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Commodities Briefing - Archive | January, 2014

Commodity producers face second year of falling prices

Posted on 31 January 2014 by VRS  |  Email |Print

Prices of the main commodities – energy, metals, agriculture and fertilisers – are expected to decline for the second successive year in 2014, the World Bank said on Thursday.
In its quarterly commodities outlook, the bank painted a gloomy picture for commodity producers, though consumers have reason for cheer. Energy prices are expected to fall the least of all the main commodity classes, dropping 0.1 per cent this year, the same amount as in 2013………………………………………..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

Goldman sees more pain ahead for commodities

Posted on 31 January 2014 by VRS  |  Email |Print

Banks led by Goldman Sachs Group Inc. and Citigroup Inc. say commodities are heading for losses in 2014 as rising supplies and slowing demand compound slumps that led to bear markets last year in gold, copper and corn.
Open interest measuring holdings across the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index fell for three straight quarters through December, the longest slump since the global recession in 2008. The super cycle that led commodities to almost quadruple since 2001 is reversing, with prices set to drop 3 percent in 12 months, Goldman said. The asset class will be a “wallflower” compared with equities, Citigroup said………………………………………..Full Article: Source

China may not be commodity market driver in 2014

Posted on 31 January 2014 by VRS  |  Email |Print

While it’s probably going too far to say the China HSBC Purchasing Managers’ Index can be discounted, there are good reasons to be cautious about the weak January reading. The final HSBC PMI dropped to 49.5 from December’s 50.5, falling below the 50-mark that separates expansion from contraction for the first time in six months.
The soft start to the year in global industrial powerhouse has raised investor concerns that growth in China, the world’s biggest commodity consumer, may disappoint and struggle to reach 7.5 percent, which is widely expected to be announced as the official target………………………………………..Full Article: Source

Is oil price volatility to blame for lack of stable economic growth?

Posted on 31 January 2014 by VRS  |  Email |Print

A new report for Oxford University has stated that crude oil price volatility is undermining stable economic growth around the world, and that governments must do more to reduce their dependence on fossil fuels and protect themselves from increasing prices.
Sir David King, one of the co-authors of the report, a former Oxford don, and chief scientific advisor to the British government, said that a boom in production of shale oil and gas could well help to delay any high price increases and avoid violent fluctuations for the time being, but that it does not offer a long term solution to the world’s energy needs………………………………………..Full Article: Source

OPEC January crude output falls to two-year low in survey

Posted on 31 January 2014 by VRS  |  Email |Print

OPEC crude production dropped to the lowest level in more than two years in January, led by a decline in Angolan output, a Bloomberg survey showed. Output by the 12-member Organization of Petroleum Exporting Countries decreased 151,000 barrels to an average 29.888 million barrels a day from 30.039 million in December, the survey of oil companies, producers and analysts showed.
It was the least since June 2011. The December total was revised 84,000 barrels a day higher because of changes to the Saudi Arabian, Kuwaiti and Iraqi estimates………………………………………..Full Article: Source

OPEC to trim shipments as demand declines, Oil Movements says

Posted on 31 January 2014 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries will reduce shipments through to mid-February as western demand falls with the end of winter in the northern hemisphere, according to Oil Movements.
OPEC, supplier of about 40 percent of the world’s oil, will reduce sailings by 90,000 barrels a day, or 0.4 percent, to 23.72 million barrels in the four weeks to Feb. 15, the researcher said today in a report. That compares with 23.81 million in the period to Jan. 18. The figures exclude two of OPEC’s 12 members, Angola and Ecuador………………………………………..Full Article: Source

OPEC preaches stability while making unstable bets

Posted on 31 January 2014 by VRS  |  Email |Print

OPEC Secretary-General Abdullah al-Badri said the 12-member cartel could make room for an increase in oil from Iran, Iraq and Libya. All three member states could be on the verge of a revival and the OPEC boss says accommodations could be made when they return. Emerging trends, however, suggest his anticipation may be premature.
OPEC set a production target for its members of 30 million barrels of oil per day, but doesn’t have individual quotas in place. Saudi Arabia and OPEC’s top producers have been making up for shortages from Iran, Iraq and Libya, but now the secretary-general said it may be time to make accommodations………………………………………..Full Article: Source

