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Commodities Briefing - Category | Trading more

Commodities trading jumped 23pct last year even as banks retreat

Posted on 11 March 2014 by VRS  |  Email |Print

Commodities derivatives trading jumped 23 percent last year, led by the U.S. and China, even as the biggest banks pulled back amid slumping revenues.
The increase in commodities trading, which accounted for 18 percent of volumes across all products, outpaced gains in interest rate and currency derivatives, the World Federation of Exchanges said in an e-mailed report today. Equity volumes fell 5.3 percent, it said………………………………………..Full Article: Source

Get all of your commodities in one basket

Posted on 11 March 2014 by VRS  |  Email |Print

Coffee is up 80 percent this year. Lean hogs are up 28 percent. Corn is up 13 percent. Gold is up 12 percent. Most of these same commodities were down last year, and any of them could fall at the drop of a hat. So how do rational investors participate in the upside for unpredictable commodities without losing their all-cotton shirts?
One approach is to invest in a diversified basket of commodities. That lowers the chance of a big loss and adds diversification to an investment portfolio, since commodities tend not to track the stock market. While there are 149 commodity ETFs, only a handful are broadly diversified. ……………………………………….Full Article: Source

China exports plunge, commodities worry

Posted on 11 March 2014 by VRS  |  Email |Print

Chinese exports plunged tanked by a shocking 18.1% leading to a 23 billion dollar trade deficit. The markets are trying to adjust to a shaky new Lunar New Year. Oh, sure, some blame the holiday but after getting one China company default it is possible that China is headed towards a very hard landing.
The reason why this is so shocking is just one month ago China trade expanded by 10.6%. We saw copper imports were soaring. Still China Copper Imports were up January through February was up 41.2% but in February fell 29%………………………………………..Full Article: Source

Commodities trade in Ukraine goes on

Posted on 10 March 2014 by VRS  |  Email |Print

Steel, grain and other commodity export deals are yet to be significantly affected by the growing crises in Ukraine which escalated on 6 March with a US restriction on visas for Russians and Ukrainians threatening Ukrainian sovereignty and the imposition of sanctions by the EU on 18 Ukrainians including ousted president Viktor Yanukovich, the former Prosecutor General, the Head of Security Service, Minister of Justice and some of their relatives or associates.
The presence of Russian troops in Crimea and in particular of Russian ships in the port of Sevastopol are a concern, particularly as Russia is now claiming sovereignty over Crimea and by extension, of all its ports………………………………………..Full Article: Source

OPEC to cut exports as Asian demand slows, Oil Movements says

Posted on 07 March 2014 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries will reduce crude exports this month as refiners in Asia prepare for seasonal maintenance, according to tanker-tracker Oil Movements.
OPEC, responsible for 40 percent of global oil supplies, will decrease shipments by 400,000 barrels a day, or 1.6 percent, to 24.2 million barrels in the four weeks to March 22, Oil Movements said in an e-mailed note. The figures exclude two of OPEC’s 12 members, Angola and Ecuador. Exports had climbed from January through early March on winter demand in the northern hemisphere and stockpile-building in China, according to the consultant………………………………………..Full Article: Source

FCA warns that Euro laws may curtail commodities

Posted on 07 March 2014 by VRS  |  Email |Print

Four incoming pieces of legislation from Brussels will increase regulation on investing in commodities and securities, replicating the movement of commodity prices, the FCA has warned.
In an eight-page document, Regulating the Commodity Markets: a Guide to the Role of the FCA, the City watchdog claimed that the European Markets Infrastructure Regulation (EMIR), MiFID II, the Market Abuse Regulation (MAR) and new benchmarks from the European Commission could create a stricter environment for trading and investing in commodities………………………………………..Full Article: Source

After buying up the world’s commodities, China gears up to trade more of them

Posted on 06 March 2014 by VRS  |  Email |Print

The Hong Kong Exchange is moving into commodity trading this year to cater to the changing needs of “China Inc.,” the bourse’s exuberant chief executive Charles Li told analysts and reporters in Hong Kong on March 4. “China’s commodity business needs to internationalize and we’ll be here,” he said, with “new products, new members and new partners,” including potential tie-ups with the mainland’s fast-growing commodity trading platforms.
His announcement is the latest sign that after investing heavily around the world to buy and mine the world’s raw materials, China’s next step is to plan an even bigger role in trading them………………………………………..Full Article: Source

