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UBS: Gold is setting up for a big comeback

Posted on 14 October 2016 by VRS  |  Email |Print

Gold is set for a comeback six to 12 months from now, according to UBS. As long as the Federal Reserve sees no reason to raise interest rates in a hurry, gold should do well, according to strategists at the bank’s Chief Investment Office Wealth Management Research arm.
They see gold prices climbing to $1,350 per ounce over the next year, up 7% from its current level. Because gold does not bear any interest, it loses appeal when rates rise and investors go after better alternatives……………………………………Full Article: Source

Commodities on track for first positive year since 2010

Posted on 13 October 2016 by VRS  |  Email |Print

Commodities remain on track to record their first year of positive returns since 2010. But with the Bloomberg Commodity index up by less than 10%, it could all still change before year-end. While the energy sector continues to stabilise following a two-year selloff, it has primarily been the precious metals sector with its 26% gain that has helped stop the commodity rout, Ole Hansen, Head of Commodity Strategy at Saxo Bank has said.
Global commodity demand has yet to recover as continued questions about global growth are being asked. Instead, most of the gains – apart from those seen in precious metals – have been due to the supply side adjusting, either through cutting production (oil and industrial metals) or through involuntary disruptions caused by weather (softs), he said in a note……………………………………..Full Article: Source

Surplus: Oil glut to last until mid-2017, says IEA

Posted on 13 October 2016 by VRS  |  Email |Print

A massive oil glut may weigh on world markets deep into next year unless the OPEC producer cartel makes good on its promise to cut output, the International Energy Agency (IEA) said. The oil price has recovered steadily since OPEC said last month that it would reduce production, with details to be hammered out at the cartel’s November meeting, and such a deal would “speed up the process” of working off global oil inventories, the IEA said in its monthly report.
“Even with tentative signs that bulging inventories are starting to decline, our supply-demand outlook suggests that the market- if left to its own devices- may remain in oversupply through the first half of next year,” the IEA said……………………………………..Full Article: Source

Gold price ‘uptrend is over’, says ABN Amro

Posted on 13 October 2016 by VRS  |  Email |Print

The gold price “uptrend is over”, Dutch bank ABN Amro analyst Georgette Boele has said in a note to clients, reports BullionVault. Mounting speculation that the US Federal Reserve will increase interest rates again before the end of the year is weighing on sentiment towards the metal and Boele says a host of technical indicators suggest its 2016 rally has run out of steam.
Rising interest rates are bad news for non-yielding gold, as this boosts the attraction of alternative, income-paying assets. It also tends to help the dollar, against which gold is held as a hedge……………………………………..Full Article: Source

Our Bullish Gold Price Prediction for the End of 2016

Posted on 13 October 2016 by VRS  |  Email |Print

Gold prices have fallen more than 4% in October, but our latest gold price prediction shows prices climbing by the end of 2016. In fact, Money Morning Resource Specialist Peter Krauth believes gold prices will climb by double digits before 2017.
But before we share Krauth’s 2016 gold price prediction, we wanted to make sure Money Morning readers understood why gold prices are so volatile right now. On Oct. 4, gold prices dropped $43 in just one day. “Most pundits are saying gold prices dropped because the U.S. dollar rallied after Richmond Fed President Lacker made his case for raising rates,” Krauth said on Oct. 7……………………………………..Full Article: Source

Citi Not Expecting Quick Silver Return To August Highs

Posted on 13 October 2016 by VRS  |  Email |Print

Citi Research is not looking for silver to regain its highs from August any time soon. Spot silver broke below $18 an ounce on Oct. 4 for the first time in three months, following the initial European Central Bank announcement to potentially taper the bond-buying program, Citi says.
“The same day saw the gold:silver ratio jump to 71x (times) — from a 2H’16 average of 68x — during intra-day trading as silver price returns fell below 30% YTD (year to date) for the first time since June,” Citi says……………………………………..Full Article: Source

