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Commodity markets rattled by Ukraine airplane disaster

Posted on 21 July 2014 by VRS  |  Email |Print

Global commodity markets were gripped this week by the Malaysian air crash, which has dramatically raised tensions between Russia — a key producer of many raw materials — and the West. The doomed Malaysia Airlines MH17 flight, which crashed killing 298 people on Thursday, was “likely downed” by a surface-to-air missile fired from separatist-held eastern Ukraine, a US envoy said on Friday.
Investor sentiment was already hit by broadened US sanctions on Russian energy, defence and financial firms to punish what Washington charges are violations of Ukraine´s sovereignty.”If Russia turns out to have played any part in (Thursday´s) shooting down of a passenger plane over east Ukraine, there is a risk of sanctions being further tightened,” Commerzbank analysts said in a research note………………………………………..Full Article: Source

The Peak Oil Crisis: Iraq on the Precipice

Posted on 03 July 2014 by VRS  |  Email |Print

The daily newspapers are now full of stories predicting that Iraq, as we know it, will soon disintegrate into three or more warring states. In the last two weeks Sunni insurgents led by the extremist ISIS have routed a good part of the Iraqi army, taken over much of northern Iraq not controlled by the Kurds, and now are moving close to Baghdad.
Despite the dispatch of American and Iranian military advisors to at least assess the situation, most observers say government forces are too weak to drive back the insurgents and retake the lost territory. Washington is refusing to get involved unless the Shiite-dominated Iraqi government makes radical changes in its relations with the Sunnis and Kurds………………………………………..Full Article: Source

Will Iraq crisis keep bulls away from commodity markets

Posted on 24 June 2014 by VRS  |  Email |Print

Commodity markets have been fickle during past few years, as an event seemingly trivial transforms into a significant phenomenon. Things are going to be no different in the near future, whereby investor’s sentiment and allocation of funds undergo persistent flux. Geopolitical dynamics, shift in sovereign monetary policies, transition in global economic trajectory and several other variables constantly linger in the minds of the market participants.
Gazing at the crystal ball to predict the factors which can determine the future course is simply an attempt in futility. The dust has never settled down as far as economic issues and policies in various geographies are concerned. Markets continue to be influenced by events and monetary policy stance adopted by various central banks across the globe………………………………………..Full Article: Source

The best way to profit from the commodity bust

Posted on 27 August 2013 by VRS  |  Email |Print

What happens to a forest after a forest fire? More often than not, it grows back even healthier than before. Trees damaged in a fire typically die within two years, and dead vegetation falls to the ground. The remaining snags provide a habitat for wildlife and eventually fall to the forest floor, becoming a long-term source of nutrients. It’s a process of creative destruction.
Financial markets can behave the same way. They can crash and burn, clearing out irrational excess in order to build a foundation of sustainable growth. Two prime examples: the tech bubble of the late 1990s and the so-called commodities supercycle………………………………………..Full Article: Source

Next global crash could come next year

Posted on 14 August 2013 by VRS  |  Email |Print

Despite the continued economic stimulus policies across the world since the 2008 financial crisis, the global economy is likely to face another crash next year, according to U.S.-based economic forecaster Harry Dent.
He says the world faces three major short-term risks: falling commodity prices, a depression in southern Europe and the bursting of China’s real estate bubble. Regarding the outlook for the U.S. economy, Dent, who has for decades followed the booms and busts of the global economy, remained skeptical………………………………………..Full Article: Source

Pitfalls of investing in commodities

Posted on 12 August 2013 by VRS  |  Email |Print

In the last 10 years, commodities have been one of the best performing assets, giving high double-digit returns to investors. This is best exemplified by gold, that has nearly quadrupled in value (in dollar terms) since 2003 and was up five times in rupee terms in the last decade. In comparison, the benchmark S&P BSE Sensex is up around 4.7 times since the middle of 2003.
Gold’s performance in the last five years has been even more spectacular. In the domestic bullion market, gold prices have appreciated at a compounded annual growth rate (CAGR) of 18.6 per cent since 2008, much higher than the 4.2 per cent CAGR return delivered by the National Stock Exchange’s 50-stock Nifty index during the period………………………………………..Full Article: Source