Iraq returns as world’s fastest-growing oil exporter

Posted on 06 March 2014 by VRS  |  Email |Print

Iraq is reclaiming its rank as the world’s fastest-growing oil exporter, cushioning consumers from Libyan supply outages for now and, perhaps, reviving OPEC market share rivalries down the road.
Despite worsening violence due to spillover from the war in Syria, Iraq - already OPEC’s second-largest producer - is likely to post one of the biggest annual output jumps in its history as BP, Exxon Mobil and other companies tap its southern fields, which are untouched by the unrest………………………………………..Full Article: Source

Grain boom busts Canada farmers as rail lags: Commodities

Posted on 05 March 2014 by VRS  |  Email |Print

Canada’s grain-supply boom is turning into a bust for farmers as record harvests and railroad logjams make sales almost impossible.
Consider Dennis Gallant, 76. He has yet to collect one cent on the wheat, canola, barley and oats harvested last year on the 1,000-acre farm in Warren, Manitoba, he has run since 1960. He has called the local grain elevator every 10 days since October. The answer since is always the same. No thanks. We’re full………………………………………..Full Article: Source

Crude oil drops after big jump over Ukraine crisis

Posted on 05 March 2014 by VRS  |  Email |Print

The price of crude oil dropped sharply Tuesday after a big jump the day before over concern that Russia’s military advance into Ukraine could result in economic sanctions against one of the world’s major energy suppliers.
By early afternoon in Europe, benchmark U.S. crude for April delivery was down $1.58 to $103.34 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, the contract added $2.33 to close at $104.92………………………………………..Full Article: Source

HKEx to add yuan futures in night trading session

Posted on 05 March 2014 by VRS  |  Email |Print

HKEx looks to extend trading hours for the products from April to allow for hedging by investors in the wake of recent volatility in the currency. Hong Kong Exchanges and Clearing will add yuan currency futures in an after-hours evening session from April 7 in its latest effort to promote yuan products.
“The yuan has become very volatile recently while its trading pattern last week showed the currency did not always go up. This would be the right time for HKEx to extend the trading hours for yuan futures to allow investors to do some hedging,” Charles Li Xiaojia, chief executive of the bourse, said as he unveiled HKEx’s strategy at its annual media briefing……………………………………….Full Article: Source

Keeping the faith in commodity trading

Posted on 28 February 2014 by VRS  |  Email |Print

The commodities trading landscape is changing. Faced with rising costs, increased regulation and directionless markets, big banks such as Deutsche Bank are retrenching or retreating from the sector. It is a trend that looks set to continue.
“Sentiment-driven and largely directionless markets, alongside declining client interest, has seen total revenues for the leading 10commodities investment bank businesses across the globe fall to just below a third of their peak, from $14.1bn in 2008 to $4.5bn in 2013, with no foreseeable prospect of recovery,” the UK’s financial watchdog, the Financial Conduct Authority, said……………………………………….Full Article: Source

Commodities forecast suffers

Posted on 27 February 2014 by VRS  |  Email |Print

As rising supplies and slowing demand compound dips that led to last year’s bear market in gold, copper and corn, Bloomberg reports that banks expect commodities to head that way again in 2014.
The super cycle that led commodities to almost quadruple since 2001 is reversing, with prices set to drop 3% in 12 months, reports Goldman Sachs Group Inc………………………………………..Full Article: Source

U.K. FCA: Commodities houses pose oversight challenges

Posted on 27 February 2014 by VRS  |  Email |Print

Commodities-trading houses are posing a challenge to market oversight, the U.K.’s Financial Conduct Authority warned Thursday. As tighter regulatory requirements have reduced banks’ activities in the sector, their places have been taken by specialist companies, many of which are closely held and have substantial operations outside direct oversight of market regulators.
The best known, such as Cargill, Vitol Group SA and Trafigura Beheer B.V., churn through hundreds of billions of dollars of sales every year through global operations that span from London to Singapore and control the movement of huge volumes of essential goods—ranging from grains, cocoa and coffee beans to industrial metals and oil………………………………………..Full Article: Source