Here Is One Sign That the Global Economy Is Weakening

Posted on 13 October 2016 by VRS  |  Email |Print

Global foreign direct investment flows are set to fall by 10-15% to $1.5 to $1.6 trillion this year, according to United Nations data. “Business are very reluctant to invest [cross-borders],” said James Zhan, director of investment and enterprise at the United Nations Conference on Trade and Development, based in Geneva, Switzerland.
“This is due to sluggish economic growth and the fragility of the global economy.” He also said upcoming political elections in various countries this year adds extra uncertainty. Global foreign direct investment flows are expected to rebound in 2017 and 2018, as global economic growth is expected to accelerate……………………………………..Full Article: Source

Commodities Increased in September due to Supply Fundamentals in Agriculture and Energy

Posted on 12 October 2016 by VRS  |  Email |Print

Commodities increased in September, broadly due to supply fundamental factors, according to Credit Suisse Asset Management. The Bloomberg Commodity Index Total Return performance was positive for the month, with 18 out of 22 Index constituents posting gains.
Credit Suisse Asset Management observed the following: Industrial Metals was the best performing sector, up 5.21%, led by Nickel amid reports that the Philippines may suspend additional mines for failing to meet environmental standards as a result of the government’s audit. Agriculture ended 4.25% higher. Sugar gained the most as UNICA, the Brazilian Sugarcane Industry Association, reported lower-than-expected domestic cane yields. In addition, the International Sugar Organization forecasted a global sugar deficit for the 2016-2017 season……………………………………….Full Article: Source

The key to the commodity surge puzzle

Posted on 12 October 2016 by VRS  |  Email |Print

The continuing surge in commodity prices is causing some head-scratching, as resource sector executives and analysts try to come to conclusions about its sustainability. The oil price hit a year-high of $US52.92 a barrel overnight, as the prospects of an OPEC-led production cut, or at least freeze, appeared to strengthen.
Coal prices have soared, with metallurgical coal above $US200 a tonne and thermal coal above $US80 a tonne. The iron ore price rose 2.6 per cent to $US55.80 a tonne overnight……………………………………….Full Article: Source

BofA Merrill Revised Nonferrous Metals Price Forecast for 2016

Posted on 12 October 2016 by VRS  |  Email |Print

Bank of America Merrill Lynch (BofA Merrill) said October 7 it revised price forecast for major nonferrous metals in 2016, according to wenhua.com. It expects the average copper price to be $4,734 per tonne in 2016, compared to $4,828 per tonne it had expected earlier. The bank lowered its price forecast for aluminum from $1,597 to $1,589 per tonne in 2016.
Price forecast for zinc was revised upwardly from $1,987 to $2,061 per tonne, and that for nickel was revised from $9,269 to $10,019 per tonne. Lead prices are expected to average $1,855 in 2016, compared to $1,814 per tonne it had expected earlier……………………………………….Full Article: Source

Global economy and policies: A turning point

Posted on 12 October 2016 by VRS  |  Email |Print

Fundamental downward shift in advanced countries’ demand leads to fiscal supplementation of monetary policy efforts. While the world economy once more appears worse in the year’s second half, a regular feature of global growth forecasts from 2011, economic assessments and policy choices have reached a turning point.
Opinion across the board, including that of the International Monetary Fund (IMF), is convinced that the advanced countries are trapped in ‘secular stagnation’—this is underpinned by a trend decline in real interest rates from fundamental forces like demography (ageing), slowing productivity growth, lower public investments, and so on……………………………………….Full Article: Source

The global economy has entered unexplored, dangerous territory

Posted on 11 October 2016 by VRS  |  Email |Print

As the world’s finance ministers and central-bank governors came together in Washington last week for their annual global financial convocation, the mood was somber. The specter of secular stagnation and inadequate economic growth on the one hand, and ascendant populism and global disintegration on the other, has caused widespread apprehension.
Unlike in 2008 (when the post-Lehman Brothers crisis was a preoccupation) or 2011 and 2012 (when the possibility of the collapse of the euro system concentrated minds), there was no imminent crisis. Instead, the pervasive concern was that traditional ideas and leaders are losing their grip and the global economy is entering unexplored and dangerous territory………………………………….Full Article: Source

