Oil down modestly as Venezuela still in focus

Oil futures fell slightly in the early part of Thursday’s Asian session despite some solid data points released Wednesday in the U.S. as crude traders continue to mull the impact of the death of Venezuelan President Hugo Chavez.

On the New York Mercantile Exchange, light, sweet crude futures for April delivery fell 0.03% to USD90.41 in Asian trading Thursday after falling 1.22% to USD89.71 a barrel on Wednesday in the U.S. That decline was prompted by weekly inventories data.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 3.8 million barrels in the week ended March 1, well beyond market calls for an increase of 526,000 barrels.

Traders focused more on the inventory data than economic news out of the world’s largest oil consumer. In U.S. economic news, the ADP private payroll survey showed non-government U.S. employers added 198,000 new jobs last month, topping estimates for a gain of 173,000 private sector jobs. The Labor Department delivers the February jobs report on Friday before the open of U.S. markets.

January’s figure was revised up to a gain of 215,000 from a previously reported increase of 192,000. Elsewhere, the U.S. Census Bureau reported that factory orders fell by 2% in January, less than market calls for a drop of 2.2%

Traders are also still pondering what the near- and long-term outlooks for crude will be now that Chavez has passed. Vice President Nicolas Maduro succeeds Chavez and it is widely expected that Maduro, like his predecessor, will use oil as a political weapon.

Despite the fact that Venezuela is home to the world’s largest oil reserves, the country has not appropriately invested in energy infrastructure, so any increased supply from the South American nation is years from coming to market.
Elsewhere, Brent for April delivery fell 0.09% to USD110.96 per barrel on the ICE Futures Exchange. 

COURTESY : INVESTING.COM

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China's SGE to launch after-hours trading in Gold,Silver

In yet another attempt to gain further foothold in global futures trading, China's leading commodities exchange, the Shanghai Futures Exchange said it would launch after-hours trading this year including in gold and silver.

The exchange said it will further boost its international ambitions by expanding the list of futures contracts in the coming years, including crude oil.

The extended trading hours will bridge the gap between domestic investors and foreign markets, and will align the exchange with international practices, according to an SGE statement.

The Shanghai Futures Exchange has 10 trading categories, including gold, silver, copper and aluminum.
Analysts said the move will allow market participants to hedge and adjust their positions after breaking news emerges in the United States or Europe, thus reducing price volatility.

SGE now trades from 9 am to 11:30 am and from 1:30 pm to 3 pm Beijing time.

China is also positioning its futures markets to become major players, and shape the global prices for metals, energy and farm commodities as this will give Chinese traders a direct role in valuing the contracts, and will help the country to be less at the mercy of markets elsewhere, they added.

China is a heavy user of industrial and agricultural commodities, such as oil, copper and aluminum. But with an isolated futures market, the country has little say over global prices.

Aside from the Shanghai exchange, China has three other commodities bourses: the Dalian Commodity Exchange in Liaoning province, the Zhengzhou Commodity Exchange in Henan province, and the China Financial Futures Exchange in Shanghai.

COURTESY : BULLIONSTREET

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Gold higher ahead of central bank meetings

Gold futures shot higher in the early part of Asia’s Thursday session following another strong day for U.S. stocks and ahead of several marquee central bank meetings later today.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery advanced 0.45% to USD1,582 per troy ounce after settling up 0.04% at USD1,575.50 a troy ounce in U.S. trading on Wednesday.

Gold futures were likely to test support USD1,564.20 a troy ounce, Friday's low, and resistance at USD1,585.60, Tuesday's high.

Gold’s slight increase came amid another up day for U.S. equities, which included the Dow Jones Industrial Average rising to another record high, and some decent data points.
In U.S. economic news, the ADP private payroll survey showed non-government U.S. employers added 198,000 new jobs last month, topping estimates for a gain of 173,000 private sector jobs. The Labor Department delivers the February jobs report on Friday before the open of U.S. markets.
January’s figure was revised up to a gain of 215,000 from a previously reported increase of 192,000. Elsewhere, the U.S. Census Bureau reported that factory orders fell by 2% in January, less than market calls for a drop of 2.2%.

