easing towards the end of the month, and this will be supportive of gold," said Lynette Tan, an analyst at Philip Futures in Singapore.

20121210 1713 Palm Oil Related News.

SGS CPO export up 0.4% to 516,841 tonnes for the period of 1~10 Dec 2012.

MPOB Official Data for the month of Nov 2012 vs Oct 2012
Exports down 5.6% to 1.66 million tonnes
Stocks up 2.3% to 2.56 million tonnes
Output down 2.6% to 1.89 million tonnes

Mon Dec 10, 2012 1:05am EST
* Mixed market, investors eye end-stocks and external
factors -trader
    * Dec. 1-10 exports fall 2.8 percent -ITS
    * Stocks up at a slower pace of 2.3 pct, hits record at 2.56
mln tonnes -MPOB

 (adds details, comments)
    By Anuradha Raghu
    KUALA LUMPUR, Dec 10 (Reuters) - Malaysian palm oil futures
inched up on Monday as some investors took up positions ahead of
key industry data issued during the midday break that showed
stocks had risen to a record at a slower pace than expected.
    The market is set to remain choppy in the afternoon session
as traders price in a dip in exports for the first ten days of
December on weaker Chinese demand, a slowdown in Malaysian
stocks growth and uncertain global economic conditions.
    Despite the volatility, palm oil futures are set to post
their worst annual performance since the financial crisis in
    "The market rallied before the midday close on the
expectation that the rise in stocks will be small and it was
proven right," said a dealer with a foreign commodities
    "The economic issues in the U.S. will be a shadow on the
market and December 1-10 palm oil exports for Malaysia did not
look so great," he added.
    By midday, benchmark February contract on the Bursa
Malaysia Derivatives Exchange rose 0.4 percent to 2,306 ringgit
($754) per tonne. Total traded volumes rose to 16,651 lots of 25
tonnes each, higher compared to the usual 12,500 lots.
    Data from the Malaysian Palm Oil Board showed that
November's inventory level rose 2.3 percent to a record 2.56
million tonnes from the previous month. Stocks grew at a weaker
than expected pace, potentially supporting
    But export data for the first ten days of December could
weigh on the market. Malaysian exports fell 2.8 percent during
that period to 504,032 tonnes from 518,688 tonnes shipped during
Nov 1-10, cargo surveyor Intertek Testing Services.
    Yet investors are banking on higher shipments in the next
few weeks as planters rush to finish their annual tax free
export quota allocation of 3.5 million tonnes which expires end
of December.
    Brent crude futures held above $107 a barrel on Monday,
snapping five straight days of losses, as promising data out of
the world's top two oil consumers revived demand growth hopes in
a well-supplied market.
    In palm oil's competing markets, U.S. soyoil for January
delivery fell 0.3 percent. The most active May 2013
soybean oil contract on the Dalian Commodity Exchange
also rose 0.1 percent.

20121210 1138 Global Markets & Energy Related News.

GLOBAL MARKETS-Asian shares firm as China, U.S. data brighten outlook
SINGAPORE, Dec 10 (Reuters) - Asian shares crept higher as investors took heart from economic data from China and the United States that raised hopes about the outlook for growth in the world's top two economies.

FOREX-Euro stung by euro zone worries; China trade data eyed
SYDNEY, Dec 10 (Reuters) - The euro came under pressure in Asia as the prospect of a recession in Germany and renewed concerns about Italy weighed on sentiment, while strong Chinese data helped support the Australian dollar.
"We're seeing a building of interest rate-cut expectations really start to take off," said Ilya Spivak, currency strategist at DailyFX in Sydney.

U.S. employment ducks Superstorm Sandy's punch
WASHINGTON, Dec 7 (Reuters) - U.S. companies kept up their slow but steady hiring pace in November, defying predictions that Superstorm Sandy would deal a big blow to the labor market.
While the unemployment rate fell to a near four-year low of 7.7 percent, that was only because many Americans gave up the hunt for work, tempering the signal from the stronger-than-expected payrolls growth.

Oil seesaws as US job growth offsets budget deadlock
NEW YORK, Dec 7 (Reuters) - Oil prices were little changed on Friday after data showing U.S. job growth offset statements by U.S. Republican lawmaker John Boehner indicating deadlock in talks to avert a U.S. budget crisis.
"Oil got a boost from the jobs numbers, but the consumer confidence pulled us back some and now traders will have to decide if they want to be short going into the weekend with the situation in the Middle East still so volatile," said Phil Flynn, analyst at Price Futures Group in Chicago.

U.S. energy agency adopts Brent, drops U.S. crude
LONDON, Dec 7 (Reuters) - The U.S. government's energy agency has adopted North Sea Brent crude  as its benchmark for oil forecasts, dropping its domestic benchmark, saying it no longer reflects the price paid for oil by U.S. refineries.
The Energy Information Administration  said in its annual energy outlook it was abandoning West Texas Intermediate, traded on the New York Mercantile Exchange, and switching to Brent on the InterContinental Exchange.

Iraq sees near-record 3.7 mbpd oil output in 2013
VIENNA, Dec 9 (Reuters) - Iraq, the world's fastest growing crude exporter, expects more quick gains next year as foreign companies push production towards the highest level ever, Iraqi Oil Minister Abdul-Kareem Luaibi said on Sunday.
After stagnating for decades due to wars and sanctions, Iraq's oil output began to rise in earnest in 2010 after Baghdad secured service contracts with companies such as BP, Eni, Exxon Mobil  and Royal Dutch Shell.

US natural gas rig count off for 2nd week-Baker Hughes
NEW YORK, Dec 7 (Reuters) - The number of rigs drilling for natural gas in the United States fell this week for the second straight week as relatively soft gas prices continued to pressure producers to scale back dry-gas drilling operations.

Forecast drop in Alaskan oil output brings fiscal challenge
ANCHORAGE, Alaska, Dec 7 (Reuters) - Oil production from Alaska's declining North Slope fields is expected to fall 4.5 percent this fiscal year, posing a growing challenge for the state's finances, Alaska's Department of Revenue said this week.
North Slope output should drop to an average 552,800 barrels per day in the 12 months ending June 30, down from 579,100 bpd in fiscal 2012, the Department said in a semiannual release on its website earlier this week.

China seen raising Saudi oil imports 11 pct in 2013 –trade
BEIJING, Dec 7 (Reuters) - China's crude oil imports from Saudi Arabia are likely to rise about 11 percent next year, faster than this year's growth rate, as refiners lift output in anticipation of an economic recovery and an increase in fuel demand, industry officials said.
China, the world's second-largest crude consumer, is expected to buy about 1.17 million barrels per day (bpd) of Saudi oil next year, 120,000 bpd more than this year's contracted amount. The figures are based on estimates by industry sources with direct knowledge of the supply situation.

20121210 1002 Malaysia Corporate Related News.