Barclays pulls down shutters on European, U.S. power trading desks

Posted on 26 February 2014 by VRS  |  Email |Print

Britain’s Barclays Plc said on Tuesday it has closed its power trading desks in London and New York, joining a string of global investment banks that are paring down their commodity market activities as increased regulations bite.
Barclays, a top-five banking player in commodities trading which is in the process of shrinking its investment banking activities, said its “core commodities franchise continues to operate business as usual”………………………………………..Full Article: Source

Who is #1 consumer of gold? Does smuggling count?

Posted on 24 February 2014 by VRS  |  Email |Print

The recently released Gold Demand Trends Report 2013 by the World Gold Council states that China surpassed India to become the world’s top consumer of the yellow metal in 2013. However, based on official imports and smuggled gold, India’s consumption is still higher.
According to the report China tops the list with total gold imports of 1066 tons. India’s official gold imports totaled 975 tons during the year. The report also states that nearly 200 tons of gold were smuggled to India during the year. Adding the official and smuggled gold, the total gold consumed by the country would be 1075, which is higher than the gold imports by China………………………………………..Full Article: Source

US to be world’s biggest oil supplier by 2016

Posted on 21 February 2014 by VRS  |  Email |Print

As the US economy continues to grow, experts say it will rely less on the world’s major oil exporters in Africa and the Middle East, regions largely sustained by U.S. imports.
According to the International Energy Agency, the economy will grow by 2.8 percent in 2014, higher than the 2.6 percent it previously forecasted. The International Monetary Fund predicts the global economy will grow in the same direction by 3.7 percent………………………………………..Full Article: Source

Supply shortage in India for yellow metal

Posted on 21 February 2014 by VRS  |  Email |Print

The delay in clearing the gold procurement requests by the Directorate General of Foreign Trade (DGFT) has led to supply crunch in India. As per reports, nominated agencies too were seen delaying supply to bulk consumers thus heightening the fall in gold supply to jewellery exporters.
The Reserve Bank of India (RBI) had come up with 80:20 rule in August last year which linked exports to gold imports, making it mandatory for gold importers to supply at least 20% of their imports to exporters………………………………………..Full Article: Source

Switzerland sent 80pct of bullion exports to Asia in January

Posted on 21 February 2014 by VRS  |  Email |Print

Switzerland sent more than 80 percent of its gold and silver bullion and coin exports to Asia last month, the Swiss Federal Customs Administration said. It imported most from the U.K.
Hong Kong was the top destination at 44 percent on a value basis, with India at 14 percent, the Bern-based customs agency said in its first breakdown of the gold trade data since 1980. Singapore accounted for 8.6 percent of exports, the United Arab Emirates 7.9 percent and China 6.3 percent………………………………………..Full Article: Source

NZ: Commodity export boom forecast

Posted on 20 February 2014 by VRS  |  Email |Print

Strong demand for New Zealand’s main commodity exports - particularly from China - has prompted the Ministry for Primary Industry to revise up its revenue forecast for the sector by $4.9 billion to $36.5 billion for 2013/14.
The ministry, in an update of last year’s Situation Outlook for Primary Industries, said the net effect of higher demand for dairy was a $2.7 billion increase in forecast dairy revenues over last year’s forecast for the 2013/14 year to June………………………………………..Full Article: Source

Oil boss urges overhaul of Brent oil price benchmark

Posted on 20 February 2014 by VRS  |  Email |Print

The head of the world’s largest oil trading firm has called for an overhaul of the Brent Crude benchmark oil price. Ian Taylor, the chief executive of Vitol, says Brent is no longer efficient as a price and should include other global oil grades.
A leading oil analyst at Citigroup, Seth Kleinman, has also called Brent a “broken” benchmark. Platts, the price reporting agency, says change may be necessary, but not yet………………………………………..Full Article: Source

Could you be a commodity trading advisor or commodity pool operator and not know it?

