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Commodities Briefing 19.May 2011

Posted on 19 May 2011 by VRS |  Email |Print

Ong Yi LingCommodities snapped a two-day decline as the outlook for increased demand from emerging markets prompted speculation that this month’s selloff was excessive. Investment spending in emerging markets is outpacing expenditures in developed economies for the first time as a surge in infrastructure supports global growth and profits.
Bulls say the expanding economy, led by China, India and Brazil, is raising demand at a time when producers from mining industry leader BHP Billiton Ltd. to oil company BP Plc can’t keep up……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Jean-Claude TrichetExpectations that commodity prices have resumed an uptrend pushed up equities in Asia’s materials sector on Thursday and let off some steam from the dollar’s rally this month.
Investors have been struggling to find a common theme in financial markets weeks after a series of routs in the commodities market led to a big reduction of risky assets in portfolios and economic data out of the United States and China flashing mixed signals……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Commodities will overcome a setback to extend their rebound from the record plunge in 2008 as an advance in oil and gold helps to compensate for a retreat in base metal prices, according to JPMorgan Chase & Co.
“In the short-term, the macro landscape seems to have taken a turn in recent weeks,” Ray Eyles, chief executive officer of the bank’s commodities business in Asia, said in an interview. “Ultimately the long-term fundamental supply and demand of commodities is still pointing to higher prices.”………………………………………Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Commodity prices are likely to fall further in the next month or two before rebounding toward the end of the year as demand continues to grow, prompting MF Global to expand its presence in the sector, a senior company executive said.
Brokerage MF Global Holdings, with a market value of $1.4 billion, maintained its long-term bullish outlook for the commodities and expected prices to rise 10-20 percent over the next 12 months from current levels due to a weaker dollar and rising global demand……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Bank of America Merrill Lynch has cautioned against gloom in risk assets, such as commodities, after fund managers cut their exposure to the sector to the weakest for eight months amid nascent fears of a price collapse.
The proportion of portfolio managers overweight in commodities is only 12% higher than those underweight, as they cut commodity positions “sharply” over the last month, a survey for the bank showed……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Commodity prices have a major bearing on inflation, global monetary policy and GDP growth; hence, it is essential to understand important turning points and trend reversals. Some blame the current correction in commodities on algorithmic trading and others on Chinese monetary tightening.
A narrow focus on every tweak in China’s monetary policy risks missing the bigger picture. Demand has indeed weakened in China to the point where its imports of key commodities are dwindling. It is further evidence of demand destruction globally resulting from an earlier surge in commodity prices, led by commodity-in-chief , oil……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Prices of commodities rose Wednesday, with oil bouncing back above $100, in a quick rebound that suggests investors see room for prices to increase after a massive selloff this month.
Crude-oil futures settled 3.3 percent higher, at $100.10 a barrel on the New York Mercantile Exchange after data from the Energy Department showed U.S. oil inventories held steady last week when analysts predicted an increase……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Iran’s President Mahmoud Ahmadinejad, who has taken over the country’s Oil Ministry, will attend next month’s OPEC meeting, raising concern that he may use the gathering to criticize western governments.
“Whoever is responsible for the Oil Ministry also participates in OPEC meetings,” Mohammad Reza Mir-Tajeddini, Iran’s vice-president for parliamentary affairs, told state-run Fars news agency today. “If OPEC meetings take place during his time as a caretaker, he will attend himself.”………………………………………Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Precious metals once again attempted to recover as the daily New York trading action got underway on Wednesday. Albeit the US dollar showed little in the way of gains (rising 0.16 on the trade-weighted index to 75.40) it also showed no tendencies to ease much below its recent multi-week highs for the time being.
Crude oil led the charge this morning, rising more than $1.20 per barrel and the enthusiasm for black gold spilled over into the silver pits where a 1.68% gain was seen in the early part of the trading morning in New York……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Silver and gold prices have just suffered the worst couple of weeks in recent memory. After making a lifetime high of $1,575.79 an ounce on May 2, spot gold prices are currently trending around $1,494, down more than five per cent.
Spot silver, on the other hand, has lost almost a third of its value since reaching a 31-year-high of $49.75 per ounce in late April, and is currently trading at $33.73 an ounce……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Gold and silver have snapped their three day losing streak so far this morning and both are higher in all currencies. Sterling has fallen on this morning’s very poor UK employment data.
This in conjunction with yesterday’s high inflation figure in the UK and negative data in the U.S. confirm the increasing threat of stagflation to western economies……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

