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Commodities Briefing - Archive | April, 2015

China’s commodity demand returns, but will it last?

Posted on 30 April 2015 by VRS  |  Email |Print

Chinese demand for a wide range of commodities has been surprisingly strong this year despite worsening economic data, raising questions over how long the demand recovery can last. For the first three months of the year, oil demand grew an annual 7.7 percent, its biggest gain in over two years while March iron ore imports soared 18.5 percent on month, snapping a two-month run of declines.
Imports of refined copper metal rose to a four-month high last month, building on an 11.4 percent gain in copper consumption in February. And in the precious metals sector, March platinum imports jumped 26 percent on year, hitting their highest since December 2013………………………………………..Full Article: Source

Scotiabank’s Commodity Price Index Tumbles in March, but Will Strengthen in April

Posted on 30 April 2015 by VRS  |  Email |Print

After rallying in February, Scotiabank’s Commodity Price Index dropped by 3.7% in March, as oil prices retreated once again. The All Items Index is at its lowest level since January 2007 and is 32.8% below a year earlier.
“The good news is a spring rally has emerged in April, with price gains for oil and base metals,” said Patricia Mohr, Vice President of Economics and Commodity Market Specialist at Scotiabank. “West Texas Intermediate (WTI) oil prices have rallied back over US$57 in late April, as U.S. Department of Energy data indicates that U.S. shale oil production levelled out at about 5.618 million barrels per day (mb/d) in April and may edge down to 5.561 mb/d in May………………………………………..Full Article: Source

Where From Here For The Oil Price?

Posted on 30 April 2015 by VRS  |  Email |Print

The first topsy-turvy quarter of the current oil trading year is behind us, with both benchmarks – Brent and WTI – currently trading above the stated period’s average price well in to the second quarter. In fact, some commentators are quite keen to flag-up the fact that both benchmarks are hovering around price levels not seen since mid-December.
Using Brent, the global proxy benchmark, as a measuring rod – it is also worth remembering that mid-December’s mid-$60 per barrel price level was a decline from a higher mark, that continued into the next month with bearishness entrenched all around. April’s return to the stated level achieved recently is part of a price uptick, if not some sort of an overblown bullish rally………………………………………..Full Article: Source

How Low Can Oil Prices Go?

Posted on 30 April 2015 by VRS  |  Email |Print

In recent months, Americans have been greeted with relatively cheap gas upon filling up at the pump. Oil prices are experiencing record lows and gasoline prices are at the lowest levels the market has seen since 2010, with some areas of the country enjoying prices of less than $2 a gallon. While this comes as a welcome development for consumers, oil companies are struggling with choosing market share over profitability.
As prices fall, what are the short- and long-term implications for the oil industry? Will consumers continue to line their pockets as domestic and global oil prices plummet? This article will break down the causes for the current price drop in the oil market and the outlook on oil prices………………………………………..Full Article: Source

Why investors shouldn’t count on oil price stability

Posted on 30 April 2015 by VRS  |  Email |Print

If you’ve been following the Bank of Canada’s utterances lately, you know that a consistent and pretty optimistic story is emerging about how the economy is going to unfold this year.
Governor Stephen Poloz’s view is that Canada’s growth will start to rebound this quarter, then really take off in the second half, thanks to a burgeoning U.S. economy, stronger manufacturing and export sector, and, oh yes, stable oil prices. No doubt, a lot could go wrong and may already have………………………………………..Full Article: Source

Saudi Arabia elevates Aramco chief as it braces for more market uncertainty

Posted on 30 April 2015 by VRS  |  Email |Print

Saudi Arabia is likely grooming Khalid Al-Falih to replace Ali Al Naimi’s oil minister, as the kingdom prepares for more uncertainty in oil markets. On Wednesday, Saudi King Salman initiated a number of significant changes, including the promotion of Al-Falih as chairman of state-owned Saudi Aramco, a position previously held by Ali Al-Naimi, the 80-year-old oil minister.
Al-Falih, 55, who joined Aramco in 1979, and became its president and chief executive in 2009, now appears most likely to succeed Al-Naimi, given the kingdom’s long-standing tradition of promoting non-royals to the all-important position………………………………………..Full Article: Source

