Gold prices rose Thursday after a mixed batch of U.S. economic news raised hopes for some investors that the Federal Reserve will take additional steps to try to bolster growth. Applications for unemployment benefits dipped to a seasonally adjusted 388,000 last week, near a three-month high, the Labor Department reported. That was an indication hiring has slowed down since winter.
Thursday, April 26, 2012
Gold climbs on hopes that the Fed will conduct new round of bond purchases to help economy
Gold prices rose Thursday after a mixed batch of U.S. economic news raised hopes for some investors that the Federal Reserve will take additional steps to try to bolster growth. Applications for unemployment benefits dipped to a seasonally adjusted 388,000 last week, near a three-month high, the Labor Department reported. That was an indication hiring has slowed down since winter.
Softs Market Commentary
July sugar closed up 31 points at 21.92 cents yesterday. Prices closed near mid-range yesterday and saw short covering in a bear market. Sugar bears still have the solid overall near-term technical advantage. Bulls' next upside price breakout objective is to push and close prices above solid technical resistance at last week's high of 22.92 cents. Bears' next downside price breakout objective is to push and close prices below solid technical support at 21.00 cents. First resistance is seen at yesterday's high of 22.07 cents and then at 22.25 cents. First support is seen at yesterday's low of 21.67 cents and then at this week's low of 21.41 cents.
BOJ Expands Asset-Purchase Fund to 40 Trillion Yen
The Bank of Japan (8301) added monetary stimulus for a second time in three months amid mounting calls from lawmakers to redouble efforts to spur economic growth. The central bank expanded its asset-purchase fund to 40 trillion yen ($494 billion) from 30 trillion yen, according to a statement released in Tokyo today. It also extended the maturity of bonds it buys to 3 years from a two-year limit. All 14 economists surveyed by Bloomberg News predicted an increase in the fund, the central bank’s main policy tool.
Why Half the World Doesn't Have Bank Accounts
In the U.S., bank accounts are nearly ubiquitous, with almost 90 percent of adults having formal accounts. But in poor countries, only a quarter of people report having have accounts. All told, more than 2.5 billion adults around the world—about half—are unbanked, according to a new World Bank data project funded by the Bill & Melinda Gates Foundation and based on Gallup polling in 148 countries. The World Bank launched the Global Financial Inclusion initiative, which it calls Global Findex for short, with both a database and a white paper on the new stats.
Yen Falls on Easing Speculation
The euro fell, extending a monthly loss against the dollar and yen, after Standard & Poor’s cut Spain’s sovereign debt rating, adding to concern the region’s financial woes are spreading. S&P downgraded Spain’s long-term credit rating two levels to BBB+ yesterday from A, saying the outlook is negative as the country’s recession undermines efforts to cut the budget deficit. Australia’s dollar halted two days of gains as traders bet that the Reserve Bank will cut interest rates next week.
Avoiding Commodity Trading Margin Calls
In the current Wild West trading environment, where 5% price swings have become commonplace, avoiding margin calls is a bigger challenge now than what I've ever seen in my career. Traders can take all the necessary steps and still there is still no assurance that a margin call can be avoided, here are some suggestions that may aid in deterring future margin calls when trading commodities. Let me start by explaining exactly what a margin call is; a call from a clearinghouse to a clearing member, or from a broker or firm to a customer, to bring margin deposits up to a required minimum level. When the balance of the account drops below the maintenance margin level a margin call is issued. Once a margin call is issued the party receiving the call generally has 48-72 hours to bring their account balance back above the initial maintenance amount. If you wish not to satisfy the margin call the alternative is liquidating the position and taking the loss.
Commitment of Traders (COT) - Who, What, Why and When
In the last few weeks I have received several inquiries from existing and prospective clients. They are curious to know if I look at the commitment of traders (COT) report and if I view it as a useful resource for commodities trading. The answers are yes and yes. There are so many useless reports that are issued, however the COT is an excellent source of information. I have chosen to write a brief explanation hoping that some of the questions these individuals had may be answered. As well if there is a topic in commodities that you are having trouble grasping, we take suggestions into account when choosing our topics.
The US Dollar is weaker and thought to perhaps stay in a downward trend
The US Initial Jobless Claims decreased by 1,000 to 388,000 in the latest week. Expectations were more for around 375,000 leaving the marketplace disappointed! The National Association of Realtors reported that the existing home sales increased by 4.1 % while expectations were forecast at 0.5 % while the previous reading was at -0.5 %. The housing sector has been the most troublesome area making this reading a welcome surprise for the marketplace. US home prices declined 3.5 % in February from last year's pricing. Many homeowners are under water with their home mortgages owing more than the mortgage amount. Some of this may have resulted from low down payments such as are required by FHA loan policies.