IMF, World Bank have no solution for global economic malaise

Posted on 10 October 2016 by VRS  |  Email |Print

The state of the global economy is of vital importance to the economic growth and well-being of small, highly open developing economies such as Jamaica.In the case of Jamaica, the price of the most important imports reflect conditions in the global economy, for example, oil and food.
Also, the global economy influences the main inflows of foreign exchange — tourism and remittances. Therefore, the discussions in international fora are not esoteric and irrelevant to what happens in the Jamaican economy. On the contrary, these discussions are vitally important. All the forecasts for the global economy suggest continued economic malaise, slow economic growth, uneven recovery, and growing inequality both between countries and within economies of all levels of development……………………………………….Full Article: Source

OPEC Myths, Market Misinformation and Oil Prices

Posted on 10 October 2016 by VRS  |  Email |Print

On September 28, OPEC oil ministers held an informal meeting in Algiers to consider a reduction in their aggregate oil output with the goal of boosting oil prices. They announced an agreement to reduce output to a range of 32.5 to 33 million barrels per day (that is a reduction of about 250 to 750 thousand barrels per day, or less than one percent of world output) at their subsequent regular meeting.
However, they left the details (how the reduction would be distributed among its 14 members) to a committee with the specifics to be adopted at their next scheduled meeting on November 30……………………………………….Full Article: Source

Global economy could ’self-destruct’ if world carries on burning fossil fuels

Posted on 07 October 2016 by VRS  |  Email |Print

Professor Lord Nicholas Stern – author of the influential Stern Review on climate change in 2006 – says ’strong investment’ in green technologies could finally revive growth in the world economy.
A renowned economist who helped persuade the world to start taking climate change seriously has warned the global economy could “self-destruct” if countries fail to ditch fossil fuels and embrace a clean, green, high-tech future……………………………………….Full Article: Source

IMF warns of risks to global economy as debt hits record $152trn

Posted on 06 October 2016 by VRS  |  Email |Print

Eight years after colossal amounts of bad loans caused a financial meltdown that almost sunk the global economy, total debt has hit a new record level of $152tn, the International Monetary Fund said on Wednesday. The amount is equivalent to two and a quarter times the size of the world economy, and is rising.
“The sheer size of debt could set the stage for an unprecedented private deleveraging process that could thwart the fragile economic recovery,” the IMF said………………………………….Full Article: Source

Merrill: Drop in gold might be a buying opportunity

Posted on 05 October 2016 by VRS  |  Email |Print

Investors should use the recent drop in gold prices as a buying opportunity, as increased volatility in the market ahead of a potential Fed interest rate hike could lead investors to seek refuge in the precious metal, according to Francisco Blanch, head of global commodities and derivatives research at Bank of America Merrill Lynch.
“Gold is really thriving on uncertainty, and frankly, on the end of the U.S. [rate] cycle whenever that happens,” said Blanch. The commodities expert believes that once the U.S. central bank decides to raise interest rates, potentially causing equities to sell off and the dollar to rally, investors will see gold prices stabilize and eventually trend higher…………………………………….Full Article: Source

The biggest threats facing the global economy in eight charts

Posted on 05 October 2016 by VRS  |  Email |Print

The IMF has released its latest outlook for the global economy. Here are eight charts that show the challenges the world faces in the coming years. UK crowned the fastest growing G7 economy… for now. The global recovery remains subdued. For the UK, the good news is that in the short term, the impact of the Brexit vote is likely to be limited.
Maurice Obstfeld, the IMF’s chief economist, said the UK would see a “soft landing” this year following the referendum result, as he said the market reaction had been “much more favourable than anyone would have anticipated”…………………………………….Full Article: Source