Meet the man who could be the next ruler of oil market

Posted on 30 April 2015 by VRS  |  Email |Print

There’s no one individual who has the power to shake the world oil markets quite like Ali al-Naimi, Saudi Arabia’s octogenarian oil minister. So the replacement of al-Naimi as chairman of state-owned Aramco with its former CEO Khalid al-Falih is being read as a signal by oil traders that he could now be the front runner for oil minister when al-Naimi retires.
He was also named to the post of health minister in a series of key appointments by King Salman bin Abdulaziz al-Saud, which included a sweeping succession plan with a new generation in line………………………………………..Full Article: Source

OPEC, Russia becoming unlikely allies

Posted on 30 April 2015 by VRS  |  Email |Print

The slump in oil prices is leading to an unlikely convergence of interests between Russia and OPEC which have traditionally seen each other as rivals. Russia will meet with OPEC on June 2-3 to discuss production adjustments in order to arrest falling oil prices, Energy Minister Alexander Novak said in Moscow.
The meeting will be held before the Organization of the Petroleum Exporting Countries gathers in Vienna on June 5 to discuss the global market. According to Russian officials, the country is on course to lose $180 billion this year from slump in oil prices………………………………………..Full Article: Source

Gold snaps two-day rally before Fed statement

Posted on 30 April 2015 by VRS  |  Email |Print

Gold fell on Wednesday as investors took profits following a two-day rally, but soft US economic data that hurt the dollar and lowered expectations for a Federal Reserve rate rise in June limited losses.
Spot gold was down 0.3 per cent at $1,210.91 an ounce at 1309 GMT. It has gained nearly 3 per cent in the last two sessions, climbing to a three-week high of $1,215 on Tuesday. US gold futures for June delivery fell $5.90 an ounce to $1,207.80, after rising to their highest level since April 7 in the previous session………………………………………..Full Article: Source

Rising US rates could trigger higher gold prices – GFMS

Posted on 30 April 2015 by VRS  |  Email |Print

A contrarian consensus has emerged whereby higher US rates, when in effect, are expected to trigger higher gold prices, while usually higher interest rates in a low inflationary environment would negatively impact the price of gold, as a non-yielding asset class, Thomson Reuters GFMS market analysts have reported.
The idea that prices will rise is based on the assumption that the market has already anticipated the rate increase, more than pricing it in, explains the GFMS metals research and forecasts team in the first of its new ‘Quarterly update and outlook’ reports, which supplements the yearly ‘Gold Survey’……………………………………….Full Article: Source

Gold Prices Inadvertently Spur Make In India’s Manufacturing Push

Posted on 30 April 2015 by VRS  |  Email |Print

Current volatility in the gold markets has led to a new wave of ‘Make In India’ that is taking place at home – notably in the jewelry segment. Before starting, it is important to note that India’s gem and jewelry industry is a hefty contributor to the country’s economy, comprising up to seven percent of GDP.
Industry body FICCI estimates that this market, valued at approximately $40.4 billion in 2013, has the potential to grow to $85 billion by 2018. However, facts and figures on the Indian jewelry segment tend to account largely for gems and gold, which have always been staples of the economy – purchases are made for religious and cultural occasions – and consumption relies on the price of gold. India is the world’s largest consumer of gold………………………………………..Full Article: Source

Gold market: A ‘contrarian consensus’ developing

Posted on 30 April 2015 by VRS  |  Email |Print

Accepted wisdom has it that rising interest rates in a low inflationary environment put pressure on the dollar price of gold as a non-yielding asset class. This time, however, the onset of the new interest rate cycle in the United States is expected to trigger gold price rises. The GFMS Metals Research and Forecasts team at Thomson Reuters has enhanced its suite of products with the launch of its first Quarterly Update and Outlook, supplementing the prestigious annual Gold Survey.
Rhona O‘Connell, Head of the GFMS team, said that “The next move in the gold price is likely to be the result of a complex interplay between competing asset classes. In the short term the price remains under some pressure, but any approach towards $1,100 will be constrained by a growing demand side response………………………………………..Full Article: Source

How China Will Shock the Gold Market

Posted on 30 April 2015 by VRS  |  Email |Print

One of the freaky things about tsunami waves is they’re barely noticeable out at sea. In the open ocean, where the depths can hide its raw power, a tsunami is only about a meter high at most. It’s when the tsunami wave finally hits land that it starts to rear up and tower overhead, astonishing and terrifying all who see it.
We’re about to see something like this in the gold market. Courtesy of China. I’ve told you recently how China is planning to dethrone King Dollar. Right now, those plans are slowly falling into place, just as I said. The country already announced it will unveil the new China International Payment System later this year. That opens the door to making the yuan (or renminbi) a fully convertible trading currency………………………………………..Full Article: Source

Should you applaud recent surge in metal ETFs?