Petronas gets green light for Progress deal
Petroliam Nasional (Petronas) received the approval of the Canadian government to take over Calgary-based natural gas producer Progress Energy Resources for CND5.2bn (RM16.4bn) last Friday, ending two months of uncertainty on the matter. The acquisition was previously met with opposition from the Canadian government that was under pressure because the transaction, if approved, would increase the taking over of Canada’s lucrative oil sands by foreign government-controlled oil majors. (Financial Daily)

TM welcomes spectrum award
Telekom Malaysia (TM) welcomed the government’s move to award the 2,600 MHz spectrum to eight companies that will allow them to provide 4G services, describing this as a positive effort in terms of promoting development of telecommunications’ infrastructure and services in the country. Its chairman, Datuk Seri Dr Halim Shafie said the introduction of this 2,600 MHz spectrum would definitely change the competitive landscape of the country’s telecommunications industry given that the spectrum is basically a resource. (BT)

Encouraging sales fuel Petronas Dagangan’s optimism
Petronas Dagangan expects a good fourth quarter financial results on the back of encouraging sales, said its managing director/chief executive officer Aminul Rashid Mohd Zamzam. He said fuel oil prices normally increase a little at the end of the year due to high energy consumption. He added that if the trend continues like in previous years, it will be favourable to the company. (BT)

Nam Cheong launches Malaysia’s first MPSV
Nam Cheong Dockyard, Malaysia’s largest manufacturer of offshore support vessels (OSV), recorded another milestone last Saturday when it launched the NC800, the country’s first diesel electric multi-purpose platform support vessel (MPSV). Designed by Finnish company Wartsila, the RM106m vessel is commissioned by Bumi Armada. The ship, to be named Armada Tuah 300, will serve Sarawak Shell and Sabah Shell Petroleum in the deepwater Gumusut field, off the coast of Sabah. (BT)

Astro looks ahead
Fresh from announcing its third-quarter results, Astro Malaysia Holdings says it is ready to continue to push forward and put behind it the “noise” which had surrounded the stock’s poor performance since its listing on 19 Oct. Chief executive officer, Datuk Rohana Rozhan said the pay-TV operator’s growth would hinge on three growth pillars, namely new subscribers, a higher take-up of “value-add” services among its current subscribers which will cause its average revenue per user to rise as well as increase in advertising revenue. (StarBiz)

Oldtown private placement priced at RM1.95 per share
Oldtown has fixed the price of its first tranche of placement shares at RM1.95 per share, its filing to Bursa Malaysia last Friday noted. The price is a 4.6% discount to the five-day traded average of RM2.04 per share of the cafe chain operator. (Malaysian Reserve)

Revealed: The reason behind oversubscribed shares for IPOs
The multiple times oversubscription of shares for local initial public offerings (IPOs) may not be due to pent-up demand from local institutional investors, but simply a case of the investors putting in a higher-than-required bid to ensure they secure a certain minimum amount of shares in the company. Institutional investors were usually inclined to bid for higher amounts of IPO shares than what they really aimed for as they would normally only be allotted a certain portion of the shares they bid for. (Malaysian Reserve)

Gabungan AQRS secures two credit facilities worth RM92m
Gabungan AQRS has secured two credit facilities amounting to RM91.5m from Bank Kerjasama Raykat Malaysia. In an exchange filing last Friday, the company said the first facility, amounting to RM10m with a tenure of 42 months, was to part finance up to 75% of the soft cost of works for the proposed development known as One Temenggong. The development comprises of one block of service apartments on Jalan Temenggung, Mukim Tebrau, Johor Bahru. (Malaysian Reserve)

Bumi Armada: Nam Cheong launches MYR106m ship. Nam Cheong Dockyard Sdn Bhd, Malaysia's largest manufacturer of Offshore Support Vessel (OSV), recorded another milestone last Saturday when it launched the NC800, the country's first diesel electric multi-purpose platform support vessel (MPSV). Designed by Finnish company Wartsila, the MYR106m vessel is commissioned by Bumi Armada Bhd. To be named Armada Tuah 300, the ship will serve Sarawak Shell Bhd and Sabah Shell Petroleum Co in the deepwater Gumusut field, off the coast of Sabah. (Source: Business Times)

Scomi Group: Scomi Oiltools wins MYR94m job in Myanmar. Scomi Group Bhd's oilfield services business unit Scomi Oiltools Sdn Bhd has been awarded by PTTEP International Ltd (PTTEPI) a drilling fluids and drilling waste management contract worth MYR93.6 million in Myanmar. Under the contract which starts in the fourth quarter of 2012, Scomi will provide both its drilling fluids and drilling waste management equipment and related engineering services for three blocks in Myanmar. (Source: The Sun Daily)

Construction: Singapore link to Tanjung Puteri land? The long awaited rail transit system (RTS) from Singapore will likely land in Tanjung Puteri, Johor Baru, according to executives involved in the project. An announcement, expected in the next two months, will finally put to rest speculation on the location of the RTS that is likely to provide the connection from Woodlands in Singapore to Johor Baru. Mentari Besar Datuk Abdul Ghani Othman announced last week that a further 200 acres would be reclaimed in Tanjung Puteri which would be extended as the new centre for Johor Baru City. (Sources: The Edge Financial Daily)

O&G: Ineos Technologies secures Petronas deal. Petronas has awarded Ineos Technologies the linear low/high density polyethylene (LL/HDPE) portion of its MYR60b Refinery and Petrochemical Integrated Development (Rapid) project. Ineos Technologies business director Pete Grant said the company will be providing the process design, training and start-up assistance for the 350 kilotonnes per annum (kta) LL/HDPE plant. (Source: Business Times)

Transportation: KTM Bhd on track to profitability. KTM Bhd (KTMB) says the five-year business plan that it presented to the government recently is aimed at turning around the loss-making company into a profitable entity. KTMB president Datuk Elias Kadir said the business plan includes improvements to the commuter train's delivery time and operational efficiency. (Source: Business Times)

20121210 1002 Global Economy Related News.

China: Rebound accelerates
China’s factory output and retail sales topped forecasts last month in signs that an economic recovery is accelerating, improvements that may pare a jobless rate newly estimated at almost double the official figure. Industrial production climbed 10.1% in Nov from a year earlier and retail sales growth accelerated to 14.9%, while inflation was 2.0%. (Bloomberg)

Greece: Close to reaching debt buyback target
Greece is near to reaching its target in a buyback of sovereign debt that will unlock aid from the IMF and the EU, according to a Greek government official. The amount offered in the buyback of Greece’s bonds is close to EUR30bn. (Bloomberg)

Germany: Bundesbank slashes 2013 growth forecast to 0.4%
The Bundesbank sliced more than 1ppt off its forecast for economic expansion in Germany next year after the sovereign debt crisis pushed the euro area into recession and global growth slowed. The Bundesbank cut its 2013 projection to 0.4% from the 1.6% predicted in June and said the economy, Europe’s largest, will grow 0.7% this year, down from its previous forecast of 1.0%. (Bloomberg)

US: Consumer sentiment nose-dives in Dec
US’ consumer sentiment took a giant step back in Dec, as the looming fiscal cliff made its first measurable dent on the public’s psyche. The preliminary University of Michigan-Thomson Reuters consumer sentiment index fell to 74.5 from 82.7 in Nov. That’s far below the 82.0 expected in a MarketWatch-compiled economist poll, eliminating four months of gains and also representing the biggest one-month drop since March 2011. (MarketWatch)

US: Creates 146,000 jobs in Nov
Businesses maintained a steady if unspectacular pace of hiring in Nov and the unemployment rate fell to the lowest level in four years as the US economy brushed off the damage caused by Hurricane Sandy. The US added 146,000 jobs last month with the unemployment rate falling to 7.7% from 7.9%, the lowest level since Dec 2008, as more people dropped out of the labor force and stopped looking for work. (MarketWatch)

US: Retail sales probably rose on automobile demand
Sales at US retailers probably rose in Nov as the holiday shopping season got under way and demand for automobiles rebounded after Superstorm Sandy. The projected 0.4% gain would follow a 0.3% drop in October, according to the median forecast of 60 economists surveyed by Bloomberg. (Bloomberg)

20121210 1001 Global Markets Related News.