Global economy remains mired in swamp of low growth

Posted on 04 October 2016 by VRS  |  Email |Print

In true Sisyphean fashion, the world economy is faltering yet again, unable to gain much elevation and sliding back into the low growth morass it has been stuck in for some time.
Major advanced and emerging market economies appear to be converging to a low-growth environment characterised by weak investment, stagnant productivity and tepid private sector confidence……………………………………….Full Article: Source

Moody’s: Global integrated oil, gas business stabilizing

Posted on 04 October 2016 by VRS  |  Email |Print

The global integrated oil and gas business is stabilizing and will likely improve modestly from recent historical lows over the next 12-18 months, says Moody’s Investors Service in a recent report. The report—“Integrated Oil & Gas: Global Oil Price Uptick, Accelerated Cost Cuts Put Upstream Activities on Road to Recovery”—says higher oil prices and lower operating costs are driving a steady improvement in companies’ earnings.
“Over the last year, integrated oil and gas companies have accelerated reductions in their operating costs to adjust to earlier oil-price declines. As a result, most companies’ upstream operations returned to positive net income generation in the second quarter of 2016, while also benefiting from an uptick in the price of crude,” said Elena Nadtotchi………………………………………Full Article: Source

Four Commodities Markets Set Up for Bullish Moves

Posted on 03 October 2016 by VRS  |  Email |Print

These are rallies based on long-term fundamentals - follow the news and watch the chart patterns for value zones. Several markets have caught my eye recently because of spectacular price moves. And while they may be overbought at this time, the fundamental reasons for these rallies may have lasting effects that could carry over for several more months and maybe even into next year.
In other words, I believe the fundamental foundation has been laid in these markets for longer-term bull market rallies. However, over the short-run these markets may be a bit too pricey. I believe that these markets will maintain their upside bias over the next 3 to 6 months and that all investors have to do is wait for prices to retrace into value areas……………………………………..Full Article: Source

As Year-End Crash Avoided, Barclays Sees Commodity Gains in 2017

Posted on 30 September 2016 by VRS  |  Email |Print

Commodities will probably see a broad-based recovery next year after what’s expected to be an unusually strong performance in the final quarter as demand improves, investors plow funds into raw materials and the dollar shows signs of weakness, according to Barclays Plc.
Raw materials are poised to buck what’s been a trend in recent years for posting losses in the second half, analysts including Kevin Norrish wrote in a report on Thursday, which said that the bank expects fundamentals to improve into 2017. In the final months of 2016, commodities may perform robustly with oil prices poised to move higher, according to Norrish………………………………………Full Article: Source

Commodity sector rally set to be extended

Posted on 30 September 2016 by VRS  |  Email |Print

Supply/demand fundamentals may prove more supportive of prices. Nice timing from Barclays. The bank’s commodities research team put out a note midweek that argued the raw materials sector this year may shrug off its tendency for fourth-quarter weakness.
Cue the latest surge in oil prices. Barclays sees three reasons for a generally sturdy commodity sector performance in coming months. What it terms the macro environment is supportive. Asian economic growth is set to improve while the bank thinks the rally in the US dollar, which tends to have an inverse relationship with buck-denominated assets, is starting to fade………………………………………Full Article: Source

Goldman Sachs: OPEC Freeze Could Add $10 To Oil Prices

Posted on 30 September 2016 by VRS  |  Email |Print

Oil barrel prices could climb between US$7 and US$10 by the end of the first half of 2017, according to Goldman Sachs analysts. Yesterday, OPEC surprised nearly everyone and reached a deal to curtail oil production.
And now, if all members of OPEC strictly comply with their new quotas, which are to be (and that’s a reasonable “if”) agreed upon at the November meeting of the organization, Goldman is predicting a sizable recovery for the price of a barrel of oil. For this scenario to take place, all other circumstances on oil markets must remain unchanged………………………………………Full Article: Source