Today, traders will be focusing on monetary policy commentary from the Bank of Japan, the Bank of England and the European Central Bank. It is widely expected that all three central banks will keep with their loose monetary policies though speculation has increased BoE could restart quantitative easing, which it halted in November.

Media reports also noted South Korea's central bank bought 20 tons of gold last month, marking its fifth purchase of the yellow metal in the past two years.
Elsewhere, Comex silver for May delivery rose 0.31% to USD28.892 per ounce while copper for May delivery fell 0.23% to USD3.497 per ounce.

COURTESY : INVESTING.COM

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Natural Gas falls ahead of supply data

Natural gas futures dropped on Wednesday after investors priced in the effects of a late-winter blast of cold air and looked ahead to Thursday's release of weekly supply data, with talk of bearish numbers prompting a selloff.

On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD3.478 per million British thermal units, down 1.46%.

The commodity hit a session low of USD3.466 and a high of USD3.549.

A winter storm roared across the eastern U.S. on Wednesday, while forecasting models continued to predict colder weather to stick around for the central and eastern portions of the country.

A warming trend, however, will eventually follow, according to longer-range models, which was bearish for natural gas.
Investors also avoided the commodity ahead of the Thursday release of U.S. inventories.

Total U.S. natural gas storage stood at 2.299 trillion cubic feet as of last week, 16% above the five-year average for this time of year.

Early withdrawal estimates for this week’s storage data range from 120 billion cubic feet to 160 billion cubic feet.

Inventories fell by 92 billion cubic feet in the same week a year earlier, while the five-year average change for the week represented a decline of 107 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in April were down 0.62% and trading at USD90.26 a barrel, while heating oil for April delivery were down 0.23% and trading at USD2.9663 per gallon.

COURTESY : INVESTING.COM

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DGCX Gold Futures gains 77% in February

For the second month in succession this year, The Dubai Gold and Commodities Exchange (DGCX) achieved another all-time high in volume this February.

DGCX traded 1.15 million contracts in February valued at $44.16 billion with bulk of activity in the DGCX’s Indian Rupee contracts which saw record volume of 1,083,120 contracts.

Among precious metals, DGCX Gold futures recorded 49,048 contracts, a year-on-year increase of 77% from the same month last year. Silver futures also experienced a strong volume growth of 38% from January last year.

February 28th also marked the highest single day of trading as 82,197 contracts were traded.The month also saw the highest ever average daily value of contracts of $2.21 billion per day.

February also witnessed the highest ever daily volume of 82,197 contracts on 28 February, 2013 and the highest ever average daily volume of 57,867 contracts.

Currencies remained the strongest performing segment, trading a total of 1,100,392 currency contracts, up 126% from the same month last year.

Indian Rupee futures sustained its exceptional record-breaking growth momentum, registering its highest ever monthly volume of 1,083,120 contracts, valued at $40.09 billion. The contract also recorded its highest ever average daily value of $ 2.01 billion contracts in the month.

Gary Anderson, Chief Executive Officer, DGCX, said, “DGCX’s sustained record-breaking performance in the first two months of 2012 has been driven by the Exchange’s initiatives to generate greater liquidity and tighter spreads in its contracts.

Our key contracts like Indian Rupee futures and Gold futures are attracting a growing global diversity of participants. We remain committed to further enhancing our product portfolio for our Members and continue to explore new products and services to better support the increasingly sophisticated hedging and investment needs of market participants.” he added.

Among other currency contracts, Euro and Yen futures saw respective year-to-date volume growth of 369% and 135% from last year.

COURTESY : BullionStreet

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Natural Gas falls as market prices in cold weather, bullish supply data

Natural gas futures edged lower on Friday after investors priced in chilly weather forecasts and bullish supply data, locked in gains and later sold for profits. On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD3.474 per million British thermal units, down 0.33%. The commodity hit a session low of USD3.441 and a high of USD3.518. Cold and snowy weather continued to settle in for much of the heavily populated central and eastern portions of the U.S., which sent prices rising earlier. Investors also bought earlier in the day on bullish supply data released by the U.S. government on Thursday. The U.S. Energy Information Administration said in its weekly report released earlier that natural gas storage in the U.S. in the week ending Feb. 22 fell by 171 billion cubic feet compared to expectations for a drop of 167 billion cubic feet.