Asia FX By Cornelius Luca - Sun 09 Dec 2012 17:28:51 CT (CME/
The appetite for risk is limited ahead of the Asian open. The European currencies open further down after diving on Friday, but the commodity currencies start higher. The US non on-farm payrolls report was mixed, so all eyes remain on the lack of progress in the "fiscal cliff" game of politics. The short-term outlook for the European and commodity currencies is sideways with various biases. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on all European currencies. Good luck!

US: The non-farm payroll employment increased by 146,000 jobs in November following a downwardly revised increase of 138,000 jobs (171,000 jobs originally reported) in October. The unemployment rate fell to 7.7% in November from 7.9% in October.
US: The preliminary University of Michigan-Thomson Reuters consumer sentiment index fell to 74.5 in December from 82.7 in November.Canada: The unemployment rate declined to 7.2% in November from 7.4% in October.
Canada: Labor productivity came in at -0.5% in the third quarter vs. -0.4% in the second quarter.

Today's economic calendar
China: Consumer Price Index for November
China: Industrial production for November
China: Retail sales for November
Japan: Bank lending for November
Japan: BSI Large manufacturing for the third quarter
Japan: Current account for October
Japan: Gross Domestic Product for the third quarter
Japan: Consumer confidence index for November
Japan: Eco watchers survey: current for November AU Home loans for October
Australia: Investment lending for homes for October

Asian Stocks Rise to Eight-Month High on China, U.S. Data (Bloomberg)
Asian stocks rose, with the regional benchmark index extending its advance to an eight-month high, after China’s factory output and retail sales topped forecasts and the U.S. unemployment rate unexpectedly fell. Samsung Electronics Co., the world’s biggest maker of smartphones, gained 1.4 percent in Seoul. Rio Tinto Group (RIO), the world’s No. 2 mining company that gets about 31 percent of sales from China, climbed 1.8 percent in Sydney. Advantest Corp., the largest producer of semiconductor-testing devices, jumped 6.9 percent in Tokyo after its President Haruo Matsuno said he expects new orders to rise 20 percent this quarter. The MSCI Asia Pacific Index (MXAP) gained 0.2 percent to 126.33 as of 9:35 a.m. Tokyo time. Markets in China and Hong Kong have yet to open.
The measure advanced in the past three weeks, the longest such winning streak since the period ended Aug. 17., amid signs of recovery in the world’s two largest economies and optimism U.S. lawmakers will agree on a budget deal to avert the so-cal led fiscal cliff. “We could see a more sustained recovery in equity markets as China’s economy shows signs of gradual recovery,” said Yoji Takeda, who oversees about $1.2 billion as Hong Kong-based head of Asian equities at RBC Investment Management (Asia) Ltd. “There’s underlying uncertainties in Europe amid political maneuvering in Italy ahead of elections.” Italian Prime Minister Mario Monti said he intends to resign, renewing concern nations in the currency bloc are grappling with a deepening debt crisis.

Nikkei 225 Heads for Seven-Month High on U.S, China Data (Bloomberg)
Japan stocks rose, with the Nikkei 225 Stock Average headed for its highest close since April, after data in the U.S. and China added to signs of recovery in the world’s two biggest economies. Gains were limited as revised estimates showed Japan’s economy shrank last quarter. Komatsu Ltd. (6301), a maker of construction machinery that gets 37 percent of its sales in the Americas and China, added 1 percent. Advantest Corp. (6857), the world’s biggest maker of memory- chip testers, rose 6.4 percent after President Haruo Matsuno said he expects new orders to rise 20 percent this quarter. Panasonic Corp. (6752) advanced 3.3 percent on a report the electronics company is considering selling a building in Tokyo. The Nikkei 225 Stock Average (NKY) added 0.3 percent to 9,555.92 at 9:49 a.m. in Tokyo, headed for the highest close since April 26. The broader Topix Index advanced 0.1 percent to 790.93, with more than nine stocks rising for every six that fell.
“Speaking of the U.S., jobs and housing are recovering gradually and surely, providing confidence to the economy,” said Ichiro Yamada, general manager of equities who helps manages about 300 billion yen ($3.63 billion) at Fukoku Mutual Life Insurance Co. “There’s a sense that Japanese stocks will extend gains toward this year’s high around 10,200.”

U.S. Stocks Cap Longest Weekly Gain Since August on Jobs (Bloomberg)
U.S. stocks rose a third week, giving the Standard & Poor’s 500 Index its longest winning streak since August, as employment growth topped forecasts and investors weighed prospects for a budget agreement in Washington. Citigroup Inc. (C) surged 8.9 percent on plans to cut more than 11,000 jobs and scale back in some emerging markets to drive down costs. Netflix Inc. (NFLX) jumped 5.2 percent after the online video service signed a multi-year agreement with Walt Disney Co. Apple Inc. (AAPL) sank 8.9 percent, the most since 2010, on concern the company will lose ground in smartphones to Nokia Oyj (NOK) in China and give up market share to Google Inc. in tablets. The S&P 500 (SPXL1) increased 0.1 percent to 1,418.07 for the week. The benchmark measure for American equities extended its advance from a three-month low on Nov. 15 to 4.8 percent and finished at the highest level since Election Day. The Dow Jones Industrial Average added 129.55 points, or 1 percent, to 13,155.13.
“The market took the jobs report as an encouraging sign,” said Brad Sorensen, director of market and sector analysis at San Francisco-based Charles Schwab Corp. His firm has $1.9 trillion in client assets. “There’s also a bit of Washington fatigue. It seems like Congress and the administration have managed to come through with a deal at the last minute multiple times before. We’re relatively neutral at this point in time.” The S&P 500 is down 0.7 percent since President Barack Obama was re-elected on Nov. 6 as he seeks a deal with Republican lawmakers to prevent more than $600 billion of automatic tax increases and spending cuts from coming into effect next year.