The case against commodities grows

Posted on 25 July 2013 by VRS  |  Email |Print

Buying commodities in order to diversify your portfolio might not be that bright an idea after all. A new study from the Bank for International Settlements disputes the idea that adding commodities to a portfolio can lower the volatility of returns. Considering that this has been the bedrock idea underlying the buying and selling of commodities as an asset class over the past 15 years or so, this is big news.
Taken in combination with trends negative for commodities markets like the migration of manufacturing back to developed markets and 3-D printing, there may be fewer reasons for investors to consider the asset class………………………………………..Full Article: Source

China bubble to end commodities supercycle: Chanos

Posted on 18 July 2013 by VRS  |  Email |Print

The credit bubble in China is “world-class” and is getting “worse and worse and worse,” hedge fund manager Jim Chanos said. The deteriorating credit situation “has worked its way through things like steel, cement, [and] commodities globally,” the founder of Kynikos Associates said.
Chanos, who first raised concern about China in 2009, added that he’s “seeing arguably the end of the commodities supercycle,” the boost for raw materials fueled by the rise of the economies of China and other emerging markets………………………………………..Full Article: Source

Fitch: Commodity price fall impact to vary across APAC

Posted on 18 July 2013 by VRS  |  Email |Print

Fitch Ratings says in a new report that a significant price fall in commodities will have varying impact across Asia Pacific economies, depending on their economic structures and policy response.
The report assumes a shock price fall in the range of 30%-40% within a period of six to 12 months, as balancing forces, such as policy response, are likely to counteract the shock in the medium- to long-term. The analysis covers seven APAC countries, including six that have a higher than median dependence on commodities………………………………………..Full Article: Source

OPEC says commodity supercycle waning, little upside

Posted on 11 July 2013 by VRS  |  Email |Print

The commodity market’s “supercycle” of strong growth is waning, OPEC said on Wednesday, with commodity prices currently in transition mode to slower growth rates. OPEC (the Organization of the Petroleum Exporting Countries) joined a chorus of analysts who have been warning for several months that the era of high prices for commodities is ending.
The group cited a slowdown in emerging economies, in particular China, coupled with decelerating foreign investment in those markets, as an explanation………………………………………..Full Article: Source

Commodities: Too early to become positive, says Credit Suisse’s Merath

Posted on 05 July 2013 by VRS  |  Email |Print

Tobias Merath, head of Commodity and Alternative Investments Research at Credit Suisse, says market conditions for commodities remain challenging.In late June, prices sold-off following a period of stabilization.
The broad-based commodity indices are all down year-to-date. We think a rebound is possible in some markets but would not expect a broad move higher. Instead, leading economic indicators suggest that investors should remain cautious for now. In order to assess the outlook for commodity markets, we mainly look at three factors: cycle, valuation and technical analysis. On the cyclical side, there is currently not much impetus………………………………………..Full Article: Source

Three reasons commodities look horrible: Roubini strategist

Posted on 04 July 2013 by VRS  |  Email |Print

It’s been one of the worst investments of 2013—and this Roubini strategist thinks it will get even worse. Gold, copper and grain prices have dropped precipitously this year. In fact, JPMorgan’s commodity team recently used that as a reason to get bullish on the space.
“In a number of commodities, prices have fallen far enough for long enough to force involuntary cuts in production and to spur fresh demand,” JPMorgan’s note read. In fact, JPMorgan said that “Sentiment is universally bearish,” creating some real opportunities………………………………………..Full Article: Source