This month began on a crazy note for silver, with its price falling from a record $49 an ounce to $33. But last week’s slump in silver price was inevitable given its unprecedented and abnormal rise, says an article in Beijing News. Excerpts:
The price of silver had been increasing for the past year and touched a record this month as the world economy recovered and inflation increased. But last week, it fell drastically. This sudden change in the metal’s price and investors’ fortunes occurred because silver cannot compare with gold as a secure investment……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Natixis Commodity Markets has retained its cautious outlook for the precious metals sector highlighting gold and silver prices in particular.
In publishing its second quarter metals review, Natixis said that most important was the potential for higher interest rates in most key regions………………………………………Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

With a public value of more than $400 billion, the ten largest exchange-traded funds are market powerhouses that account for over one-third of assets in the 1,216-member ETF universe. While there are some good investment options among them, a number of smaller, less-known choices offer lower expenses or alternative indexes covering similar securities.
First-place SPDR S&P 500 and sixth-place iShares S&P 500 both track the S&P 500 Index, a popular benchmark of 500 large company U.S. stocks, and have low expense ratios of 0.09 percent……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Gold exchange traded funds, also called gold ETFs, are the flavour of the season in India. Investors are rushing to trade in gold ETFs, which allow investment in the yellow metal in non-physical electronic mode.
As the Indian stock market tanks on a regular basis these days, small and wary investors are eager to invest their money in a safe haven……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

The first day of trading at the Hong Kong commodity Exchange promised a lot for the entire Asian region as nearly 1500 1 kg gold futures contracts were traded till afternoon Wednesday.
The Exchange, presently offering only 1 kg gold futures will start a silver contract in July followed by products involving precious and base metals, agriculture and energy. Commodity indexes are also in the pipeline. Analysts said the HKME will challenge other established bourses in Europe and US, like the NYMEX, CME and LME……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Bahrain Financial Exchange (BFX), which started operations this year, has delayed the launch of its conventional trading platform and is relocating some of its staff to other parts of the group, its chief executive said.
BFX, owned by India’s Financial Technologies, was launched in February this year as a multi-asset exchange aiming to offer trading in both conventional and Islamic products in equities, derivatives, commodities and currencies……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

The London Stock Exchange has become a credible takeover target as it faces a battle to merge with its Toronto counterpart and after NYSE Euronext beat off a hostile approach, analysts said.
LSE Group, led by chief executive Xavier Rolet, insists it is committed to a merger with its Toronto counterpart, TMX Group, after a Canadian consortium launched an informal takeover bid that could derail the deal……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Several major emerging-market currencies reclaimed gains Wednesday as a recovery in commodity prices encouraged investors to seek higher yielding, riskier currencies.
Emerging-market debt also strengthened versus U.S. Treasurys. The risk premium on the J.P. Morgan Emerging Markets Bond Index Global, or Embig, tightened by 9 basis points to 297 basis points over Treasurys, while in price terms its index rose 0.2%……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Julia Gillard has guaranteed carbon trading in Australia will be “shyster” proof, amid warnings the carbon offsets system could be rorted by organised crime gangs.
The Prime Minister said Australia would not repeat the mistakes that had exposed European carbon registries to multi-million fraud……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

Britain will halve its greenhouse gas output by 2025 from 1990 levels, Energy and Climate Secretary Chris Huhne said this week. Huhne told members of Parliament that the target, agreed by the government, would “set Britain on the path to green growth.”
“It will establish our competitive advantage in the most rapidly growing sectors of the world economy,” Huhne was quoted as saying Tuesday by the BBC……………………………………….Full Article: Source

Posted on 19 May 2011 by VRS |  Email |Print

The European Union said it will discuss proposed changes to carbon-registry rules with member states tomorrow and will call a vote on the issue in June, a month later than originally planned.
The regulation designed by the European Commission, the EU executive in Brussels, will improve protection against abuse and fraud in the region’s carbon market and facilitate the creation and transfer to the European Investment Bank of permits from a special post-2012 reserve valued at around 5 billion euros ($7 billion)……………………………………….Full Article: Source

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