Posted on 30 April 2015 by VRS  |  Email |Print

The commodity markets saw a choppy 2014, with the metals and mining ETF space being one of the most hurt spaces. A rising greenback amid QE-wrap in the U.S., concerns of further Fed tightening, global growth worries, deflationary fears and last but not the least the Chinese economic slowdown caused metal ETFs to see their worst days in several years.
However, to many investors’ surprise, metal ETFs received a fresh lease of life and logged refreshing returns in the last five days (as of April 27, 2015) along with several other commodity ETFs. In fact, metal and mining ETFs have been displaying a pretty nice trend lately healing their year-to-date bloodbath to a large extent………………………………………..Full Article: Source

Currency-Hedged ETFs Are 2015’s Hottest Trend

Posted on 30 April 2015 by VRS  |  Email |Print

Currency-hedged exchange-traded funds (ETFs) are perhaps the hottest trade in 2015. Since the beginning of the year, over $33 billion has flowed into these ETFs, which hold foreign equities but neutralize the foreign currency exposure.
The WisdomTree Europe Hedged Equity ETF (HEDJ), for instance, has experienced inflows of nearly $13 billion, the most of any ETF. And the Deutsche X-Trackers MSCI EAFE Hedged Equity ETF (DBEF) isn’t far behind with inflows of over $9 billion. Of course, the popularity of these funds has been driven by a strong U.S. dollar, which has gained over 20% in value against the euro over the past year………………………………………..Full Article: Source

Global Growth to Benefit Commodity Exporting Countries, ETFs

Posted on 30 April 2015 by VRS  |  Email |Print

With aggressive monetary easing policies supporting growth across Europe and Asia, investors can take a look at materials-based economies that help fuel the expansion, along with related international exchange traded funds. Europe, Japan and China are seeing improvements after the governments enacted loose monetary policies to stimulate their economies, writes Scott Colyer, chief executive of Advisors Asset Management, for InvestmentNews.
“One thing the world has learned is that asset prices generally love quantitative easing,” Colyer said. “Europe and Japan both have engaged in massive asset purchases, while China has lowered interest rates and bank reserve requirements.”……………………………………….Full Article: Source

Baltic sea freight index down on weak vessel rates

Posted on 30 April 2015 by VRS  |  Email |Print

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry bulk commodities, fell on Wednesday on lower vessel rates. The overall index, which factors in average daily earnings of capesize, panamax, supramax and handysize dry bulk transport vessels, fell six points to 595 points.
The capesize index was up seven points at 558 points. Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, fell $81 to $4,515………………………………………..Full Article: Source

Dollar Rally Is Over, Time To Rotate Into Multinationals, Commodities

Posted on 30 April 2015 by VRS  |  Email |Print

Goldman Sachs is wrong about the dollar, according to Cornerstone Macro in a report published on Monday. Cornerstone Macro is top ranked in macroeconomics research by Institutional Investors. The debate is always: What’s been driving the dollar? Goldman Sachs, for instance, believes foreign central banks’ monetary easing policies have been the catalysts that will push the U.S. dollar higher. See my April 23 blog “Goldman: The Dollar Rally Is Not Over“.
Cornerstone Macro’s Francois Trahan and team take a different view. “Our work suggests that the bulk of dollar strength [over the past several quarters] has been a function of a global growth slowdown,” wrote the analysts………………………………………..Full Article: Source

Yuan may get a second chance if it fails IMF currency basket review

Posted on 30 April 2015 by VRS  |  Email |Print

The International Monetary Fund (IMF) won’t rule out a possibility of holding a special review before 2020 to discuss the yuan’s eligibility to join its special drawing rights (SDR) basket if the currency fails to make it at a five-yearly review this year, an IMF official said.
The IMF’s 24-member executive board is due to meet informally next month before a formal review in autumn that will examine whether any currencies meet the criteria to be added to SDR, a type of monetary reserve currency created in 1969 which operates as a supplement to the existing reserves of a number of key economies around the world………………………………………..Full Article: Source

