Monday, March 19, 2018

Market & Commodities Related News

45 U.S. trade groups urge Trump to avoid tariffs against China - Reuters News
19-Mar-2018 07:44:47 AM
By Pete Schroeder
WASHINGTON, March 18 (Reuters) - Forty-five U.S. trade associations representing some of the largest companies in the country are urging President Donald Trump not to impose tariffs on China, warning it would be "particularly harmful" to the U.S. economy and consumers.
The organizations said in a letter sent to Trump on Sunday that potential tariffs on China would raise prices on consumer goods, kill jobs and drive down financial markets.
The letter marks the latest in a growing rift between Trump and the business community on trade policies, as the president has begun to take more aggressive steps he says are needed to protect domestic industry.
"We urge the administration not to impose tariffs and to work with the business community to find an effective, but measured, solution to China's protectionist trade policies and practices that protects American jobs and competitiveness," the groups wrote.
"Tariffs would be particularly harmful," they said.
The groups called on Trump to work with trade allies to push for changes to China's policies. The business groups said while they had serious concerns about China's approach to trade, unilateral tariffs by the United States would only separate the country from allies, and encourage them to replace the U.S. business presence in China when Beijing retaliates.
Trade associations publicly pushing back include the U.S. Chamber of Commerce, the National Retail Federation and the Information Technology Industry Council.
The Trump administration is said to be preparing tariffs against Chinese information technology, telecoms and consumer products in an attempt to force changes in Beijing's intellectual property and investment practices.
The Republican president recently announced plans to impose tariffs on certain steel and aluminum imports, despite opposition from some business sectors. 
The groups also called on Trump to allow industry experts to comment on the economic impact of any changes in trade policy before the measures take effect.
"We urge the administration to take measured, commercially meaningful actions consistent with international obligations that benefit U.S. exporters, importers, and investors, rather than penalize the American consumer and jeopardize recent gains in American competitiveness," they said.

UPDATE 3-Oil prices fall as increased U.S. drilling points to higher output - Reuters News
19-Mar-2018 03:48:06 PM
• U.S. rig count rises back to 800 -Baker Hughes
• Middle East tensions prevent further price drops
• Falling Venezuelan output seen as risk to supply 
Adds Rosneft output figures, comment, updates prices
By Henning Gloystein
SINGAPORE, March 19 (Reuters) - Oil prices fell on Monday as increased drilling in the United States pointed to more output, raising concerns about a return of oversupply.
U.S. West Texas Intermediate (WTI) crude futures were at $62.14 a barrel at 0739 GMT, down 20 cents, or 0.3 percent, from their previous close.
Brent crude futures were at $65.99 per barrel, down 22 cents, or 0.3 percent.
Monday's price falls in part reversed increases last Friday, which came on concerns over tensions in the Middle East.
On a simple supply versus demand basis, however, oil markets are facing the possibility of a renewed glut after being in a slight deficit for much of last year.
U.S. drillers added four oil rigs in the week to March 16, bringing the total count to 800, the weekly Baker Hughes drilling report said on Friday.
"Surging U.S. production will hamper exponential growth in crude oil prices," Singapore-based brokerage Phillip Futures said on Monday.
The U.S. rig count, an early indicator of future output, is much higher than a year ago as energy companies have boosted spending. 
Thanks to the high drilling activity, U.S. crude oil production has risen by more than a fifth since mid-2016, to 10.38 million barrels per day (bpd), pushing it past top exporter Saudi Arabia.
Only Russia produces more, at around 11 million bpd, although U.S. output is expected to overtake Russia's later this year as well. 
Soaring U.S. output, as well as rising output in Canada and Brazil, is undermining efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to curb supplies and bolster prices.
Amid Russia's efforts to restrain output, Russian oil giant Rosneft said on Monday that its fourth quarter 2017 liquid hydrocarbon production reached 56.51 million tonnes, raising its full-year output by 7.3 percent to 225.5 million tonnes, or 4.53 million bpd. 
Many analysts expect global oil markets to flip from slight undersupply in 2017 and early this year into oversupply later in 2018. 
"Let's face it, there is still too much oil," said Matt Stanley, a fuel broker with Freight Investor Services in Dubai in a note.
One risk seen to supplies, however, is Venezuela.
The International Energy Agency said last week that Venezuela, where an economic crisis has cut oil production by almost half since early 2005 to well below 2 million bpd, was "clearly vulnerable to an accelerated decline", and that such a disruption could tip global markets into deficit despite soaring U.S. output. 
(Reporting by Henning Gloystein; editing by Joseph Radford and Richard Pullin)

PRECIOUS-Gold falls for fourth day as dollar stays firm ahead of Fed meeting - Reuters News
19-Mar-2018 04:01:13 PM
• Investors eye Fed policy projections
• Platinum touches lowest in over 2 months
(Updates prices)
By Eileen Soreng
March 19 (Reuters) - Gold prices extended losses into a fourth session on Monday and hit a more than two-week low, with the dollar remaining supported as investors expect the U.S. Federal Reserve to raise interest rates this week.
Spot gold was down 0.2 percent at $1,310.03 per ounce at 0735 GMT. Prices fell to $1,307.51 earlier in the session, their lowest since March 1.
U.S. gold futures for April delivery dropped 0.2 percent to $1,309.40 per ounce.
"I think the overall economic recovery is good enough for the (U.S.) central bank to consider a faster pace of normalization of monetary policies," said Mark To, head of research at Hong Kong's Wing Fung Financial Group.
A two-day Federal Open Market Committee (FOMC) meeting begins on Tuesday, with the U.S. central bank expected to hike interest rates for the first time this year.
"It is somehow expected and is already priced in the market so I stick to my prediction that precious metals, with gold included, are going to have range-bound trading, unless something really surprising happens," said To.
With a 25 basis point rate hike seen as a done deal, one key focus is on whether Fed policy makers forecast four rate hikes this year instead of the three they had projected at December meeting.
Gold is highly sensitive to rising U.S. interest rates, becoming less attractive to investors as it does not bear interest.
The dollar inched higher against a basket of major peers on Monday as traders braced for the Fed meeting and as the increased threat of trade protectionism kept markets on edge. 
The dollar index was up 0.1 percent at 90.302. On Friday, it hit a two-week high near 90.38, following strong U.S. economic data. 
"Potential market headwinds from the underlying (susceptibility) to risk-appetite, heightened (geo) political tensions, inflation concerns, Russia tensions, to name a few, could help keep the floor on gold prices in check," Stephen Innes, APAC trading head at OANDA, said in a note.
Gold speculators cut their net long position by 16,153 contracts to 145,659 contracts, according to the U.S. Commodity Futures Trading Commission (CFTC) data. This was the smallest net long position since early January.
Among other precious metals, silver was down 0.3 percent at $16.26 per ounce and palladium inched 0.1 percent lower to $993.90 per ounce.
Platinum was 0.5 percent lower at $938.49 per ounce after falling to its lowest since Jan. 3 at $936.50.

