LONDON (Dow Jones)--Crude oil prices were lower Monday as Spain's recession and the euro zone's weaker-than-expected inflation data pushed the euro lower against the dollar and fuelled fears oil demand may be lower than previously forecast. At 1026 GMT, the front-month June Brent contract on London's ICE futures exchange was 65 cents, or 0.5%, lower at $119.18 a barrel. The front-month June contract on the New York Mercantile Exchange was trading down 67 cents, or 0.6%, at $104.26 per barrel. The Spanish economy contracted two quarters in a row, official data showed, meaning the country is in recession. Furthermore, Standard & Poor's cut ratings on several Spanish banks.
Monday, April 30, 2012
Crude Down As Spain Woes, Euro-Zone Data Weigh
LONDON (Dow Jones)--Crude oil prices were lower Monday as Spain's recession and the euro zone's weaker-than-expected inflation data pushed the euro lower against the dollar and fuelled fears oil demand may be lower than previously forecast. At 1026 GMT, the front-month June Brent contract on London's ICE futures exchange was 65 cents, or 0.5%, lower at $119.18 a barrel. The front-month June contract on the New York Mercantile Exchange was trading down 67 cents, or 0.6%, at $104.26 per barrel. The Spanish economy contracted two quarters in a row, official data showed, meaning the country is in recession. Furthermore, Standard & Poor's cut ratings on several Spanish banks.
Kansas Wheat-Growth Boosts Yields as Glut May Erode Price
The fastest-ever development of the Kansas wheat crop is drawing a record number of surveyors seeking to gauge prospects for a harvest that is poised to swell the world’s grain bins and drive prices lower. Kansas, the top U.S. grower of winter wheat, will collect 45.8 bushels an acre when the harvest starts in May, the most since 2003 and up from 35 bushels in 2011, based on the average estimate in a Bloomberg survey of 10 analysts, some of which are among the record 100 participants expected in this year’s crop tour. As of yesterday, grain had developed in 74 percent of the crop, the most for that date since at least 1981 and up from a five-year average of 7 percent, government data show.
Record Fuel Output Returning Exmar’s Tankers to Profit
The world is refining and extracting so much oil and natural gas that record amounts of byproducts are being generated, creating a flood of liquefied petroleum gas for the ships carrying the fuel used in stoves and lighters. Trade in LPG will rise 3.9 percent to 62 million metric tons this year, compared with no more than 2 percent fleet growth, according to Lorentzen & Stemoco A/S, an industry consultant in Oslo. Charter rates will rise 8 percent, the most since 2008, investment bank Fearnley Fonds ASA predicts. Exmar NV (EXM), which operates 29 of the vessels, will return to profit this year and its shares will jump 38 percent in 12 months, according to as many as five analyst estimates compiled by Bloomberg.
Five Ways To Lose Money Without Trying
Investors woke up to a surprise on Thursday: jobless claims came in higher than expected and ExxonMobil (XOM) missed earnings by 9 cents a share. Exxon stock declined marginally, down just 1.7%. Then again, pending home sales rose and a has some pundits saying the real estate market has bottomed out. Anyone who has tried buying a piece of property over the last three years (as I have), has heard that one before — the market has bottomed out, rates can’t go any lower. Whatever you say, Charlie.
Krugman Says Fed ‘Reckless’ to Allow High Jobless Rate
Krugman Says Fed ‘Reckless’ to Allow High Jobless Rate - Bloomberg
Nobel Prize-winning economist Paul Krugman suggested Federal Reserve policy makers led by Ben S. Bernanke are “reckless” for refusing to pursue higher inflation, which he said could lower U.S. unemployment. “The reckless thing is to allow mass unemployment to continue,” Krugman, a Princeton University professor, said on Bloomberg Television’s “Street Smart” yesterday. “We have had a massive failure of our political system that has come to accept that 8 percent unemployment is the new normal and there is nothing that can be done,” Krugman said. “We’re in a low- key version of the Great Depression.”
Nobel Prize-winning economist Paul Krugman suggested Federal Reserve policy makers led by Ben S. Bernanke are “reckless” for refusing to pursue higher inflation, which he said could lower U.S. unemployment. “The reckless thing is to allow mass unemployment to continue,” Krugman, a Princeton University professor, said on Bloomberg Television’s “Street Smart” yesterday. “We have had a massive failure of our political system that has come to accept that 8 percent unemployment is the new normal and there is nothing that can be done,” Krugman said. “We’re in a low- key version of the Great Depression.”