UBS rates commodities ‘underweight’ as equities seen advancing

Posted on 03 July 2013 by VRS  |  Email |Print

The commodity supercycle has ended and investors should reduce their holdings in raw materials, especially gold, and buy equities, UBS AG said.
Slow economic growth in the U.S. will boost equities more than commodities and reduced quantitative easing by the U.S. Federal Reserve will be negative for gold, Stephane Deo, a strategist at UBS in London, said in a report dated today. Industrial metals are rated “underweight” on increased supply and slower growth in top consumer China……………………………….Full Article: Source

Will bust follow commodities boom in Australia? (Video)

Posted on 03 July 2013 by VRS  |  Email |Print

Australia has proved resilient during the global economic downturn, with the commodities boom a key factor driving its economy in the right direction. But there are fears that a slowdown in Chinese manufacturing could depress demand for iron ore and other Australian raw materials.
The BBC’s Linda Yueh reports from Port Hedland, an Australian town shaped by the commodities boom……………………………….Full Article: Source

Amid commodities declines, don’t forget nat gas ETFs

Posted on 03 July 2013 by VRS  |  Email |Print

As a group, commodities performed miserably in the second quarter. The 8% decline for the PowerShares DB Commodity Index Tracking ETF tells the story, but it was gold and silver that garnered the bulk of the press.
Investors should not forget that natural gas futures also suffered through a dismal second quarter. The U.S. Natural Gas Fund, which tracks natural gas futures, plunged almost 14% last quarter due to soaring inventories and mild weather after getting a lift in the first quarter due to low temperatures in some parts of the U.S. On June 27, UNG tumbled to its lowest levels since February due to rising inventories and mild weather forecasts……………………………….Full Article: Source

7 reasons to avoid commodities and why they’re wrong

Posted on 02 July 2013 by VRS  |  Email |Print

One of the most contentious debates in finance is whether investors should consider including an allocation to commodities in their portfolio. The reason for considering including commodities is that they act as a form of portfolio insurance.
Commodities have been shown to hedge the risks of unexpected inflation, tending to perform best during periods of rising inflation, when nominal return bonds do poorly. Commodities also have been shown to hedge supply shocks that hurt stock returns (such as the oil embargo of 1973-74), though not demand shocks to the economy (such as the financial crisis of 2008). ……………………………….Full Article: Source

Benchmark rules risk commodities chaos

Posted on 02 July 2013 by VRS  |  Email |Print

Commodities traders and price reporting agencies could see their greatest fears realised after the European Commission outlined new proposals for the regulation of commodities benchmarks. Market participants say these threaten to make the market more opaque.
The proposals, which include holding commodities price contributors liable for their submissions, are part of the wider EC draft regulation on benchmarks, seen by Financial News, due to be published in the coming months………………………………..Full Article: Source

How to profit from a continued commodities slump

Posted on 01 July 2013 by VRS  |  Email |Print

Commodities appear to be in freefall with lots of catalysts being thrown around: a stronger dollar index, changes in the global macro-economic outlook, core PCE inflation in the U.S still slowing, and the Fed openly contemplating tapering its asset-purchase program. All of these factors are likely to put commodities under further selling pressure.
Naturally, investors can still profit from declining commodities by shorting companies that have high exposure to them or by purchasing ETFs with an inverse exposure to commodities………………………………….Full Article: Source

Anglo American chief fears China cash crunch will hurt commodities demand

Posted on 28 June 2013 by VRS  |  Email |Print

The new chief executive of Anglo American PLC said he fears a cash crunch in China will curb investment in the world’s second-largest economy, hurting commodities demand at a time when mining companies are grappling with high costs and low prices.
In an interview with The Wall Street Journal, Mark Cutifani said the fallout from Beijing squeezing the Chinese financial system as a warning to overenthusiastic lenders was a concern, though he added policy makers needed to act swiftly to prevent a credit bubble………………………………………..Full Article: Source

Is it the end of the commodity super cycle?