UPDATE 1-Speculators cut net long positions in COMEX gold, copper -CFTC - Reuters News
17-Mar-2018 03:51:29 AM
Adds background, details, table
NEW YORK, March 16 (Reuters) - Hedge funds and money managers trimmed their net long positions in COMEX gold and copper contracts in the week to March 13, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.
Speculators raised their net short position in silver futures and options contracts, the data showed.
Gold speculators cut their net long position by 16,153 contracts to 145,659 contracts, according to the CFTC data. This was the smallest net long position since early January.
During the week, spot gold prices slipped as equities rallied after strong U.S. jobs data boosted risk appetite. This shored up expectations that the U.S. Federal Reserve would press ahead with further interest rate rises this year.
Higher interest rates make gold less attractive since bullion does not bear interest.
Speculators trimmed their net long position in copper by 1,419 contracts to 27,357 contracts, the CFTC data showed.
Silver speculators raised their net short position by 5,356 contracts to 16,188 contracts, according to the data.

FCPO Related News.

VEGOILS-Palm supported by weaker ringgit, rising demand outlook - Reuters News

19-Mar-2018 01:12:25 PM

  • Palm hits one-week low of 2,407 rgt/T
  • Softer gains in U.S. soyoil capping palm's gains - Trader

By Emily Chow

KUALA LUMPUR, March 19 (Reuters) - Malaysian palm oil futures edged up in early trade on Monday supported by weakness in the ringgit, its currency of trade, and as traders were bullish about prospects of improving demand.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 0.4 percent to 2,425 ringgit ($620.05) a tonne at the midday break, after falling to a one-week low of 2,407 ringgit earlier in the session.

Trading volumes stood at 22,858 lots of 25 tonnes each at noon on Monday.

"The market is supported in anticipation of better exports... But lower soyoil seems to be checking palm's upside," said a Kuala Lumpur-based trader, referring to soyoil on the U.S. Chicago Board of Trade.

Another trader in Kuala Lumpur added that a slightly weaker ringgit also added to palm's gains, as this makes the edible oil cheaper for holders of foreign currencies.

The ringgit slipped 0.1 percent to 3.9110 against the dollar on Monday afternoon.

Palm oil exports from Malaysia, the world's second largest producer, weakened 2-5 percent in the first half of March versus the corresponding period in February, according to shipment data.

Demand is expected to pick up from regions such as the Middle East, as buyers stock up ahead of Ramadan which begins in mid-May this year.

The Muslim holy month sees devotees break day-long fasts with communal feasting, which incurs higher usage of palm oil for cooking purposes. Buyers usually start increasing purchases of palm oil one to two months ahead of the festivities.

In other related oils, the Chicago Board of Trade's May soybean oil contract rose 0.1 percent, while the May soybean oil on China's Dalian Commodity Exchange fell 0.4 percent.

The Dalian May palm oil contract was also down 0.4 percent.

Palm oil prices are impacted by movements in rival edible oils as they compete in the global vegetable oils market.

Saturday, March 17, 2018

Metals & Agriculture Related News.

PRECIOUS-Gold dips, down for week; market braces for Fed rate hike - Reuters News

17-Mar-2018 01:55:31 AM

  • Gold down 0.8 percent this week
  • Investors braced for U.S. rate hike next week
  • U.S. political uncertainty fuels some safe-haven demand

(Updates prices; adds comment, additional byline, NEW YORK to dateline)

By Renita D. Young and Peter Hobson

NEW YORK/LONDON, March 16 (Reuters) - Gold prices dipped on Friday and were set for their biggest weekly fall in three weeks on pressure from a stronger U.S. dollar and expectations that the U.S. Federal Reserve will raise interest rates next week for the first time this year.

Losses were limited by political tumult in the United States which fueled safe-haven demand for bullion.

A Fed rate hike generally lifts bond yields, making non-yielding bullion less attractive. Higher U.S. interest rates also tend to strengthen the dollar, making gold more expensive for users of other currencies.

Spot gold dipped 0.3 percent, trading at $1,312.36 per ounce by 1:35 p.m. EST (1735 GMT). It was on track to end the week down 0.8 percent.

U.S. gold futures  for April delivery settled down $5.50, or 0.4 percent, at $1,312.30 per ounce.

Gold has tended in recent years to fall before U.S. interest rate hikes and rally afterwards.

"It recovers because the interest rates that we're seeing right now are not negative for gold," added Jeffrey Christian, managing partner of CPM Group.

Technical support for gold was at its 100-day moving average around $1,304, the psychologically important level of $1,300 and the 200-day moving average at $1,290.

Gold prices were supported by deepening U.S. political uncertainty and fears that U.S. tariffs on aluminum and steel could disrupt global trade.