History of Capital Markets
“Progress might have been all right once, but it has gone on too long.” — Ogden Nash
UBS uses iPad to let clients help design trading algorithms
April 19 (Bloomberg) -- UBS AG will let clients design trading algorithms on Apple Inc.’s iPad, putting tailor-made tools in their hands more quickly in an effort to capture equities market share, according to executives at the Zurich- based bank.
Man Group speculators chase hedge funds at record low
April 26 (Bloomberg) -- For asset managers seeking hedge fund-like returns on the cheap, Man Group Plc is now offering the biggest discount on record.
MetLife sues Morgan Stanley over mortgage-backed securities
April 26 (Bloomberg) -- MetLife Inc., the largest U.S. life insurer, sued Morgan Stanley in New York state court for fraud over $757 million in residential mortgage-backed securities purchased in 2006 and 2007. MetLife accuses the New York-based bank of telling it that the mortgage loans backing the securities were originated based on “specific underwriting guidelines” and collateralized by properties that had been “accurately appraised.” “In truth, and as MetLife and the world would only later discover, the originators whose loans collateralized the Morgan Stanley RMBS at issue were among the worst of the worst culprits in the subprime lending industry,” New York-based MetLife said in a complaint filed yesterday in New York State Supreme Court in Manhattan.
Oversold stats erased as S&P faces April 2 high
Market Overview – What We Know:
- Major indexes, excepting NASDAQ, posted marginal gains Tuesday as short-term “Oversold” conditions continued to correct higher.
- MAAD Daily ratio was last plotted at .90. Readings toward 1.00 and “Neutral” would be good enough to suggest point for further near-term vulnerability.
- Selling below lower edge of 10-Week Price Channel at 1351.61—S&P 500 (through 4/27) would be first such weakness below weekly price channel since last fall.
- NYSE trading volume declined nearly 4% Tuesday while price of average share on NYSE rose 66 cents to $57.60. Highest recent average price level occurred March 15 at $61.48.
- S&P 500 remains locked between recent short-term high at 1422.38 hit on April 2 and reaction low to 1357.38 hit on April 10.
- Daily MAAD was positive Tuesday by 14 to 6 after fracturing support low hit on March 6 last Friday.
- Daily CPFL was positive Tuesday by 1.64 to 1, but remains below April 9 short-term high. Both Daily and Weekly CPFL remain substantially below indicator resistance high put in place February 2011.
Oil looking for breakout by week’s end, nat gas still bearish
CLM12:
- Short Term Trends are bearish.
- Confirmation of a bottom with a range violation on 04/25/12 @ 104.11. Confirmation of a bottom with a close violation on 04/12/12 @ 104.11. Upside Targets = 105.29 – 106.21.
- June WTI Crude moved higher for the second straight day Wednesday as it closed at its highest level in six trading session.
- With the daily Bollinger Bands beginning to close in, look for WTI to have a breakout session before the week’s end.
- Projected Daily Range: 1.62
- Projected Weekly Range: 4.52
- Projected Monthly Range: 9.76
FERC out of bounds fining natural gas trader: CFTC
April 26 (Bloomberg) -- A former natural gas trader at Amaranth Advisors LLC is being backed by the U.S. Commodity Futures Trading Commission in a court challenge to a $30 million fine imposed by the Federal Energy Regulatory Commission.
BlueGold Hedge Fund to Liquidate, Return Money to Investors
BlueGold Hedge Fund to Liquidate, Return Money to Investors
April 5 (Bloomberg) -- BlueGold Capital Management LLP, the $1 billion energy hedge fund co-founded by Pierre Andurand, is liquidating after losing 34 percent last year.
April 5 (Bloomberg) -- BlueGold Capital Management LLP, the $1 billion energy hedge fund co-founded by Pierre Andurand, is liquidating after losing 34 percent last year.
Wheat, Corn, Cotton, Soybean Trading Outlook
Wheat, Corn, Cotton, Soybean Trading Outlook - International Business Times
Corn futures got off to a firmer start but buying interest quickly dried up and futures drifted lower. Old-crop Corn ended 0.07 to 0.0725 lower, with September down 0.0625. New-crop Corn ended mostly between 0.02 to 0.03 lower. Funds were active sellers of 12,000 contracts today (60-M bu). The inability of the market to rally on positive news signals traders' focus is on the potential for a large 2012 crop.
Corn futures got off to a firmer start but buying interest quickly dried up and futures drifted lower. Old-crop Corn ended 0.07 to 0.0725 lower, with September down 0.0625. New-crop Corn ended mostly between 0.02 to 0.03 lower. Funds were active sellers of 12,000 contracts today (60-M bu). The inability of the market to rally on positive news signals traders' focus is on the potential for a large 2012 crop.
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