European Stocks Rally for Third Week on China, U.S. Talks (Bloomberg)
European stocks rallied for a third week, climbing to an 18-month high, amid increasing optimism that China’s economy will sustain its recovery and U.S. lawmakers will reach a compromise to avoid a fiscal deadlock. Rio Tinto Group led commodity shares higher. Nokia Oyj (NOK1V) gained 14 percent after winning a deal to sell its flagship smartphone in China. European Aeronautic, Defence & Space Co. jumped 15 percent after announcing a new shareholder structure and unveiling a share buyback. GDF Suez (GSZ) SA slid to a record low after saying earnings will decline next year. The benchmark Stoxx Europe 600 Index (SXXP) advanced 1.2 percent to 279.17 this week, the highest since May 2011. The gauge has rallied 19 percent from this year’s low on June 4 as the European Central Bank and the Federal Reserve expanded bond purchases and U.S. economic data beat estimates.
“Markets are hopeful that a sensible conclusion can be reached on the U.S. fiscal cliff,” Jeremy Batstone-Carr, head of research at Charles Stanley Group Plc in London, said in a telephone interview. “There is a sense of investors adding to risk, but only mildly.”  Republican defectors joined Democrats in signing a letter that called upon President Barack Obama and House Speaker John Boehner to explore “all options” to end an impasse over taxes on top earners. Congress must strike a budget deal before the New Year to prevent $607 billion of automatic tax increases and spending cuts from coming into effect. Obama said he is willing to make concessions in the talks if Republicans agree to consider taxes on the rich. “We have the potential of getting a deal done,” he said in an interview on Bloomberg Television on Dec. 4.

U.S. Yields Are Highest Versus G-7 Peers in Eight Months (Bloomberg)
Treasury yields were the highest versus their Group-of-Seven peers in eight months on speculation quickening U.S. jobs growth and Federal Reserve bond purchases will support the world’s biggest economy in 2013. Bonds in an index of G-7 debt excluding Treasuries yielded 37 basis points more than U.S. government securities, according to data compiled by Bloomberg. The difference was the least since April. Data yesterday showed China’s factory output and retail sales topped economists’ forecasts last month. “Yields will start to rise,” said Hiroki Shimazu, an economist in Tokyo at SMBC Nikko Securities Inc. “The two largest economies are recovering.”
Benchmark 10-year notes yields were little changed today at 1.62 percent as of 9:52 a.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 1.625 percent security due in November 2022 was 100 2/32. The rate climbed four basis points, or 0.04 percentage point, on Dec. 7 after the Labor Department said the U.S. added 146,000 jobs in November, exceeding all estimates in a Bloomberg News survey of economists. Dealers that trade with the Fed expect the central bank to begin buying as much as $45 billion of Treasuries a month at its Dec. 12 meeting and keep benchmark interest rates about zero into 2015, Bloomberg surveys show. The purchases would come on top of the $40 billion per month of mortgage securities announced in September, under the central bank’s strategy of trying to fuel the expansion by putting downward pressure on interest rates.
China’s industrial production climbed 10.1 percent in November from a year earlier and retail sales growth accelerated to 14.9 percent, the statistics bureau said yesterday. U.S. 10-year yields will increase to 2.23 percent by the end of 2013, according to a Bloomberg survey of banks and securities companies, with the most recent projections given the heaviest weightings.

Euro Near 2-Week Low on Monti Resignation Plan (Bloomberg)
The euro traded 0.3 percent from its lowest level in two weeks after Italy’s prime minister said he intends to resign, rekindling concern that a change in government will upend efforts to rein in debt. The euro slid versus most of its 16 major counterparts ahead of a Dec. 13-14 summit of European Union leaders to debate a road map for the overhaul of the 17-nation currency bloc. Demand for the dollar was limited amid speculation the Federal Reserve may announce this week additional bond purchases. The yen remained lower after data showed Japan’s economy contracted more than economists estimated. The news out of Italy “impacts the euro because it’s evidence of more political instability within the zone,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp. (WBC) “In the near term at least, it does look like the euro wants to go lower.”
The euro fell 0.2 percent to $1.2907 as of 9:36 a.m. in Tokyo after touching $1.2877 on Dec. 7, the weakest since Nov. 23. It slid 0.1 percent 106.56 yen. The dollar fetched 82.56 yen from 82.49 at the end of last week, when it climbed to 82.83, the highest since Nov. 22. Italy’s Mario Monti will try to corral his coalition, which includes his predecessor Silvio Berlusconi’s People of Liberty Party, for a vote to pass the budget before handing in his “irrevocable resignation,” Italian President Giorgio Napolitano’s office said in an e-mailed statement on Dec. 8. Monti, 69, will quit immediately if his allies won’t comply, the premier’s spokeswoman, Elisabetta Olivi, said in a telephone interview.

Aussie Dollar Holds Gains on China Rebound Signs; Kiwi Rises (Bloomberg)
Australia’s dollar traded 0.3 percent from the highest in more than two months amid signs economic growth in China is rebounding, boosting the South Pacific nation’s prospects for exports. The so-called Aussie held gains from last week before Chinese trade figures today, following reports that showed retail sales and industrial production topped economists’ forecasts. New Zealand’s kiwi dollar advanced against most major peers after data showed the nation’s manufacturing volumes rose. The South Pacific currencies touched the highest in more than three weeks against the euro after former Italian Prime Minister Silvio Berlusconi pledged to topple Mario Monti. “The data from China continues to show improvement and a gradual re-acceleration,” said Peter Dragicevich, a currency economist in Sydney at Commonwealth Bank of Australia. (CBA) “It hasn’t pushed the Aussie or the kiwi too much, but it is providing support to these currencies.”
The Australian dollar traded at $1.0482 as of 12:13 p.m. in Sydney from $1.0488 on Dec. 7, when it capped a 0.6 percent weekly gain. On Dec. 6, it touched $1.0516, the highest since Sept. 21. The Aussie slid 0.1 percent to 86.45 yen. It gained 0.1 percent to 81.22 euro cents, after touching 81.48, the strongest since Nov. 20. The kiwi rose 0.1 percent to 83.36 U.S. cents and 0.1 percent to 68.75 yen. New Zealand’s currency touched 64.63 euro cents, the highest since Nov. 13, before trading at 64.58, 0.3 percent above the Dec. 7 close. Australian government bonds fell, with the 10-year yield rising three basis points, or 0.03 percentage point, to 3.15 percent.

Fed Exit Plan May Be Redrawn as Assets Near $3 Trillion (Bloomberg)
A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month-old blueprint for an exit from record monetary stimulus. Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit -- increasing the risk that a jump in interest rates would crush the economic recovery. “There is certainly an issue about unwinding the balance sheet” in a way that “is effective and continues to support the recovery without creating inflation,” St. Louis Fed Bank President James Bullard said in an interview in October. The central bank might have to “revisit” the 2011 strategy, he added.
The Fed is already buying $40 billion a month in mortgage- backed securities to boost the economy, and policy makers meeting Dec. 11-12 will consider whether to purchase more assets. John Williams, president of the San Francisco Fed, has proposed adding $45 billion of Treasury securities a month. The bigger the balance sheet, “the riskier the exit becomes,” Richmond Fed President Jeffrey Lacker said during a Nov. 20 speech in New York. “That is something we need to think carefully about.” Krishna Memani, director of fixed income at OppenheimerFunds Inc., said a too-rapid sale of assets risks disrupting the $5.2 trillion market for agency mortgage debt.