Renewable energy: Little wonders

Posted on 31 January 2014 by VRS  |  Email |Print

In Germany local people hold stakes in about 40% of renewable generation. In Britain almost all of it is owned by big businesses. In 2010 the coalition government—then touting plans for a “big society” of active communities—promised support for groups that build their own low-carbon generators. On January 27th it tried to deliver the goods.
Community groups hope that having their own wind, solar and hydro projects will help cut carbon emissions and bring in cash for neighbourhood causes or for more green schemes. The government sees a chance to further national goals. A green-minded electorate is less likely to oppose big renewable developments and more likely to tolerate the impact of environmental policies, such as rising bills………………………………………..Full Article: Source

Coal becomes commods’ first victim of emerging-market woes

Posted on 31 January 2014 by VRS  |  Email |Print

The rout in emerging markets is starting to spill into commodities, with coal prices tumbling as much as 10 percent this month as utilities in developing economies slash orders. Commodity price developments often go hand in hand with growth in emerging economies, which consume more energy as their wealth rises.
“Commodity demand is more concentrated in fast-growing countries … The marginal buyer of commodities is very much the emerging world and it’s going through a bear market right now,” said Charlie Morris, head of absolute return at HSBC Global Asset Management, who oversees $1.8 billion in assets………………………………………..Full Article: Source

Why gold lost its lustre for investors

Posted on 31 January 2014 by VRS  |  Email |Print

A couple of years ago, so much scrap gold was coming through the door of Baird and Co that the company could barely keep up. It is the biggest producer of gold products in the UK and Baird, based in east London, uses scrap metal supplied by pawnbrokers, traders and industry.
On the commodity markets, gold prices soared 170% between late 2008 and 2011. On the High Street, “cash for gold” traders were springing up and, with a recession taking its toll on household finances, plenty of people were willing to sell jewellery………………………………………..Full Article: Source

Gold price rally fades, Credit Suisse sees $1,000 on the horizon

Posted on 31 January 2014 by VRS  |  Email |Print

The gold price on Thursday gave up hard fought gains wracked up on Wednesday after a decision by the US Federal Reserve to throttle back its economic stimulus program.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery – the most active contract – last traded at $1,243.30 an ounce, shedding $18 from yesterday’s close. The Federal Open Market Committee as widely expected announced another $10 billion a month cut to purchases under its quantitative easing program………………………………………..Full Article: Source

Goldbugs in 2013 – the big data

Posted on 31 January 2014 by VRS  |  Email |Print

2013 was a historical year for both the gold bullion market and the fight for sound money. Not only did the gold price fail to rise for the first time in twelve years but a new currency took centre stage – bitcoin. Our readers and clients were there every step of the way letting us what they thought of the major events and decisions surrounding the gold market and the debates on what money really is.
The mainstream was quick to dismiss both gold and bitcoin, however we wanted to find out how our readers, community members and clients really felt about two of the most significant events in the sound money industry to happen for some time………………………………………..Full Article: Source

Gold and silver will shine again in 2014

Posted on 31 January 2014 by VRS  |  Email |Print

The commodities supercycle of 2000-2008, which produced roughly 20% compound annual returns, was driven by scarcity of supply to meet the demands of emerging nations - notably China. Investment in the mining and extraction industries has now caught up with demand, ironically at a time when the latter is levelling out.
Western markets such as the US and UK are recovering, but they are less commodity-intensive than emerging markets, where the construction of infrastructure has been fast and furious. As a result, prices of base metals such as copper and aluminium have moved sharply lower this year since China’s growth stumbled, and only oil, which is primarily influenced by the geopolitical backdrop, has risen………………………………………..Full Article: Source

