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Commodities Briefing - Archive | September, 2016

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

Posted on 30 September 2016 by VRS  |  Email |Print

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

Fourth-Quarter Curse May Be Over for Commodities

Posted on 30 September 2016 by VRS  |  Email |Print

In recent years, the fourth quarter has heralded a big fall in commodity prices. But this year will be different, according to Barclays, which says stronger economic growth in Asia and supply curbs across commodities should support prices through the end of the year.
Commodities prices have fallen in the fourth quarter for the last five years. In the last two years that decline has been particularly steep, according to the Bloomberg Commodity Index, which fell by 16.8% in 2014 and 24.8% in 2015………………………………………Full Article: Source

Commodity sector rally set to be extended

Posted on 30 September 2016 by VRS  |  Email |Print

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

Opec agreement to cut oil production faces array of hurdles

Posted on 30 September 2016 by VRS  |  Email |Print

Reports of the cartel’s demise were exaggerated — but who will cut output, and when? As he emerged from nearly five hours of talks in Algiers on Wednesday evening, Iran’s oil minister Bijan Zanganeh stopped to speak to reporters.
“Opec made an exceptional decision,” he said, as the Saudi energy minister left the meeting without taking questions. After two years of squabbling, the cartel had finally crafted a provisional deal to cut production and tackle the global supply glut in crude oil………………………………………Full Article: Source

Why China is the oil ‘wild card’ that could overrule any OPEC moves

Posted on 30 September 2016 by VRS  |  Email |Print

OPEC may now have come around to the idea of capping output, but any efforts by the cartel to boost oil prices longer-term could easily be quashed by an unexpected player in the energy market: China.
Taking advantage of the slump in oil prices, the country has in recent years aggressively accelerated its buildup of strategic petroleum reserves, giving it a strong tool to cap a rally in oil prices, energy experts said………………………………………Full Article: Source

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

Posted on 30 September 2016 by VRS  |  Email |Print

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

Is the oil world big enough for two swing producers?

Posted on 30 September 2016 by VRS  |  Email |Print

This is what the oil market looks like in 2016: Traders and investors this week had one eye on Algiers, where the Organization of the Petroleum Exporting Countries on Wednesday vowed to cut production for the first time in eight years.
And OPEC has one eye on what is happening in the bountiful shale fields from the Permian Basin in Texas to the Bakken formation on the plains of North Dakota where exploration firms are poised to drill more………………………………………Full Article: Source

OPEC oil deal is not really a deal, it’s more of an ‘agreement to agree’

Posted on 30 September 2016 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries agreed to curb production for the first time since 2008 on Wednesday, but just a day later, energy market analysts are questioning the meaning of the deal.
OPEC minted a preliminary plan to cut production to as little as 32.5 million barrels a day, from about 33.2 million barrels in August, sources told Reuters. But output quotas for each of the cartel’s 14 members would be left undecided until its annual meeting Nov. 30………………………………………Full Article: Source

OPEC proved it still matters by ending the market-share battle

Posted on 30 September 2016 by VRS  |  Email |Print

Proving pundits wrong and overcoming skepticism, two days of round-the-clock deliberations in Algiers brought about a landmark agreement in which the Organization of Petroleum Exporting Countries agreed to slash output. The decision marks the end of the battle for market share.
“This is the end of the ‘production war’ – OPEC claims victory,” Phil Flynn, analyst at Chicago-based brokerage Price Futures Group, told Reuters. “The cartel proved that it still matters, even in the age of shale.”……………………………………..Full Article: Source

OPEC’s Real Challenge Is Far Bigger Than Shale

Posted on 30 September 2016 by VRS  |  Email |Print

Shale? OPEC is competing with something far bigger and harder to tame: U.S. capital markets.The morning after the night before in Algiers, Chesapeake Energy announced a private placement of $850 million in 10-year convertible notes.
Chesapeake, which pioneered the shale-gas land-grab strategy before 2008, is better known these days for its creative efforts to chip away at its debts. The placement’s timing may be an accident, of course. But I’m going to go out on a limb and suggest maybe not.Why?……………………………………..Full Article: Source