Posted on 20 February 2014 by VRS  |  Email |Print

As the Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight recently reminded market participants in a Staff Advisory, entities that meet the definition of a commodity trading advisor (CTA) are subject to various regulatory requirements and may be required to register as a CTA with the National Futures Association (NFA).
The Staff Advisory is an indication that the CFTC is turning to compliance with its regulatory and registration requirements now that the rulemaking process of the Dodd-Frank Act is finishing………………………………………..Full Article: Source

Major banks’ commodities revenue slid 18 pct in 2013

Posted on 19 February 2014 by VRS  |  Email |Print

Commodities revenue at the top 10 investment banks dropped 18 percent in 2013 in a third year of declines due to weak investor interest and low volatility, a consultancy said on Tuesday.
Revenue from commodities for top banks fell to $4.5 billion last year from $5.5 billion the previous year, London-based financial industry analytics firm Coalition said in a report. Many banks have slashed their commodities businesses and others have completely shut down commodities units, which also have been hit by tougher regulation and higher capital requirements after the global financial crisis………………………………………..Full Article: Source

Oversupply forces aluminium industry cuts

Posted on 19 February 2014 by VRS  |  Email |Print

Two of the world’s three biggest aluminium producers have announced cuts to production in the latest sign of how weak prices and oversupply are weighing on the industry.
US company Alcoa said on Monday it was shutting its 190,000 tonne-a-year Point Henry smelter in Australia since the plant had “no prospect of becoming financially viable”. Two rolling mills there will also be permanently closed. Alcoa’s total closures or curtailments to production now represent 551,000 tonnes of capacity, or about 1 per cent of world supply of the metal………………………………………..Full Article: Source

China’s record copper, iron ore imports are not being put to work

Posted on 19 February 2014 by VRS  |  Email |Print

The copper price’s February comeback accelerated on Tuesday, bringing gains so far this month to more than 4%. In New York trade spot copper jumped 2c to $3.34 a pound, up from $3.20 hit at the end of January over fears of a marked slowdown in the economy of number one consumer China.
For 2014 economists are predicting 7.4% which would make it the slowest nominal growth since 1990. Given its widespread use in transportation, manufacturing and construction the copper price is sensitive to any economic slowdown………………………………………..Full Article: Source

Sorting reality from hype in the rare Earth industry: Ryan Castilloux

Posted on 19 February 2014 by VRS  |  Email |Print

China has two competing REE industries: legal and illegal. This results in an abundance of REE suppliers. End-users are aware of this and exploit it by shopping around. They use the last guy’s offer to negotiate a lower price with the next supplier, and ultimately, the spread between prices widens, and prices trickle downward.
China’s consolidation plans aim to remedy this situation. The Baotou Rare Earth Products Exchange shares this goal. In the long term and in the context of the recent World Trade Organization (WTO) ruling against China’s REE restrictions and tariffs, consolidation is a power play. It aims to drive down production costs, so that China can undercut emerging suppliers, should it find its grip on the industry weakening………………………………………..Full Article: Source

Fed probes catastrophic risks in bank physical commodity trading

Posted on 19 February 2014 by VRS  |  Email |Print

The US Federal Reserve has moved to tighten the rules on physical commodity trading by banks, citing fears they might suffer huge losses as a result of an environmental disaster. How valid are such concerns and what steps is the Fed likely to take?
During the past year, US banks have been embroiled in a public relations nightmare over physical commodity trading. Costly settlements for alleged power market manipulation, accusations of nefarious dealings at aluminium warehouses, and hostile hearings on Capitol Hill have created an environment in which the presence of Wall Street banks in physical markets looks increasingly precarious………………………………………..Full Article: Source

Iranian oil exports increase after nuclear deal

Posted on 18 February 2014 by VRS  |  Email |Print

Shaking off some of the restrictions of international sanctions, Iran managed to boost its oil exports by 100,000 barrels per day in January. According to the IEA, Iran was able to export 1.32 million barrels per day last month, with the increased flow going to China, Japan, and India.
To be sure, Iran used to export 2.5 million barrels per day before sanctions were implemented in 2012, but the interim nuclear deal with the United States and its western allies has breathed some life into Iran’s oil sector. It removes the requirement of buyers of Iranian crude to further reduce purchases in order to avoid penalties. The value of Iran’s exports at current prices is worth about $4 billion per month………………………………………..Full Article: Source