Aluminium falls to a 4½-year low

Posted on 31 January 2014 by VRS  |  Email |Print

Aluminium prices slid to a four-and-a-half year low, amid a wider sell-off in base metals triggered by a strengthening US dollar, weakness in emerging market currencies and lacklustre demand from China ahead of the Lunar New Year.
On Thursday, aluminium prices for delivery in three months on the London Metal Exchange fell as much as 1.1 per cent to $1,722 a tonne – its lowest level since July 2009………………………………………..Full Article: Source

Risk and energy risk commodity rankings 2014: Metals

Posted on 31 January 2014 by VRS  |  Email |Print

The past 12 months have seen plummeting gold prices, directionless base metals markets and a heated row over warehousing on the London Metal Exchange. Yet this has had little impact on our annual ranking of dealers and brokers, which remains largely unchanged.
Chinese demand has been vital to base metals prices in recent years, but it took on a new role in 2013, preventing sliding gold prices from collapsing entirely – dealers say the year’s one reliable trade was to be short gold in an otherwise meandering metals market………………………………………..Full Article: Source

5 ETF myths that keep investors away

Posted on 31 January 2014 by VRS  |  Email |Print

Exchange traded funds now represent 15 percent of all trading in the market, but how much of that 15 percent is coming from individual investors? ETFs have grown rapidly, thanks to institutional traders, hedge funds and even traditional mutual funds using their “rival” investments.
No-commission fee-trading programs at discount brokers, including Charles Schwab, Fidelity Investments and TD Ameritrade have made it easier for individual investors to use ETFs, too, but there are lingering misconceptions that are keeping more retail investors from migrating to ETFs………………………………………..Full Article: Source

As Nat Gas rises, no breaks for coal ETF

Posted on 31 January 2014 by VRS  |  Email |Print

No pun intended, but natural gas has been cooking with, well, gas this year. Natural gas is the best performing commodity in the S&P GSCI Commodity Index this year and the iPath Dow Jones-UBS Natural Gas Total Return Sub-Index ETN and the United States Natural Gas Fund are this year’s top two non-leveraged exchange traded funds.
Conventional wisdom used to hold that as natural gas prices, coal stocks would eventually go along for the ride because higher natural gas prices would entice electric utilities to go back to coal as a cost-saving measure. Utilities, as measured by the Utilities Select Sector SPDR, have not been stung by rising gas prices. XLU is up 2% this year………………………………………..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

Barclays Asia heads of commodities, credit sales leave

Posted on 31 January 2014 by VRS  |  Email |Print

Barclays’ head of Asia commodities and its head of credit sales in the region are among its high-profile departures in Asia after it began cutting hundreds of jobs in its investment bank, two sources familiar with the matter said.
James Groves, head of Asia commodities business and who had been with Barclays since 2002, as well as the bank’s Asia credit sales head Jim Vore have departed, the sources told Reuters on Thursday………………………………………..Full Article: Source

England must reject currency union with Scotland

Posted on 31 January 2014 by VRS  |  Email |Print

Mark Carney, governor of the Bank of England, delivered home truths in Edinburgh this week. The desire of the Scottish government to remain in the sterling area would, he stressed, sharply curtail Scotland’s fiscal and financial independence. What Mr Carney did not note was that the rest of the UK must also have a say in any union.
As the governor stated, arrangements “would be a matter for the Scottish and UK parliaments”. But, as the person responsible for monetary stability, he has a duty to advise on the implications………………………………………..Full Article: Source

Emerging market currency falls in graphs

Posted on 31 January 2014 by VRS  |  Email |Print

Emerging markets are experiencing the worst rout in five years, with their currencies plummeting against the dollar. Here we take a look at those countries most exposed to risk.
Emerging markets are experiencing the worst rout in five years and almost all emerging market currencies have depreciated further against the dollar as the US Federal Reserve winds down its massive $85bn-per-month stimulus………………………………………..Full Article: Source

EU environment panel backs faster approval of carbon fix

Posted on 31 January 2014 by VRS  |  Email |Print

The European Parliament’s environment committee agreed to accelerate the adoption of a rescue plan for the bloc’s emissions market, which the European Commission wants to start as soon as possible.
Carbon prices rose as much as 3.6 percent after the panel voted 43 to 13 to shorten the measure’s usual three-month scrutiny period in the Parliament. The recommendation now needs approval from all heads of the assembly’s other committees before it goes to a plenary, which can end the obligatory evaluation before an April deadline………………………………………..Full Article: Source