Retail Sales in U.S. Probably Rose on Automobile Demand (Bloomberg)
Sales at U.S. retailers probably rose in November as the holiday shopping season got under way and demand for automobiles rebounded after superstorm Sandy, economists said before a report this week. The projected 0.4 percent gain would follow a 0.3 percent drop in October, according to the median forecast of 60 economists surveyed by Bloomberg before Dec. 13 figures from the Commerce Department. Other reports may show a gain in industrial production, while cheaper gasoline helped push down the cost of living. Vehicle sales last month jumped to the fastest pace since February 2008 after slowing in the wake of Sandy’s destruction along the eastern seaboard. While job gains are helping sustain consumer spending, fiscal tightening slated for early next year threatens growth and may set back employment, one reason Federal Reserve policy makers will weigh increasing stimulus when they meet this week.
“A good holiday shopping season could be mitigated to some extent by the weakness observed early in the month,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York. “The path of economic activity is suggestive to us that the Fed will continue to upsize” its stimulus programs. Cars and light trucks sold in November at a 15.5 million annual rate, up from 14.2 million a month earlier when Sandy kept East Coast shoppers away during auto dealers’ busiest time of the month, according to Ward’s Automotive Group. Ford Motor Co. (F) deliveries of cars and light trucks climbed 6.4 percent and General Motors Co. (GM) sales gained 3.4 percent, the companies said Dec. 3.

Treasuries Trade in Tightest Range Since July on Fed Speculation (Bloomberg)
Treasury 10-year note yields traded within a quarter-percentage point of a record low as stronger- than-forecast job growth failed to blunt speculation the Federal Reserve will announce another round of bond purchases. Yields on benchmark 10-year notes rose from the least in more than two weeks yesterday after Labor Department figures showed the U.S. added 146,000 jobs in November and the unemployment rate fell to 7.7 percent. Fed officials, who said after September’s policy meeting that they will buy bonds until the job market improves substantially, gather for the final time this year Dec. 11-12. The Fed “easing is going to continue,” Mohamed El-Erian, chief executive officer at Newport Beach, California-based Pacific Investment Management Co., the world’s biggest manager of bond funds, said yesterday in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “We will see more balance-sheet operations and maybe even see a tweak to the communications. The Fed will remain hyper active.”
Ten-year note yields rose less than one basis point, or 0.01 percentage point, to 1.62 percent this week, according to Bloomberg Bond Trader data. The price of the 1.625 percent notes maturing in November 2022 fell 2/32, or 63 cents per $1,000 face value, to 100. The yield traded within a range of 9.3 basis points this week, the narrowest amount since the five days ended July 20. The yield, which dropped to a record low of 1.38 percent July 25, touched 1.56 percent on Dec. 6.

IMF’s Lagarde Says U.S. Fiscal Agreement Should Be Comprehensive (Bloomberg)
International Monetary Fund Managing Director Christine Lagarde said a political agreement on the U.S. budget should be comprehensive because a minimal deal would fail to provide certainty for investors. Markets would sink without measures to avoid more than $600 billion in spending cuts and tax increases due to come into force next year, Lagarde said, according to a transcript of a taped interview for today’s “CNN’s State of the Union” program. Still, an agreement that would only extend tax cuts for the middle class without addressing spending or entitlements would be insufficient to reassure the rest of the world, she said. “I don’t think that is enough because there is still that degree of uncertainty that fuels doubt, that prevents investors, entrepreneurs, households from making decisions, because they don’t know what tomorrow will be,” Lagarde said when asked about such an option. “It would be much better to actually have a more comprehensive approach and to deal with all the issues.”
U.S. House Speaker John Boehner and President Barack Obama appear no closer to a budget agreement with three weeks left to avert the so-called fiscal cliff. Obama this week insisted that no deal is possible without letting income tax rates rise for high earners, while Boehner said the administration needs to get “serious” about spending cuts. Lagarde, who at the IMF helm has been consumed by the European debt crisis, said the turmoil there is less of a risk for the U.S. economy than the fiscal cliff. The Washington-based IMF expects U.S. growth of about 2.1 percent next year, and no growth without a broad ranging fiscal agreement, she said. “The real threat that we have at the moment is really here with us,” Lagarde said. “We can be our own best friend or our own best enemy.”

China’s Factory Output Tops Forecasts as Rebound Picks Up (Bloomberg)
China’s industrial output and retail sales exceeded forecasts last month while inflation rebounded from a 33-month low in signs the economic recovery is accelerating. Factory production climbed 10.1 percent in November from a year earlier, the National Bureau of Statistics said today in Beijing, compared with the 9.8 percent median estimate of analysts surveyed by Bloomberg News. Retail sales growth accelerated to 14.9 percent, while the consumer price index rose 2 percent from a year earlier. Today’s reports may reassure China’s new leadership under Communist Party chief Xi Jinping that growth in the world’s second-largest economy, which has slowed for seven quarters, will exceed the government’s target this year. The data may also reduce the odds of additional fiscal or monetary easing to support expansion.
“The Chinese economy is now in a sweet spot and can stay in the sweet spot” through the first half of 2013, Lu Ting, head of Greater China economics at Bank of America Corp. in Hong Kong, said in a note today. “The current macro backdrop should bolster asset prices from equities to commodities.” The nation’s benchmark stock gauge, the Shanghai Composite Index, rose 4.1 percent last week, the most in a year, on expectations the recovery will gather pace and as the ruling Politburo signaled an increased focus on urban development.

China Rebounding as Xi Confronts 8.1% Unemployment Rate: Economy (Bloomberg)
China’s factory output and retail sales topped forecasts last month in signs that an economic recovery is accelerating, improvements that may pare a jobless rate newly estimated at almost double the official figure. Industrial production climbed 10.1 percent in November from a year earlier and retail sales growth accelerated to 14.9 percent, while inflation was 2 percent, the statistics bureau said yesterday. Trade data is due today. The urban unemployment rate exceeded 8 percent this year, a central bank-backed research center said yesterday in Beijing, citing a survey. China’s economic revival and inflation running at half the pace of this year’s target may help the Communist Party’s new leadership maintain public support after a once-a-decade power transition. Xi Jinping, the party chief who last week retraced a 1992 tour by Deng Xiaoping that spurred economic opening, faces a wealth gap that is now 50 percent higher than a risk level for social unrest, according to the same survey.
“China’s economy has bottomed and is rebounding, with expansion likely to reach 8 percent this quarter,” said Ren Xianfang, a Beijing-based analyst with IHS Global Insight. “A stabilizing economy is a prerequisite for the new leadership to push reform and tackle social problems such as the public discontent about the widening wealth gap.” The MSCI Asia Pacific Index rose 0.1 percent as of 9:54 a.m. in Tokyo.

China Survey Shows Wealth Gap Soaring as Xi Pledges Help  (Bloomberg)
China’s wealth gap is now 50 percent higher than a risk level for social unrest, according to a central bank-backed survey, underscoring new Communist Party chief Xi Jinping’s warning that corruption may endanger its rule. The Gini coefficient, an index measuring income inequality, was 0.61 in 2010, based on a survey of 8,438 households by the Survey and Research Center for China Household Finance, a body set up by the Finance Research Institute of the People’s Bank of China and Southwestern University of Finance and Economics. The survey also estimated the urban jobless rate in July 2012 was 8.05 percent, almost double the official figure. The ruling Communist Party pledged during a once-a-decade power transition last month to narrow the gap between rich and poor and address corruption that’s fueling discontent in the world’s second-biggest economy.
Reducing inequality is one of the main challenges facing China, the World Bank said in a February report that outlined policies to help the nation make the transition to a high-income country. “China’s wealth gap is so prevalent between regions, sectors, and urban and rural that it’s impossible to see a meaningful decline in the Gini coefficient in the short term,” Gan Li, director of the Chengdu-based center and a professor at Texas A&M University in College Station, Texas, said at a briefing in Beijing today. “Depending on market forces alone can’t resolve the gap and China must change the structure of income distribution and rely on massive fiscal transfers to narrow such a yawning disparity.”