Australia surprises with half-point rate cut
SYDNEY (MarketWatch) — The Reserve Bank of Australia cut its benchmark interest rate by a steeper-than-expected half-percentage-point on Tuesday, lifting the stock market but weighing on the Australian currency. The Australian central bank took the country’s policy cash rate down to 3.75%, from 4.25%. Markets had fully factored in a quarter-point cut to 4.0% before the decision. RBA Gov. Glenn Stevens said that the half-point cut — the first easing of rates since December — was “judged to be necessary in order to deliver the appropriate level of borrowing rates.”
U.S. dollar jumps on Aussie after RBA rate cut
HONG KONG (MarketWatch) — The U.S. dollar weakened a bit against major currencies Tuesday after an improvement Chinese manufacturing data in April, although it rallied against the Australian currency after an aggressive interest rate cut by the central bank there. The ICE dollar index DXY -0.01% , which measures the greenback’s performance against a basket of six major global currencies, slipped to 78.728 from 78.779 in North American trade late Monday.
Gasoline, Oil Decline as Natural Gas Gains
Gasoline capped the first monthly drop since November as reports showing weakness in Europe’s economy added to concern that global demand will slow. Gasoline for May delivery fell 2.18 cents, or 0.7 percent, to settle at $3.1844 a gallon on the New York Mercantile Exchange. The price, which dropped 6.1 percent in April, has gained 19 percent this year. The May contract expired today. The more-active June gasoline contract decreased 1.99 cents, or 0.6 percent, to $3.1246.
PRECIOUS METALS: Gold Shakes Off $1.24 Billion 'Fat Finger'
NEW YORK (Dow Jones)--The gold market was shaken by an unusually large early-morning sell order Monday, which triggered a brief trading halt in gold futures and left traders questioning whether the transaction was a mistake. CME Group Inc.'s Comex division recorded an unusually large transaction of 7,500 gold futures during one minute of trading at 8:31 a.m. EDT. The sale took out blocks of bids as large as 84 contracts in one fell swoop and cut prices down $15 to $1,648.80 a troy ounce. The sharp losses triggered a 10-second trading halt in June-delivery gold futures, CME told Dow Jones Newswires.
Speculators Miss Biggest U.S. Corn Sale Since 1994
April 30 (Bloomberg) -- Speculators reduced bullish bets on corn by more than any other commodity, just before the U.S. reported its single biggest export sale in 18 years and prices had their largest two-day rally in almost a month.
Bonds Prove Only Winners for First Time Since 2008
For the first time since the start of 2008, bonds were the only investments to provide positive returns amid renewed concern the global economy is slowing and as widening deficits in Europe threaten contagion.
Fixed-income assets -- from Australian government debt to U.S. Treasuries to global junk bonds -- gained 0.57 percent last month through April 27 including reinvested interest, according to Bank of America Merrill Lynch index data. The MSCI All- Country World Index of stocks lost 1.1 percent including dividends while the Standard & Poor’s GSCI Total Return Index of metals, fuels and agricultural products fell 0.5 percent. The U.S. Dollar Index dropped 0.29 percent.
Bonds Prove Only Winners for First Time Since 2008
For the first time since the start of 2008, bonds were the only investments to provide positive returns amid renewed concern the global economy is slowing and as widening deficits in Europe threaten contagion. Fixed-income assets -- from Australian government debt to U.S. Treasuries to global junk bonds -- gained 0.57 percent last month through April 27 including reinvested interest, according to Bank of America Merrill Lynch index data. The MSCI All- Country World Index of stocks lost 1.1 percent including dividends while the Standard & Poor’s GSCI Total Return Index of metals, fuels and agricultural products fell 0.5 percent. The U.S. Dollar Index dropped 0.29 percent.
Currency momentum strategies yield “striking” annual returns of 10 per cent
Momentum trading strategies in foreign exchange markets yield “striking” excess returns of up to 10 per cent a year, according to a new study. ‘Cross-sectional strategies’ – where investors go long or short on a basket of currencies based on their past performance – yield the highest returns, even when accounting for transaction costs. The findings come from a new study, due to be published in the Journal of Financial Economics, which analysed 48 currencies against the US dollar from 1976 to 2010. The research provides the most comprehensive analysis of momentum risk and returns in currency markets to date.
Ethanol Climbs to Two-Week High as U.S. Corn Sales Gain
Ethanol climbed to a two-week high in Chicago on concern that global demand for U.S. corn will eat into reserves. Futures gained for a third day, the longest streak since March 13, after the Agriculture Department said exporters sold 1.44 million metric tons of corn for delivery in the 2012-2013 marketing year that starts Sept. 1, the biggest sale in 18 years. One bushel of the grain makes at least 2.75 gallons of ethanol in the U.S.
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