Brussels restricts policy to emission reduction and trading

Posted on 31 January 2014 by VRS  |  Email |Print

The European Commission’s 2030 climate and energy package unveiled on 22 January confines itself to two main proposals: a 40% binding greenhouse gas emission reduction target and legislative reform of the EU Emission Trading Scheme.
Significantly, it does not include post-2020 national renewable energy targets or new energy efficiency targets. It also drops the fuel quality directive which underpins the use of biofuels in the transport sector. The upshot of the proposals, if adopted by the EU Member States and the European Parliament, is that the EU’s climate policy will in future be carried out almost exclusively through the Emission Trading Scheme coupled with national emission reduction targets. The days of micromanagement from Brussels are over………………………………………..Full Article: Source

10 topics to consider in China commodities In 2014

Posted on 30 January 2014 by VRS  |  Email |Print

China has become one of the largest global consumers of commodities, and the Asian giant’s appetite for oil, gas, metals and other commodities is showing little sign of slowing down. Citi Research released a report on the China commodity sector on Monday, and lead analyst Ivan Szpakowski and colleagues laid out “10 areas to watch in China commodities.”
Szpakowski highlights that environmental concerns are in the spotlight in China today, particularly in coal and steel industries, where much stricter regulations took effect in 2013. There is still a lack of leadership from the top Chinese leaders on the issue, but mid-level officials are actively pushing for greater regulation and enforcement of current regulations………………………………………..Full Article: Source

Iran, Iraq plan to join forces to become world’s new oil superpower

Posted on 30 January 2014 by VRS  |  Email |Print

Iraq is poised to triple its crude oil output from three million barrels per day to nine million by 2020. And Iraqi ministers are helping their Iranian counterparts to attract investment in oil ahead of the possible lifting of international sanctions imposed on the country.
Hussain al-Shahristani, Deputy Prime Minister for Energy in Iraq, told a conference in London: “We feel the world needs to be assured of fuel for economic growth. “Iran has been in touch with us. They want to share our contracts model and experience.”……………………………………….Full Article: Source

Commodity firms outperform sluggish Singapore market

Posted on 30 January 2014 by VRS  |  Email |Print

Commodity firms outperformed the Singapore market as the index edged down ahead of the outcome of the U.S. Federal Reserve’s two-day policy meeting through Wednesday.
Top performers on the index included Wilmar International Ltd and Golden Agri-Resources Ltd. Wilmar rebounded from a one-week decline, climbing as much as 1.6 percent to S$3.16, its biggest daily gain in nearly 10 weeks, while Golden Agri gained 2 percent to an intra-day high at S$0.52………………………………………..Full Article: Source

Iraq eyes return to Opec quota system

Posted on 30 January 2014 by VRS  |  Email |Print

Iraq has for the first time begun preparing for a return to the Opec (Organisation of the Petroleum Exporting Countries) production quota system, in a shift of policy that reduces the prospect of oversupply and lower prices in global oil markets.
Iraq, whose oil industry has recovered rapidly since the US-led invasion a decade ago, is expected to be one of the largest sources of supply growth in the oil market over the next decade………………………………………..Full Article: Source

Oil companies see Africa as a market

Posted on 30 January 2014 by VRS  |  Email |Print

Henry Appiah is making big changes at the Total SA service station that he manages in this bustling African city. He ousted souvenir vendors who had colonized part of his premises, instead renting the section to a small bank branch. Across the lot, he installed a Goodyear Tire Service Center. Nearby, a new carwash, a tuneup bay and racks of top-shelf motor oil entice Jaguar and Porsche owners.
Mr. Appiah waves his hands at his shining automotive estate. “Completely redone,” he says. Not quite. Inside the station’s convenience store, workers are installing a cappuccino maker………………………………………..Full Article: Source

Energy price gap with the US to hurt Europe for ‘at least 20 years’