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Crude-Oil Futures Settle at 2013 Low of $90.68 a Barrel

Prices slumped early on official data from China, the world's second-biggest oil consumer, showing the February purchasing managers' index at 50.1, fractionally above the no-growth mark and down from a reading of 50.4 in January. Worries over a record-high euro-zone unemployment rate of 11.9% in January kept the market on edge as traders worried about Italy's ability to continue economic reforms after its recent elections. In the U.S., the Commerce Department said personal income dropped to a 20-year low in January as higher taxes kicked in. Personal incomes fell 3.6%, compared with economists' forecasts for a 2.5% decline. Consumers responded by saving less, rather than spending less, as consumer spending ticked up 0.2%. Meanwhile, President Barack Obama offered no hint of any deal between the White House and Congress to avoid automatic spending cuts of $85 billion as a deadline loomed.

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Metals Fall on Spending Cuts, Economy as Stocks Decline

Commodities dropped for a fourth day and stocks fell as $85 billion of spending cuts were set to be triggered in the U.S. and manufacturing slowed in China and the euro area. The 17-nation shared currency and the pound weakened while the Swedish krona strengthened.

The Standard & Poor’s GSCI gauge of 24 raw materials dropped 1 percent at 8:40 a.m. in New York as lead, aluminum and copper fell at least 1.7 percent and oil sank 1.3 percent. The StoxxEurope 600 Index slid 0.9 percent and S&P 500 Index futures lost 0.4 percent. The euro dropped below $1.30 for the first time in eight weeks. The pound tumbled 1 percent to $1.5018, whileSweden’s currency climbed at least 0.4 percent against its 16 major peers as fourth-quarter gross domestic product exceeded analyst estimates.

“Risk assets underperformed as data such as PMIs reinforced a view that we are in a low growth environment,” said Michael Quach, investment strategist in London at Smith & Williamson Investment Management, which has $19 billion in assets. “Stimulus and other confidence boosting measures provided by central banks around the world have helped to reduce systemic risk, but there are still a lot of headwinds in the economy.”The U.S. Senate rejected a pair of partisan proposals to replace the automatic across-the-board spending reductions which the International Monetary Fund says will hurt global growth. Consumer spending rose in America in January, the Commerce Department said before reports on manufacturing and construction. Data showed China’s manufacturing slowed for a second month while factory output in the euro area contracted for the 19th straight month.

Dollar Gains

The dollar led gains in world markets last month, beating global measures of bonds, stocks and commodities, as the threat of U.S. budget cuts proved no barrier to investors snapping up American assets. Japan overtook China last year as the largest foreign holder of U.S. securities, including equities, asset- backed debt and Treasuries, the U.S. Treasury Department said.

The Dollar Index, which tracks the currency against six U.S. trading partners, climbed 0.5 percent today. Treasuries advanced for a second day, with the yield on 10-year notes falling three basis points to 1.85 percent.

The S&P GSCI of commodities fell to a two-month low and is heading for a fourth weekly decline, the longest streak since June. West Texas Intermediate oil dropped to $90.84 a barrel. Copper slipped 1.7 percent to the lowest since Nov. 28 and aluminum retreated for a 10th day, the longest slump since June. China is the biggest buyer of energy and industrial metals.

European coal for 2014 fell to a record $97.50 a ton.

Earnings Disappoint

The Stoxx 600 erased this week’s advance. The gauge climbed for nine months through February, the longest run of gains since 1997. Two shares fell for every one that gained in the Stoxx 600 today, with a gauge basic-resource stocks dropping 2.5 percent, the biggest decline among 19 industry groups.

Belgacom SA (BELG), the largest phone company in Belgium, fell 8.7 percent to a record low after forecasting earnings that trailed analyst estimates. Royal Vopak NV, the world’s biggest chemical and oil storage company, tumbled 15 percent as operating profit declined.