OPEC ‘Capitulation’ Still Leaves Hurdles for U.S. Shale Drillers

Posted on 30 September 2016 by VRS  |  Email |Print

OPEC finally blinked in its two-year price war with U.S. oil producers. Whether that translates into a financial victory for the American shale industry remains to be seen.
Oil prices and the shares of U.S. drillers kept climbing on Thursday, a day after the Organization of Petroleum Exporting Countries promised its first production cut in eight years. The U.S. companies will need oil to hold above $50 a barrel for months before they commit to more spending, according to analysts at firms including S&P Global Platts and Oppenheimer & Co………………………………………Full Article: Source

BMO: Safe-Haven Demand To Drive Gold, Silver Prices Through To 2019

Posted on 30 September 2016 by VRS  |  Email |Print

Safe-haven demand will continue to drive gold and silver prices higher next year and support the precious metals market in the next three years, according to one Canadian bank that is making across-the-board revisions to its precious metals forecast.
In a report published Thursday, analysts at BMO Capital Markets, said that they see gold prices averaging $1,413 for 2017, up 5% from their previous forecast $1,350 an ounce. “We look past the upcoming Fed meeting in December – though it undoubtedly drives short-term volatility – and instead focus on monetary policy that is anything but “normal” for the next year or two at least,” the analysts said………………………………………Full Article: Source

Gold Is “Money” Because It Is Plentiful, Not Because It Is Scarce

Posted on 30 September 2016 by VRS  |  Email |Print

Gold, and its brother silver, have always been the basis of money, back to the beginnings of “money,” in the late fourth millennium B.C. Already by 2000 B.C., gold and silver had been “money” for over a thousand years – the entire history of “civilization” on this planet.
Gold was still the basis of money in the 1960s, in an unbroken line stretching back to the beginnings of history. One somewhat counterintuitive requirement for “money” is that it does not have a utilitarian purpose; at least, not one whose value is comparable to its money value………………………………………Full Article: Source

Gold demand likely to fall to 750 ton in 2016 on high price

Posted on 30 September 2016 by VRS  |  Email |Print

India’s gold demand is likely to fall to around 750-800 tonnes in 2016, as against 860 tonnes last year, mainly due to sharp rise in prices and jewellers’ strike following new regulations, World Gold Council has said.
“In the first half of this year, gold demand fell to 248 tonnes. We think that demand will be better in the second half on the back of good monsoon,” WGC India MD Somasundaram PR said. He pegged the gold demand at 750-800 tonnes for the 2016 calendar year………………………………………Full Article: Source

Gold Investment’s ‘Remarkable Return’ Set to Run in 2017

Posted on 30 September 2016 by VRS  |  Email |Print

Gold investment is set to keep growing into 2017 says a new report from leading analysts, because the financial and economic backdrop to this year’s “remarkable” return of Western money managers to precious metals is set to continue.
The price of silver, platinum and palladium will likely rise faster however, the research says, with the three white metals attracting “speculative” money, offering “value” relative to gold, and enjoying “healthy fundamentals” respectively. “Investor confidence in precious metals is forecast to continue improving next year,” says the new Precious Metals Investment Focus……………………………………..Full Article: Source

Russia’s Adding Another 200 Tons of Gold to Its Treasury and Here’s Why

Posted on 30 September 2016 by VRS  |  Email |Print

Russia plans to stock up on about 200 tons of gold this year, nearly matching the 208 tons it purchased in 2015. That’s according to Anton Navoi, the deputy head of the statistics department at the Russian Central Bank.
Navoi explained that it’s profitable for the state to buy the precious metal, since Russia is a world leader in its production. Speaking at a conference on Wednesday, the official said that “last year, the Central Bank purchased 208 tons of gold. This year, it will purchase around 200 tons.”……………………………………..Full Article: Source

Hillary Clinton or Donald Trump: Which Candidate Is Better for Gold?