Xi Travels to China’s Guangdong Echoing Deng Xiaoping 1992 Visit (Bloomberg)
Xi Jinping visited the southern province of Guangdong in his first trip since taking over the Communist Party, drawing parallels to a 1992 tour by paramount leader Deng Xiaoping that spurred economic opening. The visit included stopping Dec. 8 to lay a wreath at a statue of Deng built in the city of Shenzhen to commemorate the late leader’s visit two decades earlier, according to footage broadcast by Phoenix Television. Xi was shown telling members of his entourage, which Phoenix said included retired officials who had accompanied Deng on his trip, that China’s reforms were correct and must continue. Xi, 59, who succeeded Hu Jintao as the Communist Party’s general secretary last month, confronts economic growth this year forecast to be the lowest since 1999. The trip may signal that his tenure will follow that of Deng, whose 1992 visit to Guangdong was credited with helping rekindle China’s push to overhaul its economy after growth plummeted following the 1989 Tiananmen Square crackdown.
“Now is the time to remind people that only by continuing the Deng-style reform can China continue to cross the river by touching on the next stone,” said Huang Jing, a political science professor at the National University of Singapore, in reference to a phrase Deng made famous at the outset of his push to open China’s economy starting in 1978. Deng, who oversaw China’s economic rise after Mao Zedong’s death in 1976, championed the idea of testing policies locally and adopting them more broadly if they succeeded.

Japan Sinks Into Technical Recession With Two Contractions (Bloomberg)
Japan unexpectedly maintained its estimate for the economy’s contraction in the third quarter, against forecasts for a smaller drop, underscoring opposition calls for stronger measures to stoke demand. Gross domestic product shrank an annualized 3.5 percent in the three months through September, the Cabinet Office’s second estimate showed in Tokyo today, matching a preliminary reading. The median estimate of 21 economists surveyed by Bloomberg News was for a 3.3 percent drop. The government revised down the previous quarter’s figure to a annualized 0.1 percent contraction, matching the textbook definition of a recession. The figures add to evidence that the world’s third-largest economy will shrink again this quarter as exports fall and domestic demand stays weak. Opposition leader Shinzo Abe, whose party is leading in polls to win national elections on Dec. 16, has called for more fiscal stimulus and “unlimited” monetary easing to boost growth.
“There’s almost no doubt that Japan’s economy will contract again this quarter,” Yoshimasa Maruyama, chief economist at Itochu Corp. (8001) in Tokyo, said before the report. “Exports and consumer spending remain weak, and companies may find it difficult to increase investment in this environment.” The yen was trading at 82.58 per dollar at 9:15 a.m. in Tokyo after touching 82.64, an eight-month low, earlier in the day. The Nikkei 225 Stock Average was 0.4 percent higher, heading for its highest close since April after U.S. and Chinese data showed signs of recovery in the world’s two biggest economies.

Abe Says Japan Sales Tax Increase Depends on April-June Economy (Bloomberg)
Japan’s Liberal Democratic Party Leader Shinzo Abe said he would decide whether to increase a sales tax next year based on economic conditions in the second quarter. “It’s impossible to raise the tax if deflation deepens,” Abe said during a Fuji television program today. A decision will be made after data on economic conditions from April to June become available next August, he said. Polls show the LDP, the largest opposition party, is on track to return to power it lost in 2009 after the Dec. 16 election, with an absolute majority in the Diet’s lower house. Abe, in line to become prime minister, has called for “unlimited” monetary easing to end more than a decade of falling prices. Japanese Prime Minister Yoshihiko Noda won parliamentary approval in August for his bill to raise the country’s sales tax for the first time in 15 years.
The bill raises the tax to 8 percent in April 2014 and to 10 percent in 2015, and a clause allows for implementation to be canceled based on an assessment of economic conditions. The last sales tax increase in 1997 contributed to pushing the economy into a 20-month recession, costing then-premier Ryutaro Hashimoto his job.

Italy Vote Will Test EU Nobel Winners After Greek Buyback (Bloomberg)
The imminent end of Italian Prime Minister Mario Monti’s government threatens to open a new front in Europe’s crisis fight before a year-end summit, as Greece wraps up a six-month effort to secure a new bailout payment. European Union leaders, gathering in Oslo today to collect the Nobel Peace Prize, were set to check an item off their to-do list with the completion of a 10 billion-euro ($13 billion) Greek debt buyback. At the same time, former Italian Prime Minister Silvio Berlusconi’s pledge to topple Monti with his German-skeptic, anti-austerity message may rattle investors. Greece is using bailout funds to repurchase bonds with a face value of about 30 billion euros in a move that EU leaders said puts the nation on the path to debt sustainability. In Italy, where 10-year bond yields widened last week for the first time in nearly a month, Monti said Dec. 8 he will resign due to parliamentary opposition from Berlusconi and his allies, who’d previously backed the government.
“The underlying cracks within the euro zone are actually widening,” Georg Grodzki, head of credit research at Legal & General Investment Management in London, which has about $290 billion of bond funds, said in an interview yesterday. “Investors will be reading Italian politicians’ lips very, very closely.”

Italian Bonds Decline as Berlusconi Threatens Government (Bloomberg)
Italian 10-year government bonds posted their first weekly drop in four after former Premier Silvio Berlusconi threatened to withdraw his party’s support for Prime Minister Mario Monti’s coalition government. Declines yesterday pushed the yield to the most since Nov. 28 as Berlusconi’s top political deputy called for an “orderly end” to Monti’s government, saying the administration failed to develop a strategy to halt the recession. Germany’s two-year notes advanced amid speculation the European Central Bank will cut interest rates after a report yesterday showed the country’s industrial production declined in October. Finnish and Dutch two-year yields fell below zero yesterday. The drop in Italian bonds “gives us a good clue as to how much the market doesn’t like the idea of the politicians being back in power,” said Marc Ostwald, a rates strategist at Monument Securities Ltd. in London. There may be “a drift higher in yields,” he said.
Italian 10-year yields rose three basis points, or 0.03 percentage point, to 4.53 percent at 5 p.m. London time yesterday, after being as high as 4.65 percent. The 5.5 percent bond due November 2022 dropped 0.23, or 2.30 euros per 1,000- euro ($1,294) face amount, to 108.11. German yields fell as three officials with knowledge of ECB deliberations said a majority of policy makers were open to a rate cut. The central bank lowered growth forecasts this week.