EU nations agree carbon market reforms should start in 2019-sources

Posted on 30 April 2015 by VRS  |  Email |Print

European Union member states reached a provisional agreement that carbon market reforms should begin on Jan. 1, 2019, at closed-door talks on Wednesday, paving the way for a further round of negotiations next month, diplomats said.
Member states have been arguing for weeks over when a reform referred to as the Market Stability Reserve (MSR) should be introduced to remove some of the surplus allowances that have depressed permit prices on the EU Emissions Trading System (ETS). The ETS is meant to be central to the EU’s efforts to reduce carbon emissions, but oversupply following recession has meant the price of permits is so low, it is very cheap to burn coal, the most carbon-intensive of the fossil fuels………………………………………..Full Article: Source

Cap-and-trade plan just another Liberal cash grab

Posted on 30 April 2015 by VRS  |  Email |Print

The more we learn about Premier Kathleen Wynne’s cap-and-trade plan, the more apparent it becomes it’s just another multi-billion-dollar Liberal cash grab. Here’s why: The purpose of carbon pricing, or so we’re told, is not to raise more money for governments, but to change human behaviour by getting us to consume less.
That’s why any credible carbon pricing system raises taxes on consumption (in effect, a broadly based sales tax) and then returns every dollar raised to the public in income tax cuts. The purpose is to encourage people to consume less, since consumption leads to increased greenhouse gas emissions because fossil fuel energy is required to produce virtually all goods and services today………………………………………..Full Article: Source

Commodities Rout Over … For Now

Posted on 29 April 2015 by VRS  |  Email |Print

Commodity prices continue to be overwhelmed by slack demand, over-supply in many parts of the complex, a strong U.S. dollar, and weak economic growth. Add to this the ever present geopolitical factors (an inevitable and key component of price formation). Continued price weakness (and volatility) across the complex continues. Many consumers, meanwhile, are reaping the short term benefits.
Commodities remain the dismally performing asset class, with the slowdown in China, over-production, extensive QE, and dollar strength among those continuing to undermine prices. However, prices have been declining so much for so long now that we may have reached a short-term price bottom, beyond which it’s difficult for any more softening………………………………………..Full Article: Source

Russia Plans to Meet With OPEC Before Group Next Gathers in June

Posted on 29 April 2015 by VRS  |  Email |Print

Russia, the world’s biggest energy exporter, will meet with OPEC before the group next gathers in June to discuss whether to adjust production limits, amid prices that are almost half their level of 10 months ago.
Talks with the 12-nation group will take place on June 2-3, Energy Minister Alexander Novak said Tuesday in Moscow. The Organization of Petroleum Exporting Countries gathers in Vienna on June 5 with no signs so far that it will alter plans to maintain output amid a surplus. Novak said April 15 that a meeting with OPEC would happen in June, without giving a date………………………………………..Full Article: Source

Opec officials said to plan technical talks with non-Opec in May

Posted on 29 April 2015 by VRS  |  Email |Print

Opec officials will meet with representatives from oil producers outside the group to discuss the global market in May, a few weeks before the organization’s ministerial meeting, according to two people with direct knowledge of the matter.
Technical experts from Russia, Mexico and Oman will confer with counterparts from the OrganiSation of Petroleum Exporting Countries’ 12 members at the group’s secretariat in Vienna on May 12 to 13, said the people, who asked not to be identified because the talks are private. The conference was suggested by member nation Venezuela, they said, which has urged OPEC to revive prices by cutting output………………………………………..Full Article: Source

Oil market climbs on Iran reports

Posted on 29 April 2015 by VRS  |  Email |Print

Oil prices have risen, reversing earlier losses on confusion surrounding reports that Iran had taken control of a container ship in the strategic Strait of Hormuz, dealers say. New York’s benchmark West Texas Intermediate for June delivery added US2c to $US57.02 a barrel.
London’s Brent North Sea crude for June gained US16c to $US64.99 a barrel in late afternoon deals. “During the afternoon … reports hit, and were later denied, of Iranian forces taking control of a US vessel,” IG analyst Chris Beauchamp said………………………………………..Full Article: Source