Posted on 30 September 2016 by VRS  |  Email |Print

Following a multiyear downtrend, 2016 has been something of a rebirth for the gold market. Since the beginning of the year, gold’s per-ounce price has risen by more than $260, or 25%, with gold turning in its best quarter in 30 years in Q1!
What’s been driving the lustrous yellow metal higher? First, the Federal Reserve’s dovish monetary policy has been a big help. Perhaps gold’s biggest influencer is opportunity cost, or the act of giving up a gain in one asset for the possibility of a greater gain in another………………………………………Full Article: Source

China’s Rusty Cars Set to Sustain Rally for 2016’s Top Metal

Posted on 30 September 2016 by VRS  |  Email |Print

China’s drivers will increasingly demand rust-proof cars. That’s good news for the price of zinc, the anti-corrosion fighter that’s already this year’s top performer among base metals.
Annual passenger vehicle sales in China will rise to 24 million in 2020, from 19 million last year, McKinsey & Co. forecasts. Only about a third of locally-manufactured autos use galvanized panels to prevent corrosion and rusting, according to Heron Resources Ltd., a developer that’s joining rivals who are building or reopening zinc mines………………………………………Full Article: Source

Watch for Breakouts in These Commodity ETFs

Posted on 30 September 2016 by VRS  |  Email |Print

Oil, gold, and silver are all moving in sideways patterns following strong rallies earlier in the year. Given that these commodities are all in what is likely to a long-term uptrend, a breakout to the downside from these patterns will present an opportunity for longer-term investors to buy at more favorable prices.
Bearish traders will also likely pounce on the opportunity to profit from the short-term decline. An upside breakout from these patterns indicates another wave higher and will attract both short-term and longer-term traders………………………………………Full Article: Source

The ETF Explosion (Video)

Posted on 30 September 2016 by VRS  |  Email |Print

It took Exchange Traded Funds 18 years to reach $1 trillion in assets, but only four to reach $2 trillion. And with assets expected to double again in a couple years alongside a never-ended stream of new products hitting the market, how can an investor make the most of this innovative new tool set?
Cantor Fitzgerald’s Reginald M. Browne, Ritholtz Wealth Management’s Joshua M. Brown and OppenheimerFunds’ Sharon French discuss at the Bloomberg Markets Most Influential summit in New York………………………………………Full Article: Source

Low-Code Development Pays Off For Commodities Exchange

Posted on 30 September 2016 by VRS  |  Email |Print

The CME Group, owner and operator of the world’s largest derivatives marketplaces, has moved to a low-code platform for business process management. Commodities trading is fast-paced, highly regulated, and critical to the economy. CME Group owns and operates the Chicago Mercantile Exchange, the largest options and futures trading exchange in the world, along with the Chicago Board of Trade, the New York Mercantile Exchange (NYMEX), and COMEX.
CME Group sounds like the sort of organization that would hew to a conservative, time-tested development platform for applications. But according to Ari Studnitzer, managing director of architecture and product management at CME Group, the company has embraced a low-code platform that is helping keep both users and regulators happy………………………………………Full Article: Source

Dollar falls against franc, pares gains vs yen on Deutsche Bank concerns

Posted on 30 September 2016 by VRS  |  Email |Print

The U.S. dollar hit a more than one-month low against the Swiss franc and trimmed gains against the yen on Thursday on concerns over Deutsche Bank, while increased expectations for a December Federal Reserve rate hike kept the greenback generally afloat.
The franc and the yen, which are perceived to be safe-havens, benefited from the worries surrounding Germany’s biggest lender. U.S.-listed shares of Deutsche Bank (DB.N), which is fighting a $14 billion U.S. demand to settle claims over mortgage-backed securities, fell by more than 8 percent after touching record lows in Europe this week………………………………………Full Article: Source

A Donald Trump win could rock this currency (and it’s not the one you think)

Posted on 30 September 2016 by VRS  |  Email |Print

The Australian dollar would suffer most if Donald Trump were to win the U.S. presidential election, according to one foreign exchange strategist who calls the currency a “surprise trade” in this arena.
Boris Schlossberg, managing director of FX strategy at BK Asset Management, pointed out the Mexican peso has been the “inverse proxy for Trump’s political fortunes in the currency market for the last month,” appearing to rise and fall conversely on the Republican nominee’s favorability in the polls………………………………………Full Article: Source