Greece Is Close to Reaching Debt Buyback Target, Official Says (Bloomberg)
Greece is near to reaching its target in a buyback of sovereign debt that will unlock aid from the International Monetary Fund and the European Union, according to a Greek government official. The amount offered in the buyback of Greece’s bonds is close to 30 billion euros, the official at the Finance Ministry said on condition of anonymity, referring to the face value of the securities. The transaction went “very well,” Prime Minister Antonis Samaras told reporters in Munich late yesterday after meeting leaders of the German state of Bavaria. Domestic and overseas investors offered to sell back to Greece as much as 27 billion euros of their holdings of the nation’s bonds, state-run NET TV reported. Greek banks submitted offers of around 10 billion euros, while foreign investors, including hedge funds, offered as much as 16 billion euros, Kathimerini newspaper said.
Greece is using a 10 billion-euro loan from Europe’s bailout fund to repurchase debt it sold earlier this year and secure funds that have been blocked since June as the government tries to get its bailout program back after two elections and a deepening recession. The buyback was part of a package of measures approved by euro-area finance ministers on Nov. 27 to lower the nation’s debt to 124 percent of gross domestic product by 2020 from a projected 190 percent in 2014.

20121210 1001 Global Commodities Related News.

Speculators Cut Bullish Bets as U.S. Talks Stall: Commodities (Bloomberg)
Investors cut bullish commodity bets for the first time in three weeks as U.S. lawmakers appeared no closer to an agreement to avert more than $600 billion in automatic tax increases and spending cuts and Europe cut its growth outlook. Speculators and money managers decreased net-long positions across 18 U.S. futures and options by 3.4 percent to 898,380 contracts in the week ended Dec. 4, U.S. Commodity Futures Trading Commission data show. Gold holdings fell 25 percent, the biggest drop since March, as Goldman Sachs Group Inc. said the longest winning streak in at least nine decades will peak next year. Wheat bets fell for the second time in three weeks.
The Standard & Poor’s GSCI Spot Index of 24 raw materials tumbled 2.6 percent last week, the most since September. U.S. House Speaker John Boehner said Dec. 7 that it had been a “wasted week” in talks with President Barack Obama to avoid the so-called fiscal cliff. The European Central Bank said a day earlier that it’s now expecting a contraction instead of growth next year, and President Mario Draghi said the region won’t start to emerge from the slump until the second half of 2013. “There’s an overriding fear of the fiscal cliff,” said Jeffrey Sica, who helps oversee more than $1 billion of assets as the president and chief investment officer at Sica Wealth Management LLC in Morristown, New Jersey. “One of the main causes for the selloff is we have this incredible discrepancy regarding growth in general. Not only growth in the U.S., but also growth in Europe and Asia.”

Wheat Market Recap Report (CME)
March Wheat finished down 1 at 861, 3 3/4 off the high and 8 1/4 up from the low. May Wheat closed down 3/4 at 870 1/4. This was 8 1/2 up from the low and 3 1/2 off the high.
March Chicago and KC wheat traded slightly lower on the day but managed to hold up rather well against sharp declines in corn and soybeans. A better than expected jobs report sent the US Dollar higher but negative political rhetoric in regards to yearend tax reform kept outside markets shaky. Light rainfall moved across Illinois, Indiana, Ohio, and Pennsylvania today which should help soil conditions. The updated Drought Monitor showed dry conditions spreading east into Illinois, southern Indiana, Kentucky, and Arkansas. Extreme drought conditions are showing up in areas of the southeast and Carolinas. Good precipitation from December through April will be needed. The west remains extremely dry with little to no relief in sight. Additional downside was due to profit taking as some expect export demand could be slashed in next week's USDA report which could increase the domestic carryout significantly. Some in the trade expect a modest uptick of just over 710 million bushels vs. 704 currently.
March Oats closed down 6 3/4 at 391 1/4. This was 3 3/4 up from the low and 10 3/4 off the high.

Corn Market Recap for 12/7/2012 (CME)
March Corn finished down 14 1/4 at 737 1/4, 15 1/2 off the high and 2 1/4 up from the low. May Corn closed down 13 3/4 at 739 1/4. This was 2 1/2 up from the low and 15 off the high. March corn traded sharply lower into the closing bell following very disappointing export demand data released yesterday. Profit taking was noted and the US dollar was strong on the day which pressured the broader commodity market. Many analysts are now cutting export demand in next week's USDA report which could mean a slight uptick in the crop year carryout to just over 660 million bushels vs. current estimates of 647. This would still be the tightest carryout since 1995/96. Early support was linked to flooding in Argentina but rainfall will come to an end today. A drier trend will begin over the weekend which will help progress planting in some areas. Argentina corn planting was pegged at 55% complete vs. 69% last year.
Overall, Brazil conditions are ideal with rain and sunshine and temperatures are not expected to rise to above normal levels. January Rice finished down 0.045 at 15.265, 0.145 off the high and equal to the low.

Recap Energy Market Report (CME)
January crude oil prices trended lower throughout the US trading session and registered an inside day range in the process. Crude oil rallied to its high of the session in response to US jobs data that came in above expectations. While that seemed to bolster the case for an economic turnaround, a disappointing consumer sentiment reading and gains in the US dollar soured that early optimism. January heating oil registered a new low for the decline this morning, falling to its lowest level in more than four months. January crude oil ended the week at the lower end of the nearly $5 range and down 3.3%.

Oil Advances as China Rebound Accelerates Before OPEC Meeting (Bloomberg)
Oil rose from the lowest level in three weeks in New York after reports showed China’s economy improved last month and crude processing climbed to a record. OPEC meets in Vienna this week to discuss its production quota. Futures advanced as much as 0.3 percent after falling the past four days. China’s oil refining climbed 9.1 percent in November from a year ago to 41.6 million metric tons, the National Bureau of Statistics in Beijing said yesterday. Industrial production jumped 10.1 percent and retail sales increased 14.9 percent. The Organization of Petroleum Exporting Countries meets on Dec. 12. Saudi Arabia is content with current prices, the country’s petroleum minister said last week. “The Saudis don’t want prices to go up much from here,” Robin Mills, the head of consulting at Dubai-based Manaar Energy Consulting and Project Management, said yesterday. “Some members like Iran may want a cut in production, but the oil price is still healthy so it’s difficult for OPEC members to claim there’s oversupply.” Crude for January delivery rose as much as 25 cents to $86.18 a barrel and was at $86.12 in electronic trading on the New York Mercantile Exchange at 11:17 a.m. Sydney time. The contract slid 33 cents on Dec. 7 to $85.93, the lowest close since Nov. 15. Prices slid 3.4 percent last week and are down 13 percent this year. Brent for January settlement gained 38 cents to $107.40 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $21.28 to West Texas Intermediate futures. Economists surveyed by Bloomberg forecast China’s industrial production would increase 9.8 percent and retail sales would gain 14.6 percent. The nation is the world’s biggest crude consumer after the U.S. OPEC will probably leave its group production quota of 30 million barrels a day unchanged, according to a Bloomberg News survey of 18 analysts. “The prices are fine and customers are happy,” Ali Al- Naimi, Saudi Arabia’s petroleum minister, said on Dec. 7.