China’s Commodity tapering and what it means for Brazil and South Africa

Posted on 14 February 2014 by VRS  |  Email |Print

When the Quantitative Easing began with the advent of the financial crisis of 2008, little did someone think that it would have in store yet another round of financial issues. Yes, coupled with easing which saw a deluge of Dollars hitting the markets, the banks in US and Europe brought down the interest rates to the position that it was in effect made to be practically irrelevant. The term, ‘near-zero interest rates’ represented the situation with absolute authenticity.
But after six years of a roller coaster ride, US began to see the return of growth. Easing was tapered and it currently stands at a monthly purchasing of $65 billion in bonds and mortgage backed securities by Fed………………………………………..Full Article: Source

China commodities imports hit record highs, though outlook uncertain

Posted on 13 February 2014 by VRS  |  Email |Print

China’s imports of crude oil, iron ore and copper hit record highs in January, though some of the unexpected strength was put down to stockpiling ahead of the Lunar New Year holidays rather than underlying strength in consumption.
At the same time, data showed the value of China’s overall imports and exports climbed around 10 percent last month from a year ago and handily beat expectations, raising optimism over the health of the world’s second-largest economy after recent weak data………………………………………..Full Article: Source

Commodities traders take aim at rule to limit speculation

Posted on 10 February 2014 by VRS  |  Email |Print

Some of the world’s biggest commodities traders will take a strong line against a new plan to limit market speculation, arguing it would derail the everyday business of buying and delivering shipments of grain, oil and metals.
A lobby group representing companies including Archer Daniels Midland, BP, Cargill and Louis Dreyfus Commodities intends to file a sweeping critique of the “position limits” rule proposed by the US Commodity Futures Trading Commission in formal comments due on Monday, according to a draft letter seen by the Financial Times…………………………….Full Article: Source

Commodities make a strong beginning in Feb, Gold waits for trigger

Posted on 10 February 2014 by VRS  |  Email |Print

Commodities witnessed a strong beginning in February with the agri-commodities and metals providing optimism while gold stock markets stabilised after a weak beginning, according to Ole S Hansen, Head of Commodity Strategy at Saxo Bank.
Copper received its first weekly gain on recovery trends in US economy while Shanghai copper rose ater markets returned after a week long Lunar New Year holiday. London Metal Exchange ware houses witnessed shrinking of inventory - with copper falling to 308,000 tons, the lowest in 13 months and less than half of he June 2013 peak of 678,000 tons…………………………….Full Article: Source

Metal trade wars could cost a pretty nickel

Posted on 07 February 2014 by VRS  |  Email |Print

Nickel gained in London for the first time in four sessions on signs that demand for the metal used to make stainless steel will accelerate just as supply tightens on an ore-export ban from top producer Indonesia.
Crude stainless-steel output will rise to a record 39 million metric tons this year on Chinese production, industry consultant MEPS (International) Ltd. said yesterday. U.S. jobless claims fell as companies retained workers to meet demand. Indonesia will be consistent in applying the export limits, the government said………………………………………..Full Article: Source

Guess who is the new OPEC?

Posted on 06 February 2014 by VRS  |  Email |Print

Oil traders got a bit of excitement after a report by Reuters that the United States is starting to approve limited crude oil exports. Yet later it became more clear that they were talking about re-exporting foreign oil but none the less this could be the beginning of the movement to start the long road to approving U.S. oil exports.
Reuters reported that, “The U.S. government has authorized limited crude oil exports to Europe, for the first time in years, raising new questions about how companies are testing the limits of a controversial, decades-old exports ban………………………………………..Full Article: Source

Gold’s safe-haven allure reborn

Posted on 04 February 2014 by VRS  |  Email |Print

Commodity traders are moving back into safe-haven gold exchange traded funds and away from industrial metals on concerns of slowing economic growth in the emerging markets and amid the global sell-off in equities.
The SPDR Gold Shares, iShares Gold Trust and the ETFS Physical Swiss Gold Shares have all gained a little over 3% year-to-date. In comparison, the MSCI Emerging Markets Index is down 6.6% so far this year while the S&P 500 is down 3.5%………………………………………..Full Article: Source