Oil see-saws on report of Iranian ship seizure

Posted on 29 April 2015 by VRS  |  Email |Print

A reminder that politics can move an oil market that’s been paying more attention of late to rigs counts and inventories. Crude prices were in a state of flux on Tuesday amid reports that Iranian forces had seized a cargo ship in the Persian Gulf.
Brent spiked by nearly a dollar to $65.46 a barrel following initial reports from Saudi Arabia’s Al Arabiya News that the vessel in question was a US ship. The report - later denied by the Pentagon - also pushed prices for West Texas Intermediate, the US oil benchmark, a dollar higher to $57.82 a barrel………………………………………..Full Article: Source

Do Oil Price Trends Have a Clear Direction?

Posted on 29 April 2015 by VRS  |  Email |Print

First, the price of oil surged this morning as reports came in on social media of an incident in Iran. Then, it dropped rapidly as the details showed the incident as a confrontation between Iranian warships and a Marshall Islands-flagged cargo ship. Such is the oil market these days.
Months after plummeting and holding all markets hostage during a sell-off few had expected– but weeks after a bounce-back rally–oil traders now have very itchy trigger fingers. In the very near term, traders and strategists are looking at the fundamentals and saying oil simply can’t jump too high. The facts are: stockpiles are at an 80-year high and there remains a massive global glut of crude. With the market still vastly oversupplied, prices should be lower………………………………………..Full Article: Source

Saudi keen to maintain oil market share

Posted on 29 April 2015 by VRS  |  Email |Print

Saudi Arabia’s high crude oil production policy is based on the status of global demand and the top oil exporter is keen to maintain its market share, the kingdom’s deputy oil minister said. Speaking to reporters in Saudi Arabia, Prince Abdulaziz bin Salman bin Abdulaziz described the oil market as “excellent”, suggesting the Opec heavyweight was comfortable with current global conditions.
“As the minister mentioned, the kingdom responds to demand and supplies oil to wherever the demand is and whoever asks for it,” he said. “We care about our market share, we care about maintaining our customers and we care about the stability of the market.”……………………………………….Full Article: Source

India’s gold demand down 5.68% in March quarter

Posted on 29 April 2015 by VRS  |  Email |Print

India’s gold consumption declined by a marginal 5.68 per cent in the quarter ended March this year, primarily due to expectations of a cut in import duty. In terms of consumption, India continued to lag China, with a wide gap of 27 per cent.
Data compiled by global consultancy GFMS showed India’s overall gold consumption stood at 179.5 tonnes in the quarter, against 190.3 tonnes in the year-ago period. While jewellery consumption rose a marginal two per cent to 148.5 tonnes, the investment segment reported a steep 30 per cent decline at 31 tonnes………………………………………..Full Article: Source

Gold shines ahead of Fed statement

Posted on 29 April 2015 by VRS  |  Email |Print

Hopes that the Federal Reserve will refrain from significant changes in its April statement due on Wednesday have buoyed gold prices. Gold rallied for a second straight day, rising 0.9 per cent to $1,212.62 an ounce, on expectations that Fed policymakers will acknowledge the recent spate of soft economic data, which in turn would make a June rate rise less likely than previously thought.
The timing of the Fed’s first rate rise has largely governed the price of gold this year. As an asset class that offers no yield, the prospect of a rate rise has weighed on gold, as investors rotate into income yielding assets………………………………………..Full Article: Source

Switzerland And Gold: What Next?