Copper Has Longest Run of Weekly Gains in 10 Months (Bloomberg)
Copper futures rose, capping the longest run of weekly advances in 10 months, as U.S. payrolls gained more than projected, boosting economic optimism and signaling more metal demand. Employment climbed by 146,000 in November, topping the 85,000 median estimate in a Bloomberg survey of economists, a government report showed today. The unemployment rate fell to the lowest in almost four years. Copper also rose as analysts forecast industrial output will accelerate in China, the world’s top consumer of base metals. “Markets are moving in reaction to the jobs report, and the idea is that we’re finally in the mind-set that things are going to get better” for the economy, Frank Cholly, a senior commodity broker at RJO Futures in Chicago, said in a telephone interview. “There are also signs of growth out of China.”
Copper futures for March delivery rose 0.5 percent to settle at $3.663 a pound at 1:21 p.m. on the Comex in New York. This week, the price advanced 0.4 percent, the fourth straight gain and the longest rally since Feb. 3. The U.S. is the second- biggest consumer of the metal. Chinese industrial-production growth probably accelerated for the third straight month in November to 9.8 percent from a year earlier, while retail sales probably rose more than 14 percent, the most since March, according to median estimates in Bloomberg News surveys before data due on Dec. 9. On the London Metal Exchange, copper for delivery in three months climbed 0.4 percent to $8,035 a metric ton ($3.64 a pound). Aluminum, zinc, nickel and lead rose, and tin declined.

Silver Market Recap Report (CME)
The March silver contract forged an outside day up but the upside action was limited and it wasn't sustained. Silver was buffeted by the ebb and flow fiscal cliff sentiment throughout the session, but silver was generally lifted off the flow of US scheduled data. As suggested in the gold coverage today, a nearing to the end of the Lame Duck Congress on December 14th could serve to increase the volatility in the coming week in silver and other physical commodity markets. All things considered silver should have cheered the flow of US data as that at least partially countervails the new found slowing fears in Europe.

Gold Market Recap Report (CME)
A huge range today in gold shows a market that remains in the crosshairs of a number of technical and fundamental crossroads. Clearly gold was undermined into the payroll reports but clearly gold was lifted in the wake of better than expected US scheduled data flows. However, gold and other physical commodity markets weren't able to embrace a full on "risk-on" environment, perhaps because negative talk from the Fiscal cliff battle countervailed the positives from the jobs sector. In fact, considering the potential negative drag from the east coast storm, one might suggest that the US economy is holding together despite major negative influences. With February gold at the low today, sitting as much as $116 an ounce below the October highs, any clearing of the fiscal cliff cloud ahead, could be seen as a powerful bullish tonic for gold and other physical commodity markets. On the other hand, a nearing of the end of the lame duck congressional session, could serve to increase the volatility in both directions next week.

20121210 1109 Soy Oil & Palm Oil Related News.

ITS CPO export down 2.8% to 504,302 tonnes for the period of 1~10 Dec 2012.

Soybean Complex Market Recap (CME)
January Soybeans finished down 19 at 1472 1/4, 26 off the high and 2 1/4 up from the low. March Soybeans closed down 14 at 1472. This was 2 1/2 up from the low and 21 3/4 off the high.
January Soymeal closed down 7.8 at 442.9. This was 0.9 up from the low and 10.0 off the high.
January Soybean Oil finished down 0.07 at 51.13, 0.25 off the high and 0.37 up from the low.
January soybeans traded sharply lower on the day on weaker outside markets, profit taking, and pressure that spilled over from a sharply lower corn market. Demand from China continues to add a bullish tilt to the market place and the USDA announced this morning that exporters sold 115,000 tonnes of soybeans to China for this crop year. Cash markets are firm in the Midwest and basis has surged in the PNW this week on rumors that up to 6 cargos of soybeans have been sold to China. The market is looking ahead to a large South American crop at the moment which could provide pressure long term. Rainfall in Argentina will back off today and a drier pattern will persist into next week. This should help move the soybean planting pace which is currently estimated at 54% vs. 69% last year. Weather in Brazil remains favorable with a good mixture of light rainfall and sunshine. The USDA currently has Brazil soybean production at 81 million tonnes but some believe the USDA may increase production on next week's report to 81.50 or 82 million tonnes.

EDIBLE OIL: Malaysian palm oil futures closed flat but notched their biggest weekly loss in almost a month amid an uncertain outlook where record high stocks are weighing on prices at the same time as expectations are rising for a pick up in demand. (Reuters)

VEGOILS-Palm oil flat, posts biggest weekly loss in nearly a month
Fri Dec 7, 2012 5:23am EST
(Updates prices, adds details on Commodities Ministry briefing)
    * Benchmark prices set for 3 percent weekly loss
    * Stocks weigh on sentiment, but traders looking at strong
demand as well
    * Biofuel margins on the rise, supporting market

    By Niluksi Koswanage
    KUALA LUMPUR, Dec 7 (Reuters) - Malaysian palm oil futures
closed flat on Friday, but notched their biggest weekly loss in
almost a month amid an uncertain outlook where record high
stocks are weighing on prices at the same time as expectations
are rising for a pick up in demand.
    Palm oil futures have fallen almost 28 percent so far this
year on record stocks and concerns that the euro zone debt
crisis would reining in global growth.
    "Palm oil is stuck," said a trader with a commodities
brokerage in Kuala Lumpur. "It is undervalued as biodiesel
demand has kicked in because of the high margins, but it also
cannot go higher because of high stocks."
    The benchmark February contract on the Bursa
Malaysia Derivatives Exchange settled up 0.04 percent to 2,296
ringgit ($750) per tonne in see-saw trade. The contract
recorded a decline of about 3 percent for the week, its third
straight weekly loss and the steepest fall since Nov. 11.
    Total traded volumes stood at 34,886 lots of 25 tonnes each,
compared to the usual 25,000 lots.
    Malaysian palm oil stocks probably hit a record 2.58 million
tonnes in November, a Reuters survey showed ahead of official
data on Monday, helping the tropical oil widen its discount to
competing Argentine soyoil to $360 per tonne.
    The discount remains unsustainable and will narrow as more
demand shifts to palm oil in the next few months, especially
with wet weather delaying soy plantings and curbing yields in
the world's biggest soyoil exporter Argentina.
    Traders are watching for cargo surveyor data on Malaysia's
Dec. 1-10 palm oil exports on Monday to confirm strong demand as
No.2 edible oil buyer China stocks up before stricter quality
controls on the refined grades come into effect on Jan. 1.
    In addition, export data may be even stronger as Malaysian
planters scramble to exhaust an annual tax-free export quota
totalling 3.5 million tonnes that is set to expire at the end of
    Malaysia's Commodities Ministry will hold a briefing for
refiners on Monday to get feedback on the government's plan to
cut crude palm oil export taxes and completely dismantle the tax
free export quota for the grade, traders said.
    Some planters are asking for the quota to continue until
stocks fall below 2 million tonnes.
    Brent crude steadied above $107 per barrel on Friday, but
prices were headed for their biggest weekly loss in more than a
month on worries about the euro zone economy and a looming
fiscal crisis in the U.S., the world's top oil consumer.
    Despite the decline in oil markets, Singapore gas oil
GO-SIN sells at about $931 per tonne -- a 37 percent premium
to Indonesian crude palm oil used in biofuel.
    In palm oil's competing markets, U.S. soyoil for December
delivery edged up 0.2 percent in Asian trade. The most
active May 2013 soybean oil contract on the Dalian
Commodity Exchange ended almost flat.