7 signs that China is serious about combating climate change

Posted on 30 September 2016 by VRS  |  Email |Print

Two years after President Obama and Chinese President Xi Jinping announced that their countries would work together to combat climate change, Republicans and conservatives in the U.S. continue to cite China’s rising carbon emissions as a reason not to bother cutting our own.
Earlier this month, Donald Trump’s economic advisor Stephen Moore claimed that limiting our carbon pollution is pointless because of China’s supposedly growing coal dependency. “Every time we shut down a coal plant in the U.S., China builds 10,” Moore told E&E News. “So how does that reduce global warming?”……………………………………..Full Article: Source

Inside the judges’ questions on carbon trading

Posted on 30 September 2016 by VRS  |  Email |Print

Coal-heavy states and companies have centered their political challenges to U.S. EPA’s Clean Power Plan on arguments that the rule is unachievable. But those arguments didn’t fare well this week in front of federal judges.
A range of studies have shown that many states’ power companies are already near the 2030 greenhouse gas levels EPA has assigned. Those that are not could use carbon trading to get there while keeping costs low for consumers. The rule would allow companies that do not shut down enough coal units to reach their own carbon levels to purchase allowances or credits from companies with greener portfolios………………………………………Full Article: Source

IMF warns against protectionist tendencies in global economy

Posted on 29 September 2016 by VRS  |  Email |Print

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

Why commodity-linked sukuks should be introduced?

Posted on 29 September 2016 by VRS  |  Email |Print

A sukuk is a sharia-based hybrid instrument that can have the features of both a conventional debt instrument and of equity. An example of equity is the stock of an enterprise. The stock’s value depends on the performance of the company and can be held in perpetuity; the stocks are neither paid (pre-fixed) dividends at set future times nor are they guaranteed capital appreciation.
The stock-holders share in the risk of the enterprise, and both the return and timing of the return on their investment depend on the performance of the enterprise. In contrast to a stock, a conventional bond is a debt instrument; it has a fixed duration, with the principal usually paid at maturity. Coupons of a prefixed amount are paid at set future times. …………………………………..Full Article: Source

Oil market to recover in late 2017

Posted on 29 September 2016 by VRS  |  Email |Print

The oil market has balanced out in 2016 and will restore in late 2017, Russian Energy Minister Alexander Novak said. “The market follows the path of balance anyway,” the minister said in an interview with Russia 24 TV channel. “The year 2016 has already balanced out the market partially, and I think that the market will recover in late 2017,” he added.
The International Energy Forum takes place in Algiers on 26-28 September, RIA Novosti reports. An informal meeting of OPEC members is said to take place within the framework of the forum……………………………………Full Article: Source

Oil prices could drop to the mid-$30s ‘in a hurry’ this autumn

Posted on 29 September 2016 by VRS  |  Email |Print

Enough of politics — it’s time for some good old-fashioned central-bank distraction. Stock futures are showing that Wall Street’s gains may be running out of steam after Tuesday’s run, which is why investors will keep a close eye on the flurry of Federal Reserve officials coming our way today.
It wasn’t just the appearance of a win for Hillary Clinton at Tuesday’s debate that helped prop up stocks, but also the prospect of the Fed pushing out rate hikes to December. When the central bank’s chief Janet Yellen testifies on Capitol Hill this morning, investors will be looking for her to “bridge the gap” between policy makers’ divided views, says Interactive Investor’s Rebecca O’Keefe……………………………………Full Article: Source

Opec agrees on oil output cut at Algiers meeting

Posted on 29 September 2016 by VRS  |  Email |Print

Crude prices climb more than 6% as cartel ministers reach consensus on production curbs. Some of the world’s biggest oil producers have agreed to cut production for the first time in eight years, sending crude prices higher by more than 6 per cent.
After more than four hours of talks in Algeria on Wednesday Opec committed itself to reducing output to between 32.5m barrels a day and 33m b/d, according to ministers. The agreement surprised oil traders who thought a consensus would be difficult to reach because of divisions between Saudi Arabia and Iran, two of Opec’s largest and most influential members……………………………………Full Article: Source