Posted on 29 April 2015 by VRS  |  Email |Print

How can we explain such a reversal so shortly after a campaign by the SNB against gold? We must remember that during the referendum campaign the SNB and its president strongly defended the peg and promised it would continue. I expected the Swiss Gold Referendum to be a big shock in the central bank sector and the gold market, but only if passed and it didn’t.
However, the consequences of the initiative, I am sure, helped prepare the “big surprise” event that was the lifting of the cap by the SNB just a month and a half later. The strong support for the initiative scared the banking industry and the SNB and, even though defeated, I think it affected the central bank in some way. It was a message from the people………………………………………..Full Article: Source

Silver price could eventually outperform gold – UBS

Posted on 29 April 2015 by VRS  |  Email |Print

The silver price could eventually outperform that of gold in percentage terms, UBS said, highlighting the metal’s encouraging performance so far in 2015. Silver was last at $16.36 per ounce, up four percent on the start of the year. It peaked at $18.49 in January and bottomed out at lows of $15.29 in March.
It is outperforming gold so far this year – the yellow metal started 2015 at $1,189 per ounce and was last at $1,200, up one percent. “Silver had been underperforming gold for most of April, with the gold:silver ratio rising from the low 70s towards the highs around 75. The underperformance was likely in large part due to positioning,” UBS’ Edel Tully said………………………………………..Full Article: Source

What’s with JP Morgan and its massive silver hoard?

Posted on 29 April 2015 by VRS  |  Email |Print

All markets are rigged – and silver especially so! That may be a cynical appraisal but the fact remains that any entity with sufficient capital behind it can usually move any market in the direction that suits it – the size of the market concerned perhaps being the key factor here as to whether this would be easily accomplished, or even attempted!
And silver is a small enough market to be in the sights of the big money which theoretically can move it whichever way it wants through huge forward purchases or sales in the futures markets. As those who’ve been around a while will recall, oil billionaires Nelson Bunker Hunt and William Herbert Hunt, back in 1979/80 attempted to corner the silver market in just this way………………………………………..Full Article: Source

Silver miners moving up the endangered list

Posted on 29 April 2015 by VRS  |  Email |Print

Pure-play silver miners, a niche investment market popular with retail investors, are moving up the endangered list. Buffeted by a 68 percent plunge in the price of silver since 2011, miners who traditionally made most of their money from silver are increasingly diversifying into gold, buying mines that have been put up for sale and looking to acquire more.
In addition to spurring deals in the precious metals space, the trend is reducing investment avenues for those wanting to take a bet on a commodity that often outperforms gold when bullion is rising. ……………………………………….Full Article: Source

Good news for platinum industry

Posted on 29 April 2015 by VRS  |  Email |Print

New commercial vehicle sales in the 28-member European Union bode well for platinum producers in South Africa. Sales figures for March released in Brussels by the European Automobile Manufacturers Association showed a 20.7% increase on last year.
Even though the region produces less than a quarter of the world’s new vehicles, European demand accounts for just over a third of global platinum demand for use in autocatalysts. The March 2015 year-on-year sales growth was the highest since December 2013, following gains of 8.3% y/y in February and 7.6% y/y in January………………………………………..Full Article: Source

Where to next for the iron ore price?

Posted on 29 April 2015 by VRS  |  Email |Print

Iron ore rose to its highest level since March last night at $US59.09, and is now up 25 per cent for the month. The rise, which follows BHP Billiton’s decision last week to slow the pace of its $US2 billion expansion plan in the Pilbara, comes after the iron ore price suffered its largest quarterly loss since 2009 in the three months through March and fell to a decade-low of $US47.08 a tonne earlier this month. Steel demand in China was down 5 per cent year-on-year during the March quarter.
The biggest question facing the industry is whether BHP’s slowdown will be matched by Rio, Gina Rinehart’s Roy Hill project or Vale, which is halfway through a $US19 billion expansion in Northern Brazil………………………………………..Full Article: Source

Iron ore rally: Mere dead cat bounce?

Posted on 29 April 2015 by VRS  |  Email |Print

A breath-taking rally in iron ore prices in recent weeks has put the sector back in bull market territory, but strategists warn that the upside may be short-lived. The beleaguered commodity has recovered 25 percent since hitting a ten-year low of $46.70 per metric ton earlier this month; a 20 percent gain from recent lows is typically considered in bull market territory.
Spot prices traded just below $60 a ton on Tuesday, extending a two-and-a-half week run and pushed Australia’s benchmark stock index to seven-year highs on Monday………………………………………..Full Article: Source

Should You Applaud Recent Surge in Metal ETFs?