On Thursday, the Washington Post reported that Donald Trump's national security adviser, H.R. McMaster, would become the latest senior official to leave his post. The New York Times said U.S. Special Counsel Robert Mueller had issued a subpoena for documents related to Trump's businesses.

"There is a lot of confusion in the market about what the White House's strategy is on any large macro issues," said Mitsubishi Analyst Jonathan Butler.

"These factors should keep gold above $1,300, but it's more of a holding pattern and a generally supportive environment than something that is going to raise prices significantly."

Bob Haberkorn, senior market strategist at RJO Futures, said gold prices are low relative to other commodities.

A diplomatic crisis between Russia and Britain over the poisoning of a former Russian double agent on English soil underlined gold safe-haven appeal.

Among other precious metals, silver lost 0.5 percent at $16.29 an ounce, poised for a 1.9 percent weekly drop, its largest weekly decline since early February.

Platinum dropped 0.5 percent at $949.10 an ounce, on track for a 1.6 percent weekly decline. Palladium increased 0.7 percent at $993.10 an ounce, ending the week barely changed.



METALS-Copper hits one-week low on dollar and politics; China hopes limit falls - Reuters News

By Maytaal Angel

LONDON, March 16 (Reuters) - Copper hit a one-week low on Friday as the dollar recovered and concerns lingered that U.S. tariffs could provoke a trade war, though hopes for strong growth in China kept losses in check.

The dollar recovered its losses versus a currency basket while Wall Street ticked higher after data showed strong U.S. factory output and improving consumer sentiment, though concerns lingered over turmoil in the U.S. government.

A strong U.S. currency makes dollar-priced metals costlier for non-U.S. investors.

"The demand data and forecasts point to stronger demand, especially in China, so the deficit on the (copper) market is likely to continue this year," said Eugen Weinberg, head of commodities research at Commerzbank.

"The question is whether (this deficit) is not already priced in. We think it is. (Also) we expect through the year a somewhat stronger U.S. dollar."


* LME COPPER: Three-month copper on the London Metal Exchange
 closed 0.5 percent down at $6,888 a tonne, having hit a one-week low of $6,852.

* FED MEETING: ANZ said investors "are likely to remain cautious" ahead of next week's Federal Reserve meeting, at which the U.S. central bank is expected to raise interest rates for the first time this year.

* TRADE WAR: Markets were roiled this week after President Trump ousted Secretary of State Rex Tillerson, viewed as a free trade proponent, and then sought to impose $60 billion of tariffs on Chinese imports.

* OYU TOLGOI: Annual revenue from Mongolia's giant Oyu Tolgoi copper-gold mine fell 22 percent last year, with construction delays leaving it unable to take full advantage of higher prices. 

* CHILE COPPER: Polish copper producer KGHM said it expects daily copper ore output at its Chilean mine Sierra Gorda to increase by 18 percent next year from current levels. 

* CHINESE COPPER OUTPUT: China's refined copper output in January and February rose by 10.3 percent year on year to 1.48 million tonnes, data showed on Friday. 

* BRAZIL ALUMINA: Norwegian aluminium maker Norsk Hydro  has ordered 600 employees at its Brazilian Alunorte alumina refinery to go on temporary holiday to prevent layoffs at the plant. 

* ALUMINIUM INVENTORIES: Deliverable Shanghai Futures Exchange aluminium inventories rose by 87,303 tonnes to a record 934,216 tonnes, data showed on Friday.

* CHINA ALUMINA: Chinese alumina refineries in Henan province may delay the restart of their plants because of rising costs for the raw material bauxite amid supply tightness, research firm Antaike said.

* METALS PRICES: Aluminium ended flat at $2,085, zinc rose 0.8 percent to $3,260, lead closed 1.2 percent down at $2,383, tin dropped 0.1 percent to $21,000 and nickel  finished down 0.1 percent at $13,625.



GRAINS-U.S. wheat drops on U.S. rains forecast; soybeans up - Reuters News

17-Mar-2018 03:44:56 AM

  • Corn follows wheat lower
  • Soybeans rise for second day
  • Rains on Sunday and Monday could aid U.S. wheat

New throughout, updates U.S. market activity to close, adds comments; changes byline, dateline, previously PARIS/SINGAPORE

By Michael Hirtzer

CHICAGO, March 16 (Reuters) - Chicago wheat futures dropped to a 2-1/2-week low on Friday on outlooks for rains by this weekend that should alleviate stress on some crops in the parched U.S. Plains growing region, traders said.

CBOT May contract wheat settled down 11 cents at $4.67-3/4 per bushel, bringing the losses for the week to more than 6 percent - the biggest weekly decline since August.

"They really increased rain chances from yesterday, through overnight and into the morning hours," Midwest Marketing Solutions analyst Brian Hoops said of the weather forecast.

Wheat had fallen below several moving averages on Thursday, triggering selling.

"There's bearish fundamentals and bearish technical action," Hoops added.

Rains on Sunday and Monday will benefit the northeastern half of the Plains wheat belt but will likely miss the main drought areas in southern Kansas and Oklahoma, according to meteorologists and analysts.

At the same time, favorable weather ahead of spring grain sowing in Black Sea producers Russia and Ukraine is bolstering the chances of another large wheat harvest due to good levels of soil moisture, analysts and industry officials said. 

"As far as the Black Sea production looks good, buyers are not too worried about U.S. drought," said one Singapore-based trader who sells wheat to millers across Southeast Asia. "Mills are not going to chase a rally in prices at this stage."

CBOT May corn settled down 4 cents at $3.82-3/4 per bushel, the lowest since March 1. Corn largely tracked losses in wheat in relatively light trading volume.

CBOT May soybeans settled up 8-3/4 cents at $10.49-1/2 per bushel, rising for the second straight session on fund buying linked to expectations of a smaller soy and corn harvest in Argentina due to drought.