IMF warns against protectionist tendencies in global economy

Posted on 29 September 2016 by VRS  |  Email |Print

International Monetary Fund, or IMF, managing director Christine Lagarde said Wednesday that efforts should be made to turn back rising protectionist tendencies in the global economy. Lagarde spoke at a conference in Chicago a week ahead of the annual IMF-World Bank assembly.
The IMF managing director’s statements come as both major U.S. presidential candidates - Democrat Hillary Clinton and Republican Donald Trump - have become increasingly critical of free trade agreements on the campaign trail……………………………………Full Article: Source

No OPEC deal expected, though it would have had impact: CNBC Oil Survey

Posted on 27 September 2016 by VRS  |  Email |Print

OPEC producers could have a significant impact on oil prices if they agree to a production freeze, but it’s unlikely they’ll get it done at this week’s meeting in Algiers, according to a new CNBC Oil Survey.
Sixty-five percent of the survey respondents said no agreement is likely, while 52 percent said if producers could strike a deal, there would be a meaningful effect on crude prices. That may be because little more than half of the participants also said they believe the rebalancing of oil supply and demand is occurring more slowly than they had expected……………………………………..Full Article: Source

Global copper market sees deficit of 83k in June, 306K in H1: ICSG

Posted on 22 September 2016 by VRS  |  Email |Print

The global refined copper market for June showed an apparent production deficit of around 83,000 mt, mainly due to strong Chinese apparent refined copper demand, the International Copper Study Group said Tuesday.
When making seasonal adjustments for world refined production and usage, June showed a production deficit of about 47,000 mt, the ICSG said in its monthly report. The refined copper balance for the first half of 2016, including revisions to previous data, indicates a production deficit of around 306,000 mt, and a seasonally adjusted deficit of about 227,000 mt…………………………………….Full Article: Source

China & Commodities Recovering, BHP Upgraded

Posted on 21 September 2016 by VRS  |  Email |Print

Macquarie upgraded BHP Billiton (BHP) and two other Australia-based commodity miners Tuesday. “Stronger demand and impact of supply side reforms in China have enhanced the outlook for most bulk commodities. We have materially upgraded our forecasts for coking coal, thermal coal and manganese and upgrade BHP, South32 and New Hope to Outperform on the back of the improved outlook”
Macquarie’s commodities team has made a number of changes to its commodity price forecasts on the back of better than expected demand from China and also the impact of supply side reforms in coal………………………………………Full Article: Source

The Closing of the World Economy

Posted on 15 September 2016 by VRS  |  Email |Print

Pundits and policymakers everywhere are bemoaning the rise of a new, inward-looking populism. Led by the likes of Donald Trump and Nigel Farage, those who’ve felt only globalization’s ill effects, not its benefits, have mounted a fierce counterattack.
Border-hopping elites fret that the whole process of opening up and knitting together the world through trade, capital flows and immigration may soon go into reverse. They’re missing the point. Support for freer trade and greater openness had in fact begun to falter well before economic nationalists like Trump and Farage took center stage………………………………………..Full Article: Source

Poloz says China tops list of global economic concerns

Posted on 15 September 2016 by VRS  |  Email |Print

China tops Stephen Poloz’s list of global concerns that could put a dent in Canada’s economic recovery. The world’s biggest resource importer is wrestling with widening economic imbalances and stresses in its financial system that could stall Chinese growth. Any interruption in Chinese expansion lasting a year or two would drive oil and other commodity prices even lower, the Bank of Canada Governor said.
Poloz also took on critics who carp about the failure of central bank moves to stimulate growth in the wake of the financial collapse and global recession of 2008-09………………………………………..Full Article: Source

Investing in commodities: Of mice and markets

Posted on 09 September 2016 by VRS  |  Email |Print

A surge in speculation is making commodity markets more volatile. A game of cat and mouse appears to be taking place in the oil market. The felines are big producers who want prices to go higher, the rodents speculators betting that they will fall.
Twice this year, in the first quarter and the third, hedge funds and others have taken out record short positions on futures of West Texas Intermediate (WTI), an American crude-oil benchmark, only to be mauled by (so far empty) talk among members of the OPEC oil cartel and Russia of a production freeze. The resulting scramble by funds to unwind their short positions has fanned a rally in spot oil prices………………………………………..Full Article: Source