Thales SA surged 12 percent as Europe’s biggest maker of defense electronics reported earnings that topped estimates and started a review of regional and product focus to improve profitability.

The cost of insuring against default on corporate debt increased, with the Markit iTraxx Europe index of credit-default swaps linked to 125 investment grade companies rising 3.5 basis point to 120, the highest in three days.

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Gold price surge as Bernanke’s doves fly again

             

                Markets have been roiled over the last 48 hours by the three B’s: Berlusconi, Bernanke and Boehner. The indecisive Italian election outcome and the strength of the anti-austerity vote has many traders thinking that the whole eurozone issue is not receding in the rear-view mirror quite as quickly as some had hoped. EURUSD fell by more than two cents on Monday afternoon as news from Italy was digested. Stock markets also fell sharply, along with industrial commodities. In contrast, gold held onto its early-day gains.

Ben Bernanke therefore had an important task to do in his Congressional testimony yesterday: reassuring markets that, contrary to the head fake in the last batch of FOMC minutes, easy money policies will last for a long time to come yet.

He didn’t disappoint – noting “we [the FOMC] do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery… Inflation is currently subdued, and inflation expectations

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Bernanke defends low rates in House hearing

                   The policy is needed “to keep interest rates a little bit lower to help support housing, automobiles and other parts of the economy that need support,” Bernanke said during his second day of his testimony to Congress on the economy and monetary policy.

Investors were pleased with Bernanke’s stance. The Dow Jones Industrial Average rose to its highest levels in the late afternoon, up almost 200 points to 14,098.Read Market Snapshot.

In January, the Fed decided to keep buying $85 billion worth of Treasury bonds and mortgage-backed securities a month until it saw a substantial improvement in the labor market. The Fed has also kept interest rates close to zero since December 2008.

For the second day, Bernanke strongly defended the bond-buying program and repeating that the potential costs don't outweigh the benefits. Read about first day’s testimony.

Some Fed officials are worried that the program will create financial instability and could foster inflation if the central bank has difficulty engineering a smooth exit strategy.

The Fed will review its bond-buying program at its next meeting on March 19-20.

Bernanke said results of the easy policy stance are starting to emerge.

“We are getting some traction in the housing market, which has shown some strength in the last few days, some of the data most recently. In automobiles and other durable goods, to some extent in investment, to some extent, perhaps, in commercial real estate we’ve seen some signs of improvement,” Bernanke said.

Republicans on the House panel were skeptical.

“There seems to be…a lot of evidence out there that the benefits of the low interest rate and quantitative easing are accruing primarily to the federal government, foreign governments and large banks,” said Rep. John Campbell, a Republican from California.

A common theme among Republicans was that Bernanke was “enabling” runaway spending by the federal government.

Jan Hatzius, chief economist at Goldman Sachs, noted that Bernanke sent a “modestly dovish signal” by suggesting the Fed is debating holding the securities on its balance sheet longer than currently expected or letting them run off without selling.

“Our estimates suggest that the effects on long-term interest rates of such a move would be modest,” he said.

Bernanke repeated his call for Congress and the White House to agree to take steps so the economy could avoid the impact of the across-the-board federal spending cuts, known as the sequester.

The cuts are set to start to take effect Friday.

“Most economists…would say that [the sequester] would cost a lot of jobs in the short-run and you can achieve the same results with longer-term programs,” the Fed chairman said.

“Would it be fair for me to paraphrase this to average people that the chairman of the Federal Reserve thinks that sequestration is stupid? asked Rep. Michael Capuano. a Democrat from Massachusetts.

“I wish you wouldn’t do that,” Bernanke replied.

Asked if low rates were punishing seniors, Bernanke said that raising rates prematurely would only hurt the economy.

“It’s very striking that if you look at every other industrial country around the world, interest rates are about exactly where they are here,” the chairman said.

“And that says something about the fundamentals, which are very weak in most of these industrial countries. And until we can get greater forward momentum, we’re not going to be able to see sustainable higher returns,” he added.

Courtesy : Market Watch

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