The Commodity Futures Trading Commission after the close of trading on Friday said speculative investors as of Tuesday slightly cut their net long in soybean futures and increased their corn net long.

The Rosario Grains Exchange on Thursday cut its estimate of Argentina's soy harvest to 40 million bushels from 46.5 million previously. 

That was also well below the 47 million tonnes forecast by the U.S. Department of Agriculture (USDA) this month.



AG CFTC: Hedge Fund Managers Boost Net Bearish Soy Oil Bets

By Bloomberg Automation

(Bloomberg) -- 

Money managers have increased their bearish soy oil bets by 12,175 net-short positions to 21,221, weekly CFTC data on futures and options show.

  • The net-short position was the most bearish in three weeks
  • Long-only positions fell 4,544 lots to 69,391 in the week ending Mar. 13
    • The long-only total was the lowest in three weeks
  • Short-only positions rose 7,631 lots to 90,612
    • The short-only total was the highest in three weeks

20180317 U.S. Markets & Energy Related News.

US STOCKS-Wall Street advances as financial, energy stocks gain - Reuters News

Updates to early afternoon
By Sruthi Shankar
March 16 (Reuters) - Wall Street's main indexes rose on Friday after strong economic data boosted financial stocks and a jump in oil prices lifted shares of energy companies.
JPMorgan and Bank of America rose nearly 1 percent, helping the S&P financial index gain 0.55 percent.
The top gainer on the S&P 500 was the energy index, which rose 1.2 percent, helped by advances in shares of Exxon and Schlumberger.
"It seems like fundamental backdrop is positive and that is offsetting the turmoil at the White House," Jack Ablin, chief investment officer, Cresset Wealth Advisors, Chicago.
The gains come at the end of a rocky week, dominated by concerns of a trade war with China and political turmoil, which began with the ouster of Secretary of State Rex Tillerson.
"Anything that leans towards protectionism tends to be negative headwind to the markets," said Art Hogan, chief market strategist at B. Riley FBR in New York. "As we hear more rhetoric, the more concerned we get."
The three main indexes are still on track to end the week lower, with the S&P 500 .SPX posting its longest streak of losses in 2018.
At 12:30 p.m. ET, the Dow Jones Industrial Average .DJI was up 0.5 percent at 24,996.84 points. The S&P 500 rose 0.35 percent to 2,756.85 points and the Nasdaq Composite .IXIC was up 0.08 percent at 7,487.59 points.
Economic data showed U.S. factory output jumped 1.1 percent in February. 
Retailers Walmart WMT.N and Home Depot HD.N gained more than 1 percent after the University of Michigan's preliminary reading of consumer sentiment index rose more-than-expected to 102.0.
Adobe Systems ADBE.O was up 3 percent after the Photoshop maker topped analysts' profit and revenue estimates for the seventh straight quarter. 
Micron Technology MU.O rose 2.2 percent after Baird analysts raised price target on the stock by $40 to $100 and Western Digital WDC.N gained 3.5 percent after an upgrade to "outperform". 
Volatility is expected to increase on Friday as investors unwind interests in futures and options contracts prior to their expiration.
Advancing issues outnumbered decliners on the NYSE for a 2.24-to-1 ratio and for a 1.63-to-1 ratio on the Nasdaq.


Oil rises with Wall Street, heads for weekly gain - Reuters News

By Stephanie Kelly
NEW YORK, March 16 (Reuters) - Oil prices rose on Friday, on track for a weekly gain as market participants followed the U.S. stock market higher and looked to cover short bets ahead of a weekend in which the "60 Minutes" news program will air an interview with Saudi Arabia's crown prince.
Brent crude  futures rose 76 cents to $65.88 a barrel, a 1.2 percent gain, by 12:16 p.m. EDT (1612 GMT). West Texas Intermediate (WTI) crude futures for April, which will expire on Tuesday, rose 94 cents to $62.13 a barrel, a 1.5 percent gain.
Earlier both contracts were up over a dollar. 
Saudi Crown Prince "Mohammed bin Salman will be on '60 Minutes' on Sunday comparing Iran's Ayatollah to Hitler, and the battle in Ghouta, Syria, is ramping up," said John Kilduff, partner at investment manager Again Capital in New York. "You can't be short oil over the weekend with all that going on in the region." 
Gains on Wall Street also supported prices as crude futures have recently been moving in tandem with U.S. stock indices. 
Oil was on track for a weekly loss in early trade, but Friday's rise put them on course for a weekly gain. 
On Thursday the International Energy Agency (IEA) said global oil demand is expected to pick up this year but supply is growing at a faster pace, leading to a rise in inventories in the first quarter of 2018. 
The agency raised its forecast for oil demand this year to 99.3 million barrels per day (bpd) from 97.8 million bpd in 2017, and said it expected supply from non-OPEC nations to grow by 1.8 million bpd in 2018 to 59.9 million bpd, led by the United States.
OPEC and other producers have cut output to reduce a global crude glut. Investors will watch U.S. rig count data due at 1 p.m. EDT on Friday. 
"Producers, as we've gone through earnings, are showing that they're going to remain disciplined even with a little more supportive oil price, which we think is healthy for the market," said Matt Sallee, a portfolio manager at Tortoise Capital in Leawood, Kansas.
Sallee added that he expected the data to show a small pickup in rig counts. 
On Wednesday, the U.S. government reported that crude stockpiles in the United States increased by a more-than-expected 5 million barrels.  
Political risk linked to Tehran increased after Rex Tillerson was sacked as U.S. secretary of state in favor of an Iran and North Korea hawk. Saudi Arabia's crown prince said Riyadh would develop nuclear weapons if Iran did so.  


Wednesday, August 30, 2017

20170830 1914 FCPO EOD Daily Chart Study.