Posted on 30 January 2014 by VRS  |  Email |Print

High gas and electricity prices will continue to plague Europe for at least 20 years, damaging the competitiveness of industries that employ almost 30m people, the world’s leading energy forecaster has warned.
In findings likely to inflame claims EU climate change policies are damaging the bloc’s manufacturers, the International Energy Agency said Europe will lose a third of its global market share of energy-intensive exports over the next two decades because energy prices will stay stubbornly higher than those in the US………………………………………..Full Article: Source

Coal will ‘dominate global power sector for decades’

Posted on 30 January 2014 by VRS  |  Email |Print

Coal will dominate the power sector globally for decades to come, according to a paper that miners say undermines campaigns by green activists to “demonise” coal.
The paper - written by an International Energy Agency consultant and to be sent to Industry Minister Ian Macfarlane - says coal will remain the dominant power-sector fuel for at least the next quarter of a century despite efforts to diversify power sources and concerns about slower economic growth………………………………………..Full Article: Source

World’s top money manager finds what really moves the gold price

Posted on 30 January 2014 by VRS  |  Email |Print

Nicholas J. Johnson, an executive vice president at PIMCO, the world’s largest money manager with an eye-watering $2 trillion in assets across its various funds, is also the company’s portfolio manager focusing on commodities.
In one of the giant financial company’s latest missives, Johnson makes a compelling attempt to demystify the gold price; something some of the smartest people in the financial world are more than willing to admit they cannot explain or understand………………………………………..Full Article: Source

Is the gold price based on hope?

Posted on 30 January 2014 by VRS  |  Email |Print

The gold price slipped further this morning, in anticipation of the FOMC’s statement later today. It was also hit by the rise in Turkey’s key interest rate, this move raised hopes that the flight from emerging markets would now slow somewhat.
Today is the second day of the FOMC’s two-day meeting. Despite the weak December nonfarm payrolls report, commentators appear to believe that the Fed will announce further tapering, following the December taper of $10 billion, from $85 billion previously………………………………………..Full Article: Source

Gold and silver ready to rumble higher?

Posted on 30 January 2014 by VRS  |  Email |Print

I have been writing about the bottoming process of the gold bear cycle since December 4, 2013, and my most recent article on December 26 reiterated that the best time to accumulate gold/silver stocks was in the December and January window. Specifically, this is what I wrote:
“These types of indicators are coming to a pivot point where gold is testing the summer $1,181 lows and may go a bit lower to the $1,090 ranges. At the same time, we see bottoming fifth wave patterns combining with public sentiment, bullish percent indices, and five-year lows in gold stocks. This is how bottoms in bear cycles form, and you are witnessing the makings of a huge bottom between now and early February 2014 if I am right………………………………………..Full Article: Source

Copper heads for longest slump in 15 months on economy

Posted on 30 January 2014 by VRS  |  Email |Print

Copper futures fell, capping the longest slump in 15 months, on speculation that rising borrowing costs in emerging markets will damp economic growth, eroding demand for industrial metals.
The South Africa Reserve Bank unexpectedly increased its benchmark interest rate, following central banks from Turkey to Brazil. Countries tightened monetary policy to bolster their currencies. A gauge of global equities approached the lowest in six weeks, while aluminum, nickel, zinc and lead dropped………………………………………..Full Article: Source

Commodity sector outlook got you down? Consider this metal

Posted on 30 January 2014 by VRS  |  Email |Print

Commodities have started to seriously bore Wall Street. That’s because commodity prices are expected to hold steady — at best — this year and many are expected to fall. Production is generally seen as keeping pace with or exceeding demand and inventories of a number of commodities are not low enough to bolster prices.
Barclays PLC put it succinctly recently in noting that commodity returns will remain “sluggish for some time to come.”……………………………………….Full Article: Source

Do ETFs push up the price of commodities?