ABN Amro rethinks gold prices after tepid summer

Posted on 09 September 2016 by VRS  |  Email |Print

Gold has risen just 0.8% in 2016’s third quarter so far. That’s a far cry from the 30% rise seen in the year’s first half- the metal’s strongest first half since the 1980s. As a result, ANB Amro’s metal strategy team has had a little rethink.
Third-quarter performance has been “disappointing,” its coordinator Georgette Boele wrote. “We had expected a stronger rally for several reasons,” she went on. Like many other market watchers the Dutch bank had expected more immediate fallout from June’s Brexit vote………………………………………..Full Article: Source

Air pollution deaths cost global economy $5tn annually

Posted on 09 September 2016 by VRS  |  Email |Print

Premature deaths due to air pollution are costing the global economy $5.1tn annually, or roughly twice the economic output of the UK, with more than half of that burden falling on China and other developing economies in Asia, according to a study.
The estimates released on Thursday by the World Bank for the first time put a “welfare cost” on the toll from both indoor and outdoor air pollution and highlight how it has soared over the past quarter of a century, as developing economies such as China have rapidly industrialised and become more urban………………………………………..Full Article: Source

Global economy needs a reboot now

Posted on 07 September 2016 by VRS  |  Email |Print

The G20 summit took place in China with rising populist sentiment discouraging leaders from making difficult commitments, and a stumbling push for a Syria ceasefire and Asia’s territorial disputes intruding on the agenda.
“We have agreed… to support the multilateral trade system and oppose protectionism,” said China’s President Xi Jinping after hosting the gathering in the scenic eastern city of Hangzhou………………………………………..Full Article: Source

Global growth: Still made in China

Posted on 01 September 2016 by VRS  |  Email |Print

China is perfectly capable of addressing all sets of challenges simultaneously. Despite all the hand-wringing over the much vaunted China slowdown, the Chinese economy remains the single largest contributor to world gross domestic product growth.
For a global economy limping along at stall speed - and most likely unable to withstand a significant shock without toppling into renewed recession - that contribution is all the more important………………………………………..Full Article: Source

Commodities struggle and oil declined - ANZ

Posted on 31 August 2016 by VRS  |  Email |Print

Analysts at ANZ explained that commodities struggled as a stronger USD and weak fundamentals saw investor appetite wane. Oil declined as doubts emerged that producers will agree to a production freeze.
“The UAE oil minister hinted that the oil market should achieve stability soon. According to reports on Bloomberg, Iran also reiterated it wouldn’t participate in a freeze in output until it regained its share of OPEC production seen three years ago. The physical iron ore market remained quiet, with prices relatively unchanged……………………………………….Full Article: Source

Oil executives say crude market volatility is here to stay

Posted on 31 August 2016 by VRS  |  Email |Print

Crude markets will continue to be plagued by volatility in the short and medium term after suffering the biggest downturn in a generation over the past two years, according to oil-company executives gathering for one of the industry’s biggest conferences in Norway.
Oil declined on Monday amid doubts producers will agree on a deal to stabilise the market when suppliers meet next month for informal talks. Iran’s plan to continue boosting crude output until it regains its pre-sanctions Opec market share is dimming prospects of collective action, according to Patrick Allman-Ward, the chief executive of Sharjah’s Dana Gas, at the ONS conference in Stavangar, Norway……………………………………….Full Article: Source

Southeast Asia to lead charge in commodities as China’s economy slows

Posted on 30 August 2016 by VRS  |  Email |Print

China may be slowing, but a commodities rebound is under way and the world’s biggest miner knows where the next growth story is building - emerging economies in Southeast Asia.
Combined gross domestic product in the ASEAN-5 nations - Indonesia, Thailand, Malaysia, the Philippines and Vietnam - will rise about a third to US$3 trillion in the five years to 2020, fueling commodities-intensive infrastructure projects. Momentum like this across Asia will help maintain and increase commodity demand, BHP Billiton Ltd.’s Chief Executive Officer Andrew Mackenzie said this week………………………………………..Full Article: Source