Posted on 24 June 2013 by VRS  |  Email |Print

After enjoying a historical bull run, commodity prices have cooled down in the past year and are likely to be in a subdued territory for some years, according to a Deutsche Bank report. What drove the cycle? Strong demand from emerging markets, especially China and India. Liquidity fuelled by policy response to mitigate the global financial crisis. Rush towards gold as inflation hedge and a safe haven. Geopolitical concerns about stability of oil supply.
What’s driving the correction? Slowing down of the Chinese economy. Using commodities as an inflation hedge has lost its attractiveness as a strategy. Global policy risks have abated. Commodity demand projections are muted………………………………………..Full Article: Source

Despite the commodity boom, Brazil is close to boiling point

Posted on 20 June 2013 by VRS  |  Email |Print

People have lost faith in the political process - protests over bus fares and the cost of hosting the Fifa World Cup have become a vehicle for anyone unhappy about anything.
How should a government respond when it is the target of nationwide protests? Swedish leaders reacted by wringing their hands and empathising, Turks by calling counter-demonstrations, Syrians by shooting the demonstrators………………………………………..Full Article: Source

Industrial commodities to stay subdued till Sept-Oct

Posted on 07 June 2013 by VRS  |  Email |Print

A subdued trend is likely to continue in industrial commodities until the third quarter of the current calendar year, due to weak global economic sentiment which has reduced their demand from consumer industries.
After a robust start at the beginning of this year, industrial commodities fell substantially due to lack of a clear direction from the US, the world’s largest economy. The average price of Brent crude oil, for example, is expected to fall from $113.19 a bbl in the first quarter of 2013 to $110 in the second and third quarters. Similarly, the average iron ore price is set to decline from $148 a tonne in Q1 to $125 a tonne in Q2 and further to $115 and $110 a tonne in Q3 and Q4, respectively……………………………………Full Article: Source

Industrial commodities to remain under pressure on cost pressure

Posted on 06 June 2013 by VRS  |  Email |Print

With many commodity prices in retreat over the past six months, the newly elevated production cost base will prevent further substantial falls in prices for most industrial commodities, Credit Suisse said in a report.
But, in near term, however, the price fall would continue due to falling demand from consumer industries. Over the past couple of weeks financial markets have become increasingly nervous about the possibility that the Fed would begin to taper its program of asset purchases in coming months………………………………………..Full Article: Source

Bad news for commodities as China likely to slow further

Posted on 30 May 2013 by VRS  |  Email |Print

For commodity traders, there is more bad news in store. The International Monetary Fund (IMF) has cut its forecast for China’s growth from earlier estimates of 8 per cent to 7.75 per cent for 2013. This follows weak data coming from the country. The biggest impact of a slowing China will be felt in the ‘hard commodities’ (mainly metals) markets. 
China was the reason for a major bull run in these commodities till 2007 on account of its huge requirement and spending in the run-up to the Beijing Olympics. However, a lull in spending by the country resulted in a downward slide in international prices of these hard commodities………………………………………..Full Article: Source

Latin America disappoints after squandering commodity boom

Posted on 30 May 2013 by VRS  |  Email |Print

Latin America is disappointing investors, economists and businesses with slower-than-forecast growth as waning commodity prices and strong currencies hit nations that failed to diversify and become more competitive.
The five biggest investment-grade markets in the region — magnets for foreign capital as rich countries stalled –expanded below projections or show signs of weakness. Mexico’s and Brazil’s gross domestic product missed estimates in a Bloomberg survey. Economists polled by Brazil’s central bank cut the country’s 2013 outlook this week for the second time in seven days, anticipating the worst three-year period in a decade………………………………………..Full Article: Source