FCPO closed : 2706, changed : -7 points, volume : higher.
Bollinger band reading : profit taking upside biased.
MACD Histogram : turned negative, buyer reducing position.
Support : 2700, 2670, 2638, 2600 level.
Resistance : 2735, 2766, 2782, 2800 level.
Comment :
FCPO closed marginally lower with improved volume changed hand today while Dalian palm olein contract and soybean oil futures trading weaker after overnight fall while crude oil price continue to test lower after 2 days declined.
Price drifted between positive and negative zone as traders reducing position ahead of the long weekend holidays with anticipation on weak export data from export cargo surveyor and higher month end inventories.
Daily chart study still suggesting a pullback correction upside biased market development after price tested above higher Bollinger band. A break below 2700 level would see price testing lower level near middle Bollinger band.
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 or sell at break down of middle bollinger band with larger cut loss and profit target.

20170830 1838 FKLI EOD Daily Chart Study.



FKLI closed : 1765.5 changed : +10 points, volume : lower.
Bollinger band reading : pullback correction downside biased.
MACD Histogram : recovering, seller closing position.
Support : 1755, 1751.5, 1746, 1733, 1727 level.
Resistance : 1768, 1777.5, 1787, 1792, 1797.5 level.

Comment :
FKLI recovered higher on expiry after yesterday break down from a 2 weeks range bound congestion ahead of the long holidays with September contract doing about 13 points discount compare to cash market that closed higher.
Major European and Asia indexes also recovered as fear on Nouth Korea missile test recede but the tension between US and North Korea remained the main factor that market players monitor closely in coming week.
From technical view, FKLI daily chart is having a pullback after yesterday oversold below lower Bollinger band within a downside biased market development. Should market continue to recover higher next week back into the previous range bound zone will resulted a false break down but if market break and stay below 1750 level would see market testing lower support.
When to buy : buy at support or correction with quick cut loss and medium profit target.
When to sell : sell at resistance or pullback with quick cut loss and quick profit target.

Friday, January 18, 2013

20130118 1658 Global Markets & Commodities Related News.

STOCKS: European stock index futures pointed to a higher open and Asian shares advanced as encouraging data from the United States and China boosted prospects for the global economy.  Stronger-than-expected data on U.S. housing starts and jobless claims lit a fire under stocks on Thursday, pushing the S&P 500 to a five-year high and its third day of gains. (Reuters)

FOREX: The yen hit a 2-1/2 year low against the dollar as markets positioned for the Bank of Japan to take bold action to tackle deflation at a policy-setting meeting early next week.  (Reuters)


FOREX-Yen hits 2-1/2 year low, bold BOJ easing eyed
SINGAPORE/SYDNEY, Jan 18 (Reuters) - The yen hit a 2-1/2 year low against the dollar as markets positioned for the Bank of Japan to take bold action to tackle deflation at a policy-setting meeting early next week.
"There might be a dip after the BOJ, but the drop could turn out to be surprisingly shallow, and I think from there the direction will be a rise towards 93 yen to 95 yen," Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo said.


China's economy rebounds in Q4, 2012 weakest since 1999 (Reuters)
China's economy regained speed in the final quarter of 2012, pulling out of a post-global financial crisis downturn that produced the slowest year of economic growth since 1999.

Argentina cuts wheat crop view due to bad weather (Reuters)
Argentina will produce 10.1 million tonnes of wheat this season, the agricultural ministry said on Thursday, citing extreme weather as the reason for cutting back its previous estimate of 10.5 million tonnes.

UK Brent oil flow resumes, cargo delayed (Reuters)
A Brent crude cargo in January has been delayed by this week's shutdown of the Brent pipeline system, although the restart of the flow on Thursday suggested no lasting disruption to supply of the oil which forms part of the global Brent benchmark.

OIL: Brent crude steadied above $111 per barrel, supported by a rebound in China's growth and encouraging data from the United States, while a steep jump in the previous session, triggered partly by an Algerian crisis, limited further gains.    (Reuters)

China 2012 crude steel output up 3 pct at 716.5 mln tonnes (Reuters)
China produced 716.5 million tonnes of steel in the whole of 2012, up 3 percent from the previous year, despite crumbling profit margins and a slowdown in the economy, data from the country's statistics bureau showed.

BASE METAS: London copper was steady, on track to close the week little changed as improving economic landscapes in China and the United States bolstered the demand outlook, but concerns over the U.S. debt ceiling loomed over prices.  (Reuters)

PRECIOUS METALS: Platinum and palladium hovered near multi-month highs hit in the previous session as upbeat data from the world's top two economies bolstered hopes for global recovery, while gold was little changed after marking a one-month peak.  (Reuters)


METALS-Copper inches up as China, US data lifts demand outlook
SINGAPORE, Jan 18 (Reuters) - London copper climbed on track to close the week with small gains as improving economic landscapes in China and the United States made for a sunnier demand outlook, but concerns about the U.S. debt loomed over prices.    
"The (China) numbers were a little bit higher than expected," said analyst Ed Meir of INTL FC Stone in New York. "We could therefore have a decent uptick going into next week. The macro picture both out of the United States and China look good for metals," Meir said.

PRECIOUS-Palladium hits 16-month high on economic recovery hope
SINGAPORE, Jan 18 (Reuters) - Palladium rose to a 16-month high and platinum hovered near a three-month high hit in the previous session, buoyed by upbeat data from the world's top two economies, as gold traded slightly higher to near a one-month high.
"They are clearly in a sweet spot," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore.


Baltic index up on higher capesize demand
Jan 16 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, rose for a tenth straight day on Wednesday as demand for capesizes surged.
The main index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertilizer, rose 16 points or 2.09 percent to 781 points.

20130118 1442 Palm Oil Related News.