Gold ‘should be $US1,700 an ounce’: Deutsche Bank

Posted on 30 August 2016 by VRS  |  Email |Print

Gold has seen a sell-off in recent days, heading for the longest run of declines since May, trading at $US1319 an ounce. Federal Reserve chairwoman Janet Yellen’s speech at Jackson Hole over the weekend contributed to gold’s latest decline.
Yellen said the case for a US rate increase has strengthened, without specifying whether we would see one in September or ­December. The odds of a September rate rise have risen to 42 per cent, from 22 per cent a week ago, and the odds of a December rate hike soared to 65 per cent, according to Bloomberg………………………………………..Full Article: Source

1 Fact and 2 Forecasts for the Global Economy

Posted on 30 August 2016 by VRS  |  Email |Print

Global economic growth is slowing. The world economy continues to expand, but at a smaller growth rate than in recent years. The outlook isn’t much better. In fact, the IMF keeps revising its forecast downwards, as do the forecasters tracked by FocusEconomics.
It turns out that the expected growth isn’t much off than the historical average. Advanced economies are will not accelerate from current tepid growth, but emerging economies will gradually improve………………………………………..Full Article: Source

Why you should pay attention to liquidity

Posted on 29 August 2016 by VRS  |  Email |Print

If you are like most individuals, you would prefer investments that are highly liquid. The only exception, of course, is your real estate investment. Then, how concerned should you be about investment liquidity? Liquidity refers to your ability to easily sell your investments at the last traded price. The importance of investment liquidity can be best understood in the context of a core satellite portfolio.
In this framework, your core portfolio is geared towards achieving your life goals such as your retirement expenses and funding your child’s college education. Your satellite portfolio is created to take advantage of short-term fluctuations in the financial markets………………………………………..Full Article: Source

Global Economy Unruffled by Brexit but Threats Loom

Posted on 26 August 2016 by VRS  |  Email |Print

Safe havens such as gold and the yen have given up most of their post-Brexit gains, while equity markets have rallied - but are there other threats around the corner? Sentiment in financial markets has soured since April, especially after the Brexit referendum. Most analysts have revised down their growth expectations for 2016 and 2017 and cut their inflation forecasts.
Monetary policy, accordingly, is now expected to remain accommodative for longer than previously thought. The odds of a recession in the medium term are now higher, in the eyes of the market, although most analysts do not expect one this year. The experience, however, from previous episodes of volatility post-2008 suggests that the pessimism might be overdone………………………………………..Full Article: Source

World economy still sputtering, trade figures show

Posted on 25 August 2016 by VRS  |  Email |Print

The amount of goods traded globally fell sharply in the second quarter after a flat performance in the first few months of 2016, highlighting a major challenge for leaders around the world grappling with soft growth.
The volume of merchandise traded globally dropped by 0.8% from April to June following no change in the first quarter, according to the CPB World Trade Monitor produced by the Netherlands. Weaker trade patterns reflect fresh economic struggles in various countries and less demand among consumers, the main drivers of growth………………………………………..Full Article: Source

Commodities down in July

Posted on 24 August 2016 by VRS  |  Email |Print

Scotiabank’s Commodity Price Index posted its first monthly loss in July since February. The index was down 1% from June as metals strength (+4.6% month over month) was overwhelmed by weakness in the Oil & Gas (-4.7%) and Agriculture (-5.2%) segments.
Virtually all base and precious metals saw gains last month. Nickel prices gained 15% over June thanks to nickel ore supply concerns in the Philippines, while zinc prices gained 9% due to supply constraints. Copper rose 5%, “but the outlook remains lackluster given the absence of any sustained supply response and weaker global demand prospects,” says a Scotiabank report on the commodity index………………………………………..Full Article: Source