Australia: Treasury ’surprised’ by commodities slump

Posted on 22 May 2013 by VRS  |  Email |Print

Treasury secretary Martin Parkinson concedes his department has struggled to keep pace with a ‘‘tumultuous’’ decade for the Australian economy. Addressing an economists’ lunch in Sydney, Dr Parkinson said the difficulty Treasury and other economic forecasters had had was predicting the path of global commodity prices, the exchange rate and capital gains.
‘‘While our forecasts for the real economy have held up reasonably well, the same can’t be said of our price forecasts,’’ he told Australian Business Economists. Dr Parkinson said Treasury’s forecasts for employment and wages had been relatively accurate, which meant that for income tax, the largest source of government revenue, they had changed little since last year’s budget……………………………..Full Article: Source

Commodity fears and China trouble fund managers

Posted on 16 May 2013 by VRS  |  Email |Print

Even as stocks continue their mostly uninterrupted path to higher ground, fund managers are holding relatively big amounts of cash while worrying about China and a commodities crash.
The latest survey from Bank of America Merrill Lynch shows that the biggest fear is a hard landing for China’s slowing economy, and the effect it would have on the global commodity trade. Commodity allocations have fallen to a four-year low while cash allocations held steady at 4.3 percent, a surprise considering how much equities have rallied…………………………………….Full Article: Source

Commodities and gold flash warnings for world economy

Posted on 18 April 2013 by VRS  |  Email |Print

Commodity prices have been falling since September, culminating in a rout over the past two weeks. That is a classic warning for the global economy. It is becoming ever clearer that the roaring boom in global equities since last summer has priced in an economic recovery that does not in fact exist.
The International Monetary Fund has had to nurse down its global growth forecasts yet again. We are still stuck in an old-fashioned trade depression, with pervasive over-capacity in manufacturing plant and a record global savings rate of 25pc of GDP…………………………………Full Article: Source

Falling commodity prices, slowing global growth stir deflation thoughts

Posted on 18 April 2013 by VRS  |  Email |Print

The sharp drop in gold prices in the past few trading days has overshadowed some general weakness in the commodity sector and coupled with lower-than-expected U.S. inflation data, some market watchers are beginning to talk about the possibility of deflation.
Gold rebounded slightly on Tuesday and Wednesday from the sharp drop in prices on Friday and Monday, but still remains 17% off the high for the year and 28% from the all-time high, based on the June Comex contract’s settlement Tuesday of $1,387.40 an ounce. But other commodity markets are also weaker for the year, including crude oil, down 5%; copper, down 10%; and corn, down 8%, all based on Tuesday’s settlements for the most-active futures contracts…………………………………Full Article: Source

As gold plunges, which commodities are joining it?

Posted on 17 April 2013 by VRS  |  Email |Print

Although the U.S. stock market has generated a healthy glow this year, the commodity complex appears to be entering into a growling bear market. Just consider these stats: After a sharp drop on April 15, gold has plunged nearly 20% since the year began and nearly 30% since hitting an all-time high of around $1,900 per ounce in the autumn of 2011.
West Texas crude oil has slipped from $97 per barrel to $87 in just the past two weeks. Copper has slid roughly 12% this year and is off roughly 27% since the summer of 2011 peak. If aluminum breaches the 80 cents per pound mark (it’s currently at 82 cents), it will see its lowest levels since the summer of 2009…………………………………….Full Article: Source

Commodity supercycle is basically over, says Citi

Posted on 16 April 2013 by VRS  |  Email |Print

Citi Research has called an end to the supercycle for commodities but that shouldn’t come as a surprise given that it warned of a supercycle “sunset” back in March of last year. In a report dated Friday, Citi said it expects 2013 to be year in which “the death bells ring for the commodity supercycle after its duly noted sunset.” A supercycle refers to decades-long price movements.
The commodities sector saw broad losses on Monday, with gold futures logging their biggest one-day drop since the 1980s on Monday, and oil futures finishing at their lowest settlement level of the year………………………………………..Full Article: Source