Posted on 29 April 2015 by VRS  |  Email |Print

The commodity markets saw a choppy 2014, with the metals and mining ETF space being one of the most hurt spaces. A rising greenback amid QE-wrap in the U.S., concerns of further Fed tightening, global growth worries, deflationary fears and last but not the least the Chinese economic slowdown caused metal ETFs to see their worst days in several years.
However, to many investors’ surprise, metal ETFs received a fresh lease of life and logged refreshing returns in the last five days (as of April 27, 2015) along with several other commodity ETFs. In fact, metal and mining ETFs have been displaying a pretty nice trend lately healing their year-to-date bloodbath to a large extent……………………………………….Full Article: Source

How Humdrum ETFs Are Overtaking Racy Hedge Funds

Posted on 29 April 2015 by VRS  |  Email |Print

It’s part of a gradual change in culture on Wall Street that’s encouraging low costs and long-term thinking. It’s like the investment world’s version of the race between the tortoise and the hare. And the hare is losing its lead.
Hedge funds, investment pools known for their exotic investment strategies and rich fees, have long been considered one of the raciest investments Wall Street has to offer, with $2.94 trillion invested globally as of the first quarter, according to researcher Hedge Fund Research………………………………………..Full Article: Source

Global equity mutual funds, ETFs post $31.8 billion April inflows

Posted on 29 April 2015 by VRS  |  Email |Print

Global equity mutual funds and exchange-traded funds showed $31.8 billion of net inflows in April through Friday, TrimTabs Investment Research said on Tuesday, putting them on track to surpass the record inflow of $34.8 billion in March.
U.S. equity mutual funds and exchange-traded funds have posted net withdrawals of $15.4 billion this month through April 24. “Equity flows shifted into emerging markets recently as investors chased the monster rally in China,” said Winston Chua, analyst at TrimTabs. “Interest in Europe cooled off in recent days, and investors still want nothing to do with the U.S.”……………………………………….Full Article: Source

Can hedge funds turn the tide in 2015?

Posted on 29 April 2015 by VRS  |  Email |Print

According to Preqin, hedge funds have started this year with a bullet. The Preqin All-Strategies Hedge Fund benchmark posted a 2.49% return in February, the highest monthly return since January 2013. The performance is timely given that hedge fund performance was a concern in 2014. The challenge, and opportunity, still remains for hedge funds to continue the uptick in Q1 as equity markets look to be buoyant and commodity markets remain turbulent.
According to the latest HFR Market Microstructure Industry Report, new hedge fund launches were down last year (in numerical terms, down 20 on the 1,060 funds launched in 2013). While launches have trended in a narrow range in recent years, they remain well below the peak of 2,073 funds launched in 2005, though nearly double the local trough of 659 launches in 2008. This is now the third consecutive year of decline, while fund liquidations saw their first drop since 2010………………………………………..Full Article: Source

Hedge Funds Lead Shift In Dollar Sentiment

Posted on 29 April 2015 by VRS  |  Email |Print

Betting that the dollar will keep pushing higher against major currencies has lost its allure. Up until a few weeks ago positioning for a further climb of the dollar against the euro and the yen was the only game in town, but investors and traders’ are scaling back on the trade, according to the latest positioning data from the Commodities Futures Trading Commission, which measures a portion of the market that serves as a good proxy for the whole.
In fact, being long the dollar has been named as the most crowded trade for months in surveys of fund managers by Bank of America Merrill Lynch. But now the trade is losing steam………………………………………..Full Article: Source

How the Yuan Could Win Reserve Currency Status Even if the U.S. Objects

Posted on 29 April 2015 by VRS  |  Email |Print

Will the U.S. back China’s latest bid to make the yuan a global currency? It may not really matter. Washington’s veto-power at the International Monetary Fund may not apply when the executive board decides later this year whether to include the yuan in the elite basket of currencies that comprise the IMF’s emergency lending reserves.
China’s bid to get its currency included in the IMF’s Strategic Drawing Rights, or SDR, has recently gained support from key U.S. allies as Beijing increasingly flexes its muscle in the global economy………………………………………..Full Article: Source

History shows a currency breakup isn’t always a disaster

Posted on 29 April 2015 by VRS  |  Email |Print

Investors, economists and commentators have spent a lot of time agonizing over the prospect of a Greek exit from the euro, and not without justification. But the chart below from Adam Slater, lead economist at Oxford Economics, underscores the fact that currency breakups themselves are far from rare events and that, in most cases, the exit hasn’t been followed by a cataclysmic drop in output.
In fact, more than 70 countries and territories have exited currency unions since 1945, notes Slater. And he observes that when steep falls in output did occur, it was often the result of factors like civil war or a transition from a planned economy to a market economy………………………………………..Full Article: Source