VEGOILS-Palm rises, overcomes India's import duty jitters
Fri Jan 18, 2013 1:17am EST
* India's palm oil demand still strong despite import tax
-trader
    * Malaysian palm oil prices must stimulate exports to cut
stocks -analyst
    * Palm oil signals mixed in 2,332-2,449 ringgit range
-technicals

 (Updates prices, adds detail)
    By Anuradha Raghu
    KUALA LUMPUR, Jan 18 (Reuters) - Malaysian palm oil futures
rose on Friday on steady buying ahead of the weekend, riding out
market jitters that India's new import duties could potentially
hurt demand and leave bulging stockpiles at record highs.
    India, the world's biggest buyer of vegetable oils, slapped
a 2.5 percent import duty on crude edible oils on Thursday,
triggering a fall of 2.1 percent in prices of palm oil for fear
that the taxes would take a toll on exports, which have been
sluggish in January.
    But traders say India's move, aimed at trimming a hefty
import bill and protecting its domestic oilseed industry, is
smaller than expected and not drastic enough to hurt demand.
    "Earlier there was talk about much higher taxes, but they
came up with this because India still needs oil," said a trader
with a foreign commodities brokerage in Kuala Lumpur.
    "Today, the market is a bit oversold because there is a lot
of covering going on toward the weekend," he added.
    By the midday break, the benchmark April contract
on the Bursa Malaysia Derivatives Exchange was up 1 percent at
2,405 ringgit ($798) per tonne, up from Thursday's close of
2,378 ringgit.
    Total traded volume stood at 18,097 lots of 25 tonnes each,
higher than the usual 12,500 lots, as investors hedged positions
ahead of the weekend.
    Technical analysis showed that Malaysian palm oil will
display mixed signals as long as prices remain in a range of
2,332 to 2,449 ringgit per tonne, Reuters market analyst Wang
Tao said.
    Record high stocks in Malaysia, the world's No.2 producer,
have caused prices to tumble more than 20 percent in 2012,
widening palm oil's discount to competing soybean oil and making
it the cheapest vegetable oil in the market.
    But despite Malaysia's zero-duty tax structure, which it
will retain next month, the country posted dismal export
performance in the first half of January.
    "Going forward, a lot depends on the export pace and whether
prices are low enough to encourage demand," said ANZ
agricultural and commodity strategist Victor Thianpiriya in
Singapore.
    "Prices need to find that point which encourages exports.
The market is going to do whatever it needs to stimulate enough
exports to get stocks lower," he added.
    Brent crude steadied above $111 per barrel on Friday,
supported by a rebound in China's growth and encouraging data
from the United States, while a steep jump in the previous
session, triggered partly by an Algerian crisis, limited further
gains.
    U.S. soyoil for March delivery was almost flat in
early Asian trade. The most active May soybean oil contract
 on the Dalian Commodity Exchange rose 0.7 percent.  

20130118 1109 Global Markets & Energy Related News.


GLOBAL MARKETS-Asian shares rise on strong U.S. data, China in focus
TOKYO, Jan 18 (Reuters) - Asian shares edged higher, tracking overnight gains in global equities markets after firm U.S. data signalled strength in the world's largest economy, lifting sentiment ahead of a batch of economic indicators from China later in the day.
"China's fourth-quarter GDP announcement expected during trading could prove a variable in today's session," said Lim Jong-pil, an analyst at Hyundai Securities in Seoul.

China Q4 GDP growth picks up to 7.9 pct yr/yr
BEIJING, Jan 18 (Reuters) - China's economy grew 7.9 percent in the fourth quarter from a year earlier with a bounce that snapped seven straight quarters of slowing expansion, official data showed on Friday.
The figures, announced by the National Bureau of Statistics, were slightly stronger than market expectations in the consensus Reuters poll of a 7.8 percent expansion.

FOREX-Yen bears rampage; China data in focus
SYDNEY, Jan 18 (Reuters) - The yen languished at two-and-a-half year lows against the dollar following a dramatic selloff as markets positioned for the Bank of Japan to take bold policy action to tackle deflation.
"We think there is some risk of disappointment at the BOJ meeting and scope for a yen rally. It is now consensus that the BOJ will move to a 2 percent inflation target. However, more aggressive measures may not come until closer to the nomination of the new governor/deputy governors in Q2," said Kiran Kowshik, strategist at BNP Paribas.

OIL-Oil rises on improving U.S. jobs, housing data
NEW YORK, Jan 17 (Reuters) - Oil rose on Thursday as financial markets got a boost from improving U.S. economic data showing jobless claims fell to a five-year low and housing starts rose sharply.
"Oil prices have risen because of broader economic optimism across the markets, which we've seen reflected in the U.S. jobless claims and housing numbers today," said Matt Smith of Summit Energy in Louisville, Kentucky.

20130118 1006 China Economic Data.


China Q4 GDP growth picks up to 7.9 pct yr/yr - RTRS
18-Jan-2013 10:03
BEIJING, Jan 18 (Reuters) - China's economy grew 7.9 percent in the fourth quarter from a year earlier with a bounce that snapped seven straight quarters of slowing expansion, official data showed on Friday.
The figures, announced by the National Bureau of Statistics, were slightly stronger than market expectations in the consensus Reuters poll of a 7.8 percent expansion. (Full Story)
The fourth quarter bounce from Q3's 7.4 percent - the weakest since the first quarter of 2009 when the global financial crisis raged - left full year growth at 7.8 percent, making 2012 the weakest year of economic expansion since 1999.
Other data released alongside GDP showed industrial output grew 10.3 percent in December from a year ago, versus expectations of 10.1 percent.
Retail sales in December rose 15.2 percent on a year ago versus an estimated 14.9 percent in a Reuters poll.
Annual fixed-asset investment growth was 20.6 percent in 2012, versus the 20.7 percent forecast in the Reuters poll. The government only publishes cumulative investment data.