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Commodities drift lower on divergent views on global recovery: Saxo Bank

Posted on 03 February 2014 by VRS  |  Email |Print

Commodities drifted lower on divergent outlook between emerging and developed economies that raised uncertainty about the demand for commodities, according to Ole S Hansen, Head of Commodity Strategy at Saxo Bank. Industrial metals were weakened on China slowdown fears and lacklustre trading activity ahead of Lunar New Year shut down in Asian markets.
Precious metals failed to find support from the emerging-market turmoil and as result went looking for support. The energy sector was mostly driven by the near-term outlook for US weather which created some extreme volatility in natural gas and supported heating oil………………………………………..Full Article: Source

Banks look to exit commodities

Posted on 31 January 2014 by VRS  |  Email |Print

JPMorgan is rumored to be selling its commodity business. The deal could be worth around $2 billion for the bank. Commodities have been profitable for banks in the past. But now several banks are changing course.
To understand what’s changing, let’s start with how this business actually works. Banks do more than trade commodities. Their holding companies will actually take possession the physical commodities, like aluminum or oil………………………………………..Full Article: Source

Where to next for Singapore’s hard commodity traders?

Posted on 31 January 2014 by VRS  |  Email |Print

Regional banks, Asian commodity firms and derivatives operations are mopping up newly unemployed physical commodities traders who have been left without jobs after the big international banks starting exiting the business segment.
Trading hard commodities used to be big business for the bulge bracket banks, but with several leaving the arena – Bank of America Merrill Lynch being the latest to join the rush for the exits – a number of front office roles have been made redundant in the respective Singapore units………………………………………..Full Article: Source

OPEC says can handle extra oil from Iran, Libya, Iraq

Posted on 28 January 2014 by VRS  |  Email |Print

OPEC will be able to handle the extra oil expected to come from Iran, Iraq and Libya, OPEC’s secretary general said on Monday, insisting the group would collectively head off any oversupply.
Top OPEC supplier Saudi Arabia along with core Gulf producers the United Arab Emirates and Kuwait have increased supplies to fill the gap left from outages in Libya and Iraq and Western sanctions on Iran………………………………………..Full Article: Source

OPEC cuts exports amid fall in winter demand, Oil Movements says

Posted on 24 January 2014 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries will cut crude shipments through early February as easing growth in Asia adds to a seasonal slowdown in demand, according to Oil Movements.
OPEC, supplier of about 40 percent of the world’s oil, will reduce sailings by 210,000 barrels a day, or 0.9 percent, to 23.66 million barrels in the four weeks to Feb. 8, the researcher said today in a report. That compares with 23.87 million in the period to Jan. 11. The figures exclude two of OPEC’s 12 members, Angola and Ecuador………………………………………..Full Article: Source

Asian players develop an appetite for risky commodities trading

Posted on 22 January 2014 by VRS  |  Email |Print

While Western financial giants have been exiting the high-risk, high-reward commodities trading business, capital-rich Asian firms, including state-owned banks and brokerages from China, have seized the opportunity to enter the market.
Western banks including JPMorgan Chase, the world’s largest by assets, and France’s Natixis have been retreating from the commodities business but have found no shortage of Asian players willing to take their place at the table……………………………..Full Article: Source

US oil demand growth outstrips China in 2013, says IEA

Posted on 22 January 2014 by VRS  |  Email |Print

US demand for oil grew by more than China’s last year for the first time since 1999, according to the International Energy Agency, giving the strongest indication of how abundant energy supplies are driving an economic resurgence in the US.
The IEA – the developed world’s energy body whose forecasts are the gold standard for the energy market – said US oil demand rose by 390,000 barrels a day last year, or 2 per cent, reversing years of steady decline. Chinese demand rose by 295,000 b/d, the weakest in at least six years……………………………..Full Article: Source