Posted on 30 January 2014 by VRS  |  Email |Print

With ETFs linked to nearly every commodity imaginable, previously hard-to-invest-in commodities now have the potential to be house-hold investments. While you used to need a futures trading account to trade oil, now anyone with an equity trading account can buy an oil ETF; same goes for gold as well as a host of other commodities.
But does the added interest and easy access to commodities through ETFs push up the price of that commodity? While blanketed as ETFs, there are also commodity Exchange Traded Notes, known as ETNs. ETNs do not buy the physical commodity directly, but rather track a commodity index. For example, the iPath S&P GSCI Crude Oil Total Return ETN tracks the Goldman Sachs Crude Oil Return Index………………………………………..Full Article: Source

How to pick an ETF? Hint: Don’t focus on cost

Posted on 30 January 2014 by VRS  |  Email |Print

As individual investors buy into ETFs, there’s one very compelling aspect: a low cost relative to many traditional mutual funds. But for ETF experts, cost is rarely ever the deciding factor in making the decision to buy an ETF, especially now with so many ETFs in most major asset classes.
Cost is a factor in selecting the “right” ETF—fund costs eat into potential returns—but the best returns will come from ETFs offering an advantage across a number of variables, including the uniqueness of fund strategy relative to others in the same asset class, liquidity and trading costs………………………………………..Full Article: Source

Global ETF AUM to surpass hedge fund industry in 18 months –survey

Posted on 30 January 2014 by VRS  |  Email |Print

The Exchange Traded Funds (ETF) industry could surpass the hedge fund industry in Assets Under Management (AUM) in the next 12-18 months according to EY’s Global ETF Survey.
While growth rates will be highest in Asia and lowest in the more mature US market, the growth drivers will be the same across all markets – foreign currency share classes, fund of fund ETFs, new emerging market funds and commodity ETFs………………………………………..Full Article: Source

Nigeria: FG to complete sale of Abuja Exchange June

Posted on 30 January 2014 by VRS  |  Email |Print

The Federal Government has said the proposed sale of the Abuja Securities and Commodities Exchange will be completed by June this year. The director General of the Securities and Exchange Commission, SEC, Arunma Oteh, who disclosed this in Abuja noted that the government’s earlier commitment to complete the privatisation exercise by the end of last year could not hold, as it was unable to meet the deadline.
According to Oteh, “the government wants to privatise the only commodity exchange and it had committed to doing it by the end of last year. It didn’t meet that deadline, but it’s planning to do something by the middle of 2014.”……………………………………….Full Article: Source

JPMorgan said near decision on $2 bln commodities unit sale

Posted on 30 January 2014 by VRS  |  Email |Print

JPMorgan Chase & Co. (JPM) could fetch at least $2 billion for its commodities unit after it received bids from Blackstone Group LP (BX), Macquarie Group and Mercuria Energy Group Ltd., people with knowledge of the matter said.
JPMorgan will ask those suitors for more details on their offers to narrow the list to one exclusive bidder and may choose a winner as soon as this week, said the people, who asked not to be named because the information is private. The process could extend into February, one of the people said………………………………………..Full Article: Source

Citigroup expands in Europe energy markets

Posted on 30 January 2014 by VRS  |  Email |Print

Citigroup Inc. (C) is increasing its gas and power business in Europe as competitors from Bank of America Corp. (BAC) to Deutsche Bank AG withdraw amid tighter regulation and staff cuts at utilities.
The third-largest U.S. bank expanded its trading team in Europe last year while other firms cut headcount, Stuart Staley, global head of commodities, said in a phone interview from London. His group now employs 10 people in power and gas trading and sales in the region………………………………………..Full Article: Source

Sell-off in EM currencies continues

Posted on 30 January 2014 by VRS  |  Email |Print

The sell-off in emerging market currencies intensified on Wednesday despite a string of surprise rate rises by central banks as investors warned policy makers would need to take tougher action to restore confidence.
The rally that followed the dramatic midnight rate hikes by Turkey’s central bank fizzled out as analysts said monetary policy had not been tightened as much as initially thought. South Africa’s central bank also shocked markets by raising rates – but the rand continued to plunge after policy makers presented it as a one-off move that would not change its overall stance on inflation………………………………………..Full Article: Source

