OIL: Crude falls 2nd day on concern about U.S. finances
SINGAPORE, Dec 8 (Reuters) - Oil fell for a second day on Wednesday on concern about the long-term health of U.S. finances and after an industry report showed a larger-than-expected increase in the country's gasoline stockpiles.
A jump in U.S. bond yields continued to boost the dollar after the administration of President Barack Obama proposed to extend Bush-era tax cuts, prompting oil investors to cash in after prices jumped to a 26-month high near $91 on Tuesday.
COMMODITY MARKETS: Oil, gold reverse gain on dollar, US tax caution
NEW YORK, Dec 7 (Reuters) - Crude oil, gold and copper retreated from highs on Tuesday as cautious traders cashed in gains following a dollar rally and amid concerns over the potential long-term effects of a U.S. tax-cut deal.
"Gold traders were looking for any excuse to sell and the rally in the dollar gave them one," said Adam Klopfenstein, senior market strategist with Lind-Waldock.
GLOBAL MARKETS: US bond yields surge, stocks erase gains
NEW YORK, Dec 7 (Reuters) - U.S. government bond prices fell sharply on Tuesday amid worries over the fiscal outlook, while Wall Street stocks ended up only slightly on concern about the impact of higher long-term rates.
"This reduces revenue on top of extending jobless benefits, which is bad for deficits. In the short run this is good news, but two to three years down the road foreign buyers of U.S. Treasuries may start to balk," said David Carter, chief investment officer at Lenox Advisors in New York.
Russia May Extend Grain Export Ban If Weather Unfavorable :Official (Source: CME)
Russia may extend a ban on grain exports if weather is unfavorable for crop production, Russia's trade representative in Australia, Yury Aleshin, said. "It all depends on weather, we are not interested in artificial obstacles to trade but just compelled to do it," Aleshin said on the sidelines of a grains conference. Russia has banned grain exports until the end of next June due to the worst drought in the country's history during the harvest. Russia currently has sufficient wheat to meet local demand, and providing freight rate concession to encourage movement of grains from regions with surpluses to those with deficits and keep local prices under control. Aleshin added that the country may have to import a total of 3 million metric tons of feed grains such as barley and corn for animal feed
China rate rise talk builds as loans, inflation rise
BEIJING, Dec 7 (Reuters) - China is likely to raise interest rates in the coming days in a demonstration of the government's resolve to tame inflation, an official newspaper said on Tuesday. In a banner headline across its front page, the China Securities Journal said this weekend offered a "sensitive window" for a rate rise, which would be the country's second after a surprise increase in October, the central bank's first rate hike since 2007.
Japan corp mood tumbles, BOJ tankan likely bleak -poll
TOKYO, Dec 7 (Reuters) - The mood among Japanese manufacturers tumbled in December and their optimism is seen vanishing in three months, a Reuters poll showed, underscoring mounting uncertainty over an economy already struggling with waning demand at home and abroad. Companies complained about rises in raw materials prices and difficulty in passing on costs to customers as a strong yen and global slowdown hurt profits, according to the monthly poll taken Nov. 17-Dec. 2 of 400 big firms, of which 220 responded.
German industry powers ahead, pulls away from peers
BERLIN, Dec 7 (Reuters) - German manufacturing orders rose in October, official data showed on Tuesday, rebounding despite a fall in euro zone demand as Europe's largest economy pulls further away from its peers. Seasonally and price-adjusted orders rose 1.6 percent on the month, the Economy Ministry said, just missing the mid-range forecast in a Reuters poll of economists for a 2.0 percent rise.
PRECIOUS-Gold hits record for second day in a row
LONDON, Dec 7 (Reuters) - Gold hit record highs for a second successive day on Tuesday, driven by fund buying ahead of the end of the year, the prospect of more U.S. monetary easing and investor nervousness over the European debt crisis. Silver hit a 30-year high for the seventh consecutive day, driven by a weakening dollar and a push into commodities by the investment community ahead of the end of the year. Gold in euros also hovered near record highs as tension on the bond markets ran high.
FOREX-Euro rises on Irish optimism; riskier assets rally
LONDON, Dec 7 (Reuters) - The euro rose on Tuesday on optimism Ireland will pass an austerity budget later in the day, though support was expected to be fleeting, with the single currency still dogged by structural weaknesses in the euro zone. The dollar slipped against a currency basket after comments from Fed Chairman Ben Bernanke stoked expectations of prolonged U.S. monetary easing measures, supporting appetite for risk.
Wheat hits 4-month top as rains hurt Australia crop
SINGAPORE, Dec 7 (Reuters) - U.S. wheat futures climbed to four-month highs after Australia said heavy rains had weakened the quality of its crop even as it forecast record production. "There's no way in the world we'll hit that forecast," said Jonathan Barratt, managing director at Commodity Broking Services in Sydney, who is only expecting 2010-11 wheat output to reach 24 million tonnes.
Cocoa futures hits 4-month high on Ivory Coast turmoil
ICE cocoa futures hit a four-month high in early trade as investors were cautious due to the uncertainty in top grower Ivory Coast following its disputed elections. Former South African leader Thabo Mbeki failed on Monday to settle an election row between Ivory Coast's presidential claimant Alassane Ouattara and incumbant Laurent Gbagbo, but appealed to both for a peaceful solution.
GLOBAL MARKETS-U.S. tax deal lifts stocks, euro up on Ireland
LONDON, Dec 7 (Reuters) - Global equities advanced on Tuesday after a compromise deal to extend expiring U.S. tax cuts, though the euro zone's debt crisis and speculation over a possible interest rate rise in China kept them in check. The euro rose on optimism that Irish lawmakers will pass its toughest ever budget later in the day. "The market is benefiting from the compromise in the U.S. on the extension of the Bush tax cuts and to a lesser extent from the probable voting (through) of the Irish (budget)," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.
Oil slips from 26-mth high on China rate increase report
SINGAPORE, Dec 7 (Reuters) - Oil fell from a 26-month high on reports that China, the world's second-largest crude user, will raise interest rates as soon as this weekend, dampening investor enthusiasm for commodities driven by Asian demand. "China interest rates are a driver in the decline of the oil market," said Ken Hasegawa, a commodity derivatives manager at Japan's Newedge brokerage.
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