‘Commodities meltdown to continue’: Pro

Posted on 16 April 2013 by VRS  |  Email |Print

The price of gold, as well as other commodities, could have farther to fall, Joe Terranova of Virtus Investment Partners said. “The commodities meltdown, I think, is going to continue,” he said. “And I think to figure out exactly if this is a moment where you step in and in essence buy a falling knife, you have to look back toward the past.”
On CNBC’s “Fast Money,” Terranova pointed to a high in gold back in September 2011. “That’s exactly when we had that deficit debacle in Washington, D.C.,” he said. “Gold should’ve gone higher at that point. It did not.”……………………………………….Full Article: Source

Only a fool would invest in commodities now

Posted on 16 April 2013 by VRS  |  Email |Print

We just saw a rather ugly spate of data from China, and the result has been a bit of a selloff in markets, from Asia to the U.S. Not all stocks have been held back. Netflix, for instance, just had its price target raised at Goldman Sachs and rallied 5% to start the week. But commodity stocks as a whole are taking a beating. And don’t expect the pain to end anytime soon.
You see, industrial demand from China remains the single-biggest driver of pricing for a host of materials and commodities. Base metals, from steel to copper to aluminum, and energy commodities like oil and coal and natural gas are all getting brutalized by the China slowdown………………………………………..Full Article: Source

Commodities crushed! Don’t blame China

Posted on 16 April 2013 by VRS  |  Email |Print

The sell-off in commodities is getting serious in early trading on Monday. Word of Chinese GDP coming in at 7.7% against 8% expectations last night is being blamed, but today isn’t the start of the selling.
Brent crude is down 3%, but was already 15% lower that where it traded in February. Copper is near 18-month lows, aluminum is near 3-year lows and silver is down double-digits today alone………………………………………..Full Article: Source

Commodity crash 2013: Insights on commodities from hell

Posted on 16 April 2013 by VRS  |  Email |Print

That’s a headline that should get your attention if you invest in commodities (or if you work at a publicly traded company that has any exposure to the commodity markets). With increasing evidence of a slowing global economy and increased selling of gold by central banks, commodities are vulnerable. While evidence suggests that the ENTIRE commodity market is experiencing unusual price deterioration right now, I want to focus on a distinct commodity segment: Commodities from Hell.
Get it? Commodities from Hell, ones that can generally be found underground such as gold (GLD), silver (SLV), coal (KOL), copper (JJC), steel (SLX), oil (OIL) and natural gas (UNG)………………………………………..Full Article: Source

Even another Cyprus-style crisis can’t save gold

Posted on 28 March 2013 by VRS  |  Email |Print

Since the bailout deal was reached on Cyprus, the gold price has fallen. The decline suggests that gold is really in a weak position right now. I think the price is likely to fall further. Here’s why.
The major global stock markets are doing really well this year: the S&P 500 is up about 10 percent, U.K. stocks are up about 1 percent in dollar terms and Japanese stocks up about 10 percent. Even with all the problems in Europe, the Euro Stoxx index is down only about 2 percent in dollar terms. By contrast, gold and silver are down about 5 percent. Platinum and palladium have also outperformed gold and silver. In fact it’s hard to find any commonly held assets that have fallen as much as gold and silver………………………………………..Full Article: Source

Commodity booms, busts and bubbles

Posted on 26 March 2013 by VRS  |  Email |Print

Commodity markets are prone to bubbles, but like the ones in bathtubs, they don’t last. So concluded one of several interesting papers on commodity price fluctuations discussed at an International Monetary Fund seminar last week.
Researchers at the University of Illinois examined agricultural futures price data from 1970-2011 and found a spate of bubbles running through multiple markets. Sugar, soyabean and cotton markets underwent them with regularity………………………………………..Full Article: Source