SNP accept currency union means loss of powers

Posted on 30 January 2014 by VRS  |  Email |Print

Scottish independence: The Scottish Government last night admitted it would have to “pool” sovereignty with the rest of the UK if it wanted to keep the pound after independence. The admission came after Bank of England Governor Mark Carney warned an independent Scotland would have to surrender key economic levers to join in a currency union.
It is understood the UK authorities could retain control over interest rates and exchange rates, and that limits could be applied to taxation and spending………………………………………..Full Article: Source

How Argentina’s currency crisis will hurt Brazil

Posted on 30 January 2014 by VRS  |  Email |Print

On January 22, the Argentina peso, already one of the weakest currencies on the planet, went from 6 to one to the dollar to over 7 to one the next day. It’s now 8.01 to the dollar as foreign reserves dwindle, and another commodity-led economy struggles in Latin America.
The country’s rainy day fund, the ubiquitous foreign cash reserves held by nearly every foreign nation, has declined by 20% in the last month and now stand at around $34 billion. Compare that to their rival Brazil’s foreign currency reserves, which are well over $300 billion. ……………………………………….Full Article: Source

Experts unconvinced latest reforms will save the European carbon market

Posted on 30 January 2014 by VRS  |  Email |Print

Policymakers have long asserted that making polluters pay is an effective way to reduce greenhouse gas emissions. But with Europe’s carbon market floundering, the EU is having to rethink how to go about setting a carbon price.
Carbon pricing only works as a climate change policy if the cost of emitting carbon dioxide is high enough to make companies change their behaviour. But the European carbon price has rarely been high enough to make that happen, and has plummeted in recent years. That means polluters have had little incentive to reduce their emissions………………………………………..Full Article: Source

Obama tells sidelined lawmakers that climate change is ‘a fact’

Posted on 30 January 2014 by VRS  |  Email |Print

President Obama declared that the uncertainty around climate change is at an end, telling Congress “the debate is over” about its impacts on the Earth.
His assertion in the State of the Union address served as a sugar rush for Democrats who are eager to confront opponents of reshaping the nation’s carbon-rich energy system. They also promise to fuel resentment among Republican lawmakers who are steadily working to highlight the negative impacts of cutting greenhouse gases in the electricity sector………………………………………..Full Article: Source

Commodities poised for a comeback

Posted on 29 January 2014 by VRS  |  Email |Print

U.S. growth and a steadying Chinese economy are giving a boost to beaten-up commodities, slowing a multiyear slide that has weighed on Canada’s most important exports. Commodity prices have been on a downward slope for the better part of three years, as limping western economies and a slowing China curbed demand for raw materials.
More recently, however, signs of stability in key commodity-consuming regions have provided some optimism that the worst could be over. The widely watched Thomson Reuters-Jefferies CRB index of commodities has climbed 4 per cent from its recent low earlier this month. Natural gas has been a standout among commodities, surging about 25 per cent since early December………………………………………..Full Article: Source

Commodities expected to rebound: Scotiabank

Posted on 29 January 2014 by VRS  |  Email |Print

Gold prices are set to rebound in 2014 as commodity markets in general get a boost from the U.S. economic recovery and a more stable Chinese economy, says Patricia Mohr, commodities specialist at Scotiabank Capital Inc.
“While gold is vulnerable to further rounds of Fed tapering through 2014 (that is, reduced ‘liquidity’), chances are good that gold has bottomed,” Ms. Mohr said in her latest report to clients. “Gold is currently trading at US$1,261 (bid as a ‘safe-haven’ amid fresh emerging-market concerns) and should rally to US$1,375 in 2015, on prospects for higher inflation in the second half of the decade.”……………………………………….Full Article: Source

10 things to watch for in the commodities space

Posted on 29 January 2014 by VRS  |  Email |Print

Citi commodity research has come out with a report highlighting 10 areas that should be watched as they will have an impact on the world’s largest commodity consumer with 40 per cent market share. These factors could shape commodity prices and demand outlook in the coming months and years.
Environmental initiatives: Environmental pressures are in the spotlight as never before, particularly for coal and steel, where the strictest measures yet were implemented in 2013. There remains a lack of top-level direction, but mid-level officials have begun to push………………………………………..Full Article: Source

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