Following is a breakdown of China's quarterly GDP growth rates:
(percent change from a year earlier):
    Q412  Q312  Q212  Q112  Q411  Q311  Q211  Q111  Q410  Q310


     7.9   7.4   7.6   8.1   8.9   9.1   9.5   9.7   9.8   9.6


Other key economic data released by the bureau
(percent change from a year earlier):
                      2012   Dec   F/C-Dec   Nov  
    Industrial output 10.0  10.3      10.1  10.1
    FAI               20.6   n/a      20.7  20.7
    Retail sales      14.3  15.2      14.9  14.9

20130118 0938 Malaysia Corporate Related News.


Malaysian Institute of Economic Research's (Mier)  business conditions index decreased to a three-year low of 94.1 pts in 4Q12 from 96 pts in 3Q12. This indicates that businessmen view that activities are contracting and they do not see a bright picture in 1Q13, said Mier ED Dr. Zakariah Abdul Rahid. The declining business confidence trend among manufacturers could deteriorate further, due to the weak demand from local and overseas markets as a result of dampened domestic manufacturing activities. On the other hand, the  consumer sentiment index increased to 118.7 pts in 4Q12 from 118.3 pts in 3Q12. The residential property index rose to 124.8 pts in 4Q12 from 113.6 pts in 3Q12. The  tourism market index was largely unchanged at 129.8 pts compared with 129.9 pts in 3Q12. The  retail trade index and the  automotive industry index, however, faltered significantly to 105.4 pts and 94.8 pts respectively (vs. 160 pts and 130.2 pts respectively in 3Q12). (Financial Daily)

The Malaysian economy is expected to grow 5.6% this year (5.1% in 2011) driven primarily by domestic economy, while inflation is expected to rise to 2.5% (1.7% in 2011) due to increased inflow of capital into the manufacturing sector, said the  Malaysian Institute of Economic Research. It also projected the GDP growth for 2014 to be within 5% and 6% and inflation to stay at 2.5%. (Bernama)

US jobless claims plunged 37,000 to 335,000 in the 12 Jan week (a revised 372,000 in the earlier week), massively below consensus of 368,000. (Bloomberg)

US housing starts  rebounded by a sharp 12.1% mom in Dec to a seasonally adjusted annualized rate of 954,000 units (a revised 851,000 in Nov) from a 4.3% dip the month before. Economists were expecting a reading of 887,000. (Bloomberg)

Eurozone construction output fell 0.4% mom in Nov (no change in Oct), whilst on a yoy basis, the measure fell 4.7% (-3.3% in Oct). (RTTNews)

China will sharply increase planned railway investment in 2013 to more than US$100bn (Rmb650bn), as part of plans to boost the economy. That marks a 30% increase from the planned investment of Rmb500bn for 2012. (AFP)

Japan’s tertiary industry index fell 0.3% mom in Nov (-0.1% in Oct), underperforming the consensus estimate of +0.1%. (Bloomberg)

Payrolls in Australia advanced 148,300 in 2012 after a 49,800 gain in 2011 for a two-year increase that was the weakest since 1996-1997. Unemployment rose to 5.4% last month (5.3% in Nov) as the number of workers fell by 5,500, against expectations of a 5,000 job gain. (WSJ)

State-run Indian oil marketing companies can now raise diesel prices in line with increases in global crude oil prices, a move that could help the government reduce its vast subsidy bill. (Reuters)

Singapore’s non-oil exports fell 16.3% yoy in Dec (-2.6% in Nov), worse than the median 8% on-year contraction forecast in a poll.  Electronics shipments were especially weak, down 19.1% yoy, following a 16.5% drop in Nov. But  non-electronics exports also sank 14.8% yoy, compared with a 6.1% rise last month. (WSJ)

The Philippines’ money supply (M3) growth rose to 9.8% yoy in Nov (8.6% in Oct).  Credit growth however slowed to 13.3% yoy (14.2% in Oct). (Bloomberg)

The  Bangko Sentral ng Pilipinas reported  that the  gross inflow of foreign portfolio investments reached US$18.46bn last year, the highest in a decade. The amount was also up by 12% from US$16.47bn in 2011. The outflows reached US$14.57bn, up by 17.5% from US$12.4bn the previous year. Thus, the  net inflow of foreign hot money reached US$3.88bn, which was down by about 5% yoy from US$4.1bn. (Philippine Daily Inquirer)







20130118 0937 Local & Global Economy Related News.


Perisai Petroleum has named its new jack-up drilling rig Perisai Pacific 101. The technologically advanced rig marks the company’s maiden investment in the high-value drilling business segment. “Costing US$208m and under construction in Singapore by established shipyard PPL Shipyard, Perisai Pacific 101 is set to enhance the group’s focus on upstream offshore development and production activities,” said MD Izzet Ishak. (Bernama)

Perisai Petroleum Teknologi Bhd expects its bottom line to register double-digit growth this year, riding on the sector's booming performance, especially in the Asia Pacific region. Perisai Petroleum managing director Izzet Ishak said this year there will be more activities in the oil and gas sector, of which some of the oil majors will be using its services such as chartering its vessels and drilling services. "We will also be allocating US$200m for capital expenditure this year on FPSO (floating, production, storage and offshore) activities,"  Izzet said. He added the company is expected to take delivery of Perisai Pacific which is its first drilling rig by July next year costing US$208m. The first rig will impact Perisai's earnings at around RM50m and RM60m a year. (BT)

Khazanah Nasional saw its portfolio value jump to a record high as at the end of 2012. Its overall realisable asset value increased by 12.4% to a new high of RM121.6bn. Its net worth adjusted (NWA) portfolio value surged 24.3% to a record RM86.9bn, outstripping the stock market benchmark index's total return of 14.1%. "A lot of it was driven by IPOs (like IHH Healthcare and Astro Malaysia), which contributed RM9.1bn to the NWA value, although the telco sector also did well," MD Tan Sri Azman Mohtar said. (BT)