China commodities ripple starts slowly

Posted on 14 March 2013 by VRS  |  Email |Print

As China’s economic growth fell to 7.8 per cent last year, its slowest pace in more than a decade, commensurate demand for commodities such as iron ore, copper and coal also slowed to single-digits, sending traders scrambling amid fears of a “hard landing” for the Chinese economy.
This year, though the “hard landing” has been averted, China’s anaemic demand growth for commodities is still sending ripples through the Chinese raw materials market, which had become accustomed to double-digit annual growth…………………………………….Full Article: Source

Prices tumble after talk of hedge fund in trouble

Posted on 21 February 2013 by VRS  |  Email |Print

Commodities tumbled on Wednesday amid speculation a hedge fund had been forced to liquidate positions across metals and oil markets, and gold fell to more than a seven-month low on worries that the U.S. economic stimulus may soon dry up.
Already under pressure from ongoing concerns about global supply and demand, commodity markets tumbled in high volume trade just before 11 a.m. EST (1600 GMT), with oil and gasoline prices dropping about 2 percent each……………………………………Full Article: Source

Choppy ride for commodity, energy markets in 2013

Posted on 13 February 2013 by VRS  |  Email |Print

A very common question always puzzles me as to how it can be answered as precisely as it is asked. At the beginning of every year analysts are popped a question, “How are commodity markets looking in the coming year?” Though the question is very simple the answer can’t be simple.
That’s because the commodity markets are a complex web of commodities driven by various segments of the economy and influenced by a wide array of fundamentals, from the weather to labour unrest, natural calamities to policy actions, and the health of the global economy and demand prospects. Let’s look at what could be in store for 2013………………………………………..Full Article: Source

High crude price biggest worry for global economy: IEA

Posted on 01 February 2013 by VRS  |  Email |Print

High Brent crude prices could dent a global economic recovery while Europe’s economy holds the key to determining world oil demand in 2013, the chief economist of the International Energy Agency said on Thursday.
Brent crude hovered near $115 per barrel on Thursday, not far from a more than three-month high, as the U.S. Federal Reserve’s pledge to stick to its bond-buying stimulus plan and upbeat Euro zone data fuelled optimism about oil demand. ……………………………………….Full Article: Source

China won’t cause a commodity crash (yet)

Posted on 22 November 2012 by VRS  |  Email |Print

Edward Morse at Citi (via Business Insider) has made a bearish call on the commodity supercycle based on a slowing Chinese economy and re-balancing growth away from infrastructure spending toward the consumer.
I beg to differ. The secular commodity bull cycle is not ending this cycle, but in the next downturn. That’s because the new leadership are not reformers, and these “princelings” are showing little inclination to re-balance growth away from SOEs and big ticket projects, where many of the elites made their money, toward the household sector, which would benefit the Chinese economy longer term but would gore the CCP cadres’ ox………………………………………..Full Article: Source

Bullish bets on commodities slide on slowdown fears

Posted on 30 October 2012 by VRS  |  Email |Print

Speculators lowered bullish wagers on commodities for the third straight week, the longest streak since April, as prices erased this year’s gain on mounting concern about slowing economic growth.
Hedge funds cut net-long positions across 18 US futures and options by 0.2% to 1.18 million contracts in the week ended October 23, the lowest since July 24, US Commodity Futures Trading Commission data show. Copper holdings fell the most in seven weeks, and sugar wagers dropped to a one-month low. Bullish bets on gold slumped the most in three months………………………………………..Full Article: Source

Protect against a commodities meltdown

Posted on 30 October 2012 by VRS  |  Email |Print

Booming growth in developing markets, coupled with inflationary money-printing in the U.S. and Europe, helped fuel a bull market in commodities for a dozen years. Today, though, Wall Street is flashing a yellow light: Commodity bugs had better scoot to avoid being squashed by the global slowdown.
“The secular bull market in commodities is done,” says Jeff Weniger, senior investment analyst at Harris Private Bank. “Finished. Kaput.” Don’t let the recent rise in prices for oil (partly caused by unrest in the Middle East) and corn (the drought in the Midwest) fool you………………………………………..Full Article: Source