Global economic outlook “stable, but not secure”: PIMCO

Posted on 23 August 2016 by VRS  |  Email |Print

The future over the next three to five years, as seen through the lens of PIMCO’s Secular Outlook, is stable but not secure. “[W]hile we do not see a global economy heading toward recession, we also do not see readily available means to stimulate aggregate demand and drive accelerated growth,” the piece reads.
Citing the most immediate and prevalent dynamic – diminishing returns from central banks’ monetary policy and probable inadequacy of fiscal policy to fill the gaps – the outlook predicts volatility that will leave investors vulnerable to both negative and positive shocks………………………………………..Full Article: Source

Bullish chart patterns across many commodity-related equities have triggered a move by active traders

Posted on 19 August 2016 by VRS  |  Email |Print

According to Investopedia, the technical data available on commodities and mining companies is prompting traders to dive into mining commodity markets. “Bullish chart patterns across many commodity-related equities have triggered a move by active traders toward increasing exposure to physical assets and the companies that explore, develop and produce mineral properties,” wrote trade-focused journalist Casey Murphy this week.
Murphy singled out Newmont Mining, BHP Billiton and Rio Tinto as top picks based on charting data. “The [Newmont share] price has found support near a major trendline on each attempted pullback so far in 2016,” the report stated………………………………………..Full Article: Source

The Global Economy has a Darker Side

Posted on 19 August 2016 by VRS  |  Email |Print

A Paris prosecutor recently called for the former CEO and six senior managers of telecoms provider, France Télécom, to face criminal charges for workplace harassment. The recommendation followed a lengthy inquiry into the suicides of a number of employees at the company between 2005 and 2009.
The prosecutor accused management of deliberately “destabilising” employees and creating a “stressful professional climate” through a company-wide strategy of “harcèlement moral” – psychological bullying………………………………………..Full Article: Source

Crude prices may stay near $50/bbl on supply worries: JP Morgan

Posted on 18 August 2016 by VRS  |  Email |Print

Ian Hui of JP Morgan Asset Management says there is talk of the Organization of the Petroleum Exporting Countries (OPEC) considering a production freeze which might weigh down crude supply numbers. Expectations of changes in supply are more likely to be driving crude prices higher right now feels Ian Hui of JP Morgan Asset Management.
Hui says there is talk of the Organization of the Petroleum Exporting Countries (OPEC) considering a production freeze which might improve oil balances and weigh down supply numbers. Hui expects crude prices to float around the USD 50 per barrel mark by the end of the calendar year. ……………………………………….Full Article: Source

When will China economy bottom out?

Posted on 18 August 2016 by VRS  |  Email |Print

China’s economic growth has started to slow down markedly since 2012. And the long-awaited bottoming sign has proved illusive over the past few years. According to a new forecast made in a China Daily article, the growth slowdown could come to an end in one or two years. But it remains to be seen if the prediction proves correct.
It’s widely believed that China’s slowdown since 2012 is mainly a result of the aftershock of the 2008 global financial crisis and the backfiring of the nation’s policy response. Beijing promptly rolled out a 4-trillion-yuan stimulus package back then to counter the crisis. The scheme appeared to work as GDP growth reached 9.6 percent, 9.1 percent, 10.4 percent and 9.3 percent respectively between 2008 and 2011………………………………………..Full Article: Source

Goldman Sachs: Look at exports and commodities

Posted on 17 August 2016 by VRS  |  Email |Print

Those looking for proof of China’s economic rebalancing act should stay clear of macro data and focus instead on micro evidence, according to Goldman Sachs. The investment bank released a research note Tuesday, detailing how changes in the composition of exports and commodity consumption are the most useful metrics to evaluate how Beijing is moving toward a consumption-led model, the so-called new economy.
“While the exports share of gross domestic product (GDP) in China today is similar to the level seen in the mid-1990s, the types of goods exported by China have changed significantly” Goldman explained………………………………………..Full Article: Source

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