Commodities likely to have another muted year

Posted on 21 January 2014 by VRS  |  Email |Print

The global economic recovery might be gaining steam, but Capital Economics is forecasting commodity prices are likely to remain flat in 2014. Commodity prices have struggled to post gains for the past three years, notes Julian Jessop, chief global economist at Capital Economic.
That has led some analysts to predict prices will rebound this year, but he is skeptical. “There is no fundamental reason why the underperformance of commodities relative to equities cannot be sustained for another year, given the prospects for supply,” he said………………………………………..Full Article: Source

How to use arbitrage opportunities in commodities

Posted on 21 January 2014 by VRS  |  Email |Print

Financial markets offer a host of trading options for investors with different risk profiles. While one can opt for various market strategies, such as trading, arbitrage and long-term investing, an interesting, low-risk option is arbitrage.
It’s an opportunity which can help an investor benefit from the difference in the prices of an asset on various platforms. Arbitrage helps reduce the price disparity of an asset in different markets even as it helps boost the liquidity………………………………………..Full Article: Source

OPEC cuts exports to lowest in two months, Oil Movements says

Posted on 17 January 2014 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries will cut crude shipments to the lowest level since late November as demand from Asia remains weak, according to Oil Movements.
OPEC, supplier of about 40 percent of the world’s oil, will reduce sailings by 660,000 barrels a day, or 2.7 percent, to 23.49 million barrels in the four weeks to Feb. 1, the researcher said today in a report. That compares with 24.15 million in the period to Jan. 4. The figures exclude two of OPEC’s 12 members, Angola and Ecuador………………………………………..Full Article: Source

Goldman’s commodity trade ‘too important’ to quit: CFO

Posted on 17 January 2014 by VRS  |  Email |Print

Goldman Sachs Group Inc (GS.N) reaffirmed its intent to remain in the commodities trading business, deeming it “too important” to clients to exit, a top executive said on Thursday.
The bank’s restated determination to retain its vaunted J. Aron trading business, even as some rivals shed physical trading operations, comes one day after lawmakers at a U.S. Senate hearing pressed the Federal Reserve to quicken efforts to crack down on what they see as risky business………………………………………..Full Article: Source

Senate democrats push Fed on banks’ commodities trading

Posted on 16 January 2014 by VRS  |  Email |Print

Senate Democrats ratcheted up their criticism of big banks’ activities in the physical commodities markets Wednesday, pressuring the Federal Reserve to act quickly in an ongoing review of the banks’ ability to trade in materials such as oil and aluminum.
Several senators pressed a senior Fed official for more decisive action in the wake of the central bank’s decision Tuesday to seek input on—rather than impose—possible limitations for banks that trade, store, and sell commodities………………………………………..Full Article: Source

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EU lawmakers agree deal on commodity trading

Posted on 16 January 2014 by VRS  |  Email |Print

EU lawmakers reached a breakthrough on new rules to crack down on commodity speculation on Tuesday night (14 January) in Strasbourg. Under the so-called Market in Financial Instruments directive (MiFiD) that will regulate financial markets across the bloc, taking financial positions in commodity derivatives will be limited, in a bid to prevent market distortions and abuse.
The new bill is also the first EU law to establish rules for mathematical algorithms used in high frequency trading………………………………………..Full Article: Source

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Commodity traders face fines for failure to complete paperwork

Posted on 16 January 2014 by VRS  |  Email |Print

The drudgery of paperwork is the highlight of few commodity traders’ days. But failure to complete the task can carry a hefty price tag. Two Brazil-based agricultural companies tied to Japan’s Mitsui & Co., Ltd., have agreed to pay $500,000 for failing to submit weekly reports showing their cotton purchases and sales, the U.S. Commodity Futures Trading Commission said in a release on Wednesday.
Multigrain SA and Agricola Xingu SA were not immediately available for comment………………………………………..Full Article: Source

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EU moves to curb food price bets by traders

Posted on 16 January 2014 by VRS  |  Email |Print

New rules would help decrease price volatility and inflation of staple foods and other commodities, says British MEP. The European Union has voted through rules to limit the ability of banks and hedge funds to bet on food prices.
Arlene McCarthy, a Labour MEP for the north-west, said the new rules, known as Mifid, would “curb speculation and help decrease price volatility and inflation” which had a “devastating impact on poor and food dependent countries”………………………………………..Full Article: Source

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