Carbon scheme ‘must look overseas’

Posted on 29 April 2015 by VRS  |  Email |Print

The Abbott government faces growing business pressure to open its Direct Action carbon-emissions-reduction scheme to trade in international abatement permits as a way of cutting the nation’s climate-change costs. The Australian Chamber of Commerce and Industry and the Australian Industry Greenhouse Network, which represents emissions-intensive trade-exposed industries, have backed international trading to minimise costs of carbon abatement.
They join the Australian Industry Group and a range of ­climate-change activists who also advocate trade in inter­national permits. The Climate Change Authority has also suggested the purchase of inter­national permits could dramatically cut the costs of Australia’s emissions-reduction efforts………………………………………..Full Article: Source

How will Paris approach carbon pricing?

Posted on 29 April 2015 by VRS  |  Email |Print

As the World Bank and others ramp up the discussion on carbon pricing, heads are turning towards Paris with thoughts on how the issue will be incorporated into the expected COP21 global climate deal. I have said many times in the past that unless a carbon price makes its way into the whole global energy system, then its success in bringing down emissions is far from assured.
While local carbon pricing wins will appear, the global effort could be undermined by a lack of global coverage. This is true of other policy approaches as well, but in the case of carbon pricing there is the significant benefit of economic efficiency. For me, the signs so far aren’t great, with the text that came out of the Geneva ADP meeting showing few signs of tackling this important issue………………………………………..Full Article: Source

Three risks that could derail this year’s commodity rally

Posted on 28 April 2015 by VRS  |  Email |Print

Can commodities continue their early year rally? After spending most of 2014 sinking, prices for commodities such as oil have steadily climbed in the past few months, leading analysts to speculate whether the commodity bear market is finally at an end.
The picture is certainly looking brighter, said Julian Jessop, economist at Capital Economics, but there are three key risks that could prevent a real commodity turnaround in the coming months. The first one is the ongoing strength of the U.S. dollar, which has reached its highest level in more than a decade………………………………………..Full Article: Source

Should I Have Held Commodities In My Portfolio?

Posted on 28 April 2015 by VRS  |  Email |Print

Commodity funds manifest inferior risk-adjusted return, relative to other asset classes. Absence of conclusive superior risk-adjusted returns for portfolios holding commodity funds. Commodity performance as an investment varies by the particular fund (proxy) used. Commodities are a relatively new asset class. (They are new at least with respect to domestic equities.)
That is, it was only within the last dozen years that a lay investor could get their hands on a commodities mutual fund. And as with many new investments, the fledgling commodities fund history has been relatively volatile; the previous bull run has turned bear………………………………………..Full Article: Source

BofA raises oil price forecasts for 2016

Posted on 28 April 2015 by VRS  |  Email |Print

Bank of America Merrill Lynch has revised upward its oil price forecasts for 2016, but said it remained bearish amid oversupply, weak demand from emerging markets, a return of U.S. shale production and expectations of a deal on Iran.
The bank raised its outlook for Brent next year to $62 per barrel from $58, but kept its WTI outlook unchanged at $57, as it expects only a moderate draw in global inventories. For 2015, BofA saw Brent averaging $58 per barrel and WTI at $53. The bank had previously forecast Brent at an average of $52 this year, and WTI at $50………………………………………..Full Article: Source

Investors Step Up Bets on Oil Price Recovery

Posted on 28 April 2015 by VRS  |  Email |Print

Investors last week pushed the number of bets that oil prices would rise to a record high, even as some market observers worry prices could slip in the short-term. Net long positions taken by large investors in futures and options contracts that the price of Brent crude oil would increase rose 3.2% during the past week, according to the Commitment of Traders report from Intercontinental Exchange Inc.
That pushed the total number of bets that oil prices will rise to a net 271,929 contracts, the highest level since the report was first prepared in 2011. With a contract equivalent to 1,000 barrels of oil, that represents the equivalent of nearly 272 million barrels of crude oil at stake………………………………………..Full Article: Source

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