Khazanah Nasional Bhd and  Sun Life Financial Inc, a Canada-based insurer, have agreed to purchase a 98% stake in CIMB Aviva Assurance Bhd, the insurance arm of the CIMB Banking group, in a transaction valued at RM1.8bn. Khazanah and Sun Life are each paying RM900m for the transaction, which includes entering into a new 20-year exclusive bancassurance agreement with CIMB Bank Bhd to distribute the products through its chain of  312 branches nationwide. (Financial Daily)

Tengku Datuk Ibrahim Petra, the former substantial shareholder of  Perdana Petroleum, has been ordered by the High Court to return the shares in the company that he had held on behalf of his former partner Kho Tian Boo by today. On 11 Jan, the Kuala Lumpur High Court ruled that Tengku Ibrahim was holding 833,860 Perdana shares in trust, on behalf of Kho, and ordered Tengku Ibrahim to transfer these shares back within seven days. The High Court also ordered Tengku  Ibrahim to pay damages, an interest of 5% on the damages and costs to Kho. Tengku Ibrahim and Kho founded Perdana, formerly known as Petra Perdana and went on to list the company in 2000. Kho is the father of Perdana's executive directors Datuk Henry Kho and Francis Koh. (Star)

Achiever Development Sdn Bhd, the third biggest shareholder in Perdana Petroleum Bhd, has sold its 35.53m shares (about 7.4%) of the o&g service provider. As such Datuk Tiong Su Kok and Tiong Chiong Hiiung have ceased to be shareholders of Perdana Pertroleum. Su Kok also owns Nam Cheong Ltd, a Singapore-listed company specialising in offshore support vessels. Two weeks ago Perdana Petroleum received a RM430m contract from Petronas Carigali for a five-year charter for anchor handling tug supply vessels with effect from Jan 2013. (Financial Daily)

Shareholders of Scomi Group, including factions that had previously opposed the entry of IJM Corp, are now ready to vote in favour of the construction giant becoming the former's biggest  shareholder, sources said. This means the proposed issuance of RM110m worth of bonds to IJM, is likely to sail through, contrary to earlier reports that two opposing sides within Scomi were preparing to lock horns. The bond issuance, when converted, would make IJM the single largest shareholder in Scomi with a 24.4% stake. IJM will not be entitled to vote at the EGM because it is an interested party. Maju Group executive chairman Tan Sri Abu Sahid Mohamed and his associate Datuk Phillip Siew Mun Chuang were believed to have initially opposed the entry of IJM, citing the dilution of their stakes should the latter convert its debt into equity. (Starbiz)

The RM5.2bn privatisation of  KFC Holdings (M) Bhd and its parent QSR Brands Bhd will be completed on Monday, subsequently paving the way for the delisting of both firms. QSR Brands managing director Datuk Ahmad Zaki Zahid said KFC and QSR shareholders will be paid on January 23 and January 25, respectively.  “The RM5.2bn privatisation cost is being paid by Johor Corp Bhd (JCorp), the Employees Provident Fund and CVC Capital Partners,” Ahmad Zaki told reporters. (BT)

AirAsia Bhd's head honcho  Tan Sri Tony Fernandes    hinted at the possibility of forming another joint venture (JV) airline, but stopped short of saying with whom. However, he dismissed JV opportunities in South Korea, Cambodia, Vietnam, Laos and Brunei. "No (South) Korea. No Cambodia. No Vietnam, etc. We have got a fantastic spread of countries and we will now build all those to (the) size of Malaysia," he said, referring to AirAsia's existing operations in Thailand, Indonesia, the Philippines and Japan. AirAsia was recently reported in the Indian media to have held preliminary discussions with the Videocon group for a possible JV in India. (Sun)

Malaysia Airlines (MAS), which is set to become a full member of the oneworld airline alliance, will start offering a full range of oneworld services and benefits from 1 February. MAS passengers will gain access to the alliance's global network which covers over 850 destinations in almost 160 countries. Current oneworld members include airberlin, American Airlines, British Airways, Cathay Pacific Airways, Finnair, Iberia, Japan Airlines, LAN Airlines, Qantas, Royal Jordanian and S7 Airlines. Separately, Khazanah denied plans to take MAS private, dismissing market speculation that such a move may be on the cards for the ailing airline. Managing director Tan Sri Azman Mokhtar said: “Yes, we can take it private, but if we do so, we still haven't solved the problem of how to put more money into the company." (BT)

Managing director Tan Sri Azman Mokhtar quashed speculation that it is joining a consortium comprising Malaysia Airports and YTL Corp to bid for the UK's Stansted Airport. "Our interest is through MAHB, we are not averse to it (bidding). But Khazanah is not going in directly," he said. To a question on whether Khazanah, which owns 40.4% of MAHB, had found a potential replacement for MAHB's managing director Tan Sri Bashir Ahmad, whose contract ends this June, he said it was "too premature" to talk about the issue of replacement. However, Tan Sri Azman vaguely alluded that former Pos Malaysia Bhd CEO Datuk Syed Faisal Albar Syed Albar is in the running with a few others to potentially replace Bashir. (BT)

AirAsia X CEO Azran Osman-Rani said the carrier is targeting some 50,000 passengers flying to Jeddah in its first year, with commercial services starting from 16 February, starting with three weekly flights, then increasing to 4x weekly from 1 May. He said there was a lot of demand from Malaysians, who are looking for affordable flights into Saudi Arabia and equally from around the region, such as Indonesia.  (BT)

The Malaysian Technology Development Corporation (MTDC), which has granted funds worth RM80m to the country's young technopreneurs, wants to extend the grant to more states this year. Since MTDC launched its Symbiosis Programme in 2008, the focus "seemed to be very federal", said its chief executive Datuk Norhalim Yunus, adding that it's time for it to expand the reach to create the necessary critical mass of start-up companies in technology businesses. (BT)