China economy ‘clearly’ suffers, SocGen’s commodities chief says

Posted on 17 October 2012 by VRS  |  Email |Print

China’s economy is suffering as crisis in the developed economies begins to have a “knock-on effect” on the emerging markets, said Jonathan Whitehead, the global head of commodities markets at Societe Generale SA. (GLE).
“Clearly, China is suffering,” Whitehead said. “To what extent, we don’t know.” While outlook for commodities markets used to be defined by China’s economic growth, it now also largely depends on the developments in Europe, he said………………………………………..Full Article: Source

Commodities at risk as Euro crisis jitters threaten sentiment trends

Posted on 11 October 2012 by VRS  |  Email |Print

Commodity prices appear vulnerable to risk aversion driven by rising Eurozone sovereign stress. The Fed’s Beige Book is in focus on the economic calendar. Commodities came under pressure overnight as broad-based risk aversion plays out across financial markets.
The MSCI Asia Pacific regional benchmark equity index fell 0.8 percent. Newswires cited guidance in the third-quarter earnings report from Alcoa Inc as the catalyst for the dour mood. While the leading aluminum producer’s results beat analysts’ estimates after adjusting for a handful of special items, its forward guidance warned of the dangers posed by a slowdown in China and carried a downgrade in the outlook for demand………………………………………..Full Article: Source

Trading the commodity slump

Posted on 10 October 2012 by VRS  |  Email |Print

It could be due to mild dollar strength or outside market influence, but we’ve seen a number of declines in the commodity sector in recent weeks and months. I’m going to jump around to some of the major commodities, identify their moves of late and opine on whether they’re likely to continue heading south.
In the energy complex, crude oil has traded down from the $100-per-barrel level, shedding just over $10, or 10%. This move has happened within the last three weeks and, in my eyes, prices could see an additional $3 to $5 of deprecation before this leg is complete………………………………………..Full Article: Source

Commodity weakness doesn’t have to hit currencies

Posted on 09 October 2012 by VRS  |  Email |Print

When investors aren’t worrying about euro-zone survival, employment growth in the U.S., what Israel may be planning for Iran or what Iran may be planning for the Strait of Hormuz, they worry about the end of the commodity boom.
As realization slowly dawns that even China isn’t insatiable, and that slowing old economies eventually mean slowing new economies too, the currencies that benefited most from rising commodity prices attract ever more jaundiced scrutiny. Every week another ‘is the game up for the Australian dollar?’ piece appears, with metronomic regularity, from one analyst’s cloister or another………………………………………..Full Article: Source

Commodities may fall on euro belt-tightening

Posted on 01 October 2012 by VRS  |  Email |Print

Commodities are on the upswing in early trade amid a broad-based advance in risk appetite as traders encouraged by yesterday’s release of an ambitious Spanish budget await a similar result from France. Sentiment-linked crude oil and copper prices are following shares higher while gold and silver are buoyed by ebbing haven demand for the US dollar.
Optimism may be fleeting however. Economists expect Paris will run a deficit equivalent to 4.6% percent of GDP this year, the highest among the core members of the euro zone. This means President Francois Hollande and company may be forced to press on with tax hikes and/or spending cuts, both of which would compound headwinds for already anemic growth………………………………………..Full Article: Source

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Commodities drop on demand concerns amid Europe discord on debt

Posted on 25 September 2012 by VRS  |  Email |Print

Jonathan BarrattCommodities fell, heading for the first monthly decline since May, as discord over Europe’s debt crisis and fading business optimism in China pointed to a deeper slowdown that may reduce demand for energy, metals and grains.
The Standard & Poor’s GSCI Spot Index of 24 raw materials fell 0.9 percent to settle at 657.68 at 4 p.m. New York time, led by cocoa, silver and aluminum. The gauge slid 4.4 percent last week, the most since June 1, and has dropped 2.6 percent this month………………………………………..Full Article: Source

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