OPEC States Understand Measures Needed to Stabilize Oil Market - Qatar Minister

Posted on 29 September 2016 by VRS  |  Email |Print

According to the Qatari energy and industry minister, OPEC member states have a mutual understanding on measures that need to be taken for the stabilization of the oil market. The Organization of the Petroleum Exporting Countries (OPEC) member states have a mutual understanding on measures that need to be taken for the stabilization of the oil market and reduction of crude price volatility, Qatari Energy and Industry Minister Mohammed Saleh Abdulla Sada said Wednesday.
“There is a common understanding that we need to look at market stabilization measures at reducing the length of the down tier and reducing the volatility,” the minister said during an informal meeting of OPEC on oil output freeze……………………………………Full Article: Source

Vitol CEO says does not see tighter oil market before 2018

Posted on 29 September 2016 by VRS  |  Email |Print

The chief executive of Vitol, the world’s largest oil trader, said on Wednesday he did not see the global oil market tightening before 2018. He also expressed scepticism over the significance of a potential OPEC deal on freezing production.
“If you freeze production at a level that is clearly above demand … is that bullish?” Ian Taylor asked a Bloomberg conference in London. Investors were closely watching an OPEC meeting in Algiers this week anticipating that the cartel would finally agree a plan to tackle a global crude surplus that sent oil prices tumbling in 2014. But so far, the talks have remained just that……………………………………Full Article: Source

Which Market Is OPEC Talking Up Exactly?

Posted on 29 September 2016 by VRS  |  Email |Print

Hey, OPEC, you did it, guys! Look: Yay! Oh… News of an apparent OPEC freeze agreement led U.S. E&P stocks to end Wednesday 6 percent higher. Wait, you didn’t want to boost U.S. exploration and production stocks? Huh. Well, you did it anyway. Even better, you did it without technically having really done anything.
OPEC delegates have ostensibly agreed to cut their crude-oil production to around 32.5 to 33 million barrels a day. The range is the first clue there is much work yet to be done in order to turn those numbers into reality. The second clue is that production allocations for individual members haven’t been set yet. Instead, how the pain gets shared will dominate OPEC’s next formal meeting in November……………………………………Full Article: Source

What is the best way to buy gold?

Posted on 29 September 2016 by VRS  |  Email |Print

Should I look at miners, bullion or exchange-traded products? Many investors perceive it to be a haven during times of market turmoil, so it can do well during financial crises. Historically, it has also traded in a way that shows a low correlation to other financial assets.
Our current guidance is for gold to make up between 3 per cent and 5 per cent of a balanced portfolio. It has been a popular commodity investment in 2016, and the price has risen by 26 per cent in the year to date……………………………………Full Article: Source

How Gold Came to South Korea’s Rescue

Posted on 29 September 2016 by VRS  |  Email |Print

Nineteen years ago, South Korea came precipitously close to bankruptcy. The Asian financial crisis had spread like a virus. Thailand, Malaysia, Singapore and other Southeast Asian countries were all affected, inciting fears of a global economic meltdown if the crisis couldn’t be contained.
Before 1997, South Korea had been held up as a textbook example of economic reversal and resilience. Once a poor Japanese colony, the country underwent an unbelievably rapid transformation in the second half of the 20th century, propelled by smart policy reforms and heavy investment in education. Many called it the “Miracle on the Han River.”…………………………………..Full Article: Source

Whom is gold voting for? A market puzzle

Posted on 29 September 2016 by VRS  |  Email |Print

If Donald Trump manages to win the presidential election, will that be good or bad for gold? This proves to be an interestingly controversial issue, which goes to the multifaceted nature of the precious metal as an investment.
Some market participants say that a surprise Trump victory will cause considerable market anxiety, leading safe havens like gold to surge. Others say that Trump’s antipathy for stimulative monetary policies will mean more rate hikes down the line, spiking the dollar and consequently hurting gold prices……………………………………Full Article: Source

Gold Ends Lower On Chart-Based Selling

Posted on 29 September 2016 by VRS  |  Email |Print

Gold prices ended the U.S. day session weaker Wednesday, on mostly technical selling amid a lack of fresh, markets-moving fundamental news on this day. Some U.S. economic data released Wednesday did not significantly impact the metals or other markets. Also, Fed Chair Janet Yellen spoke on banking issues before Congress, but did not address U.S. monetary policy.
Traders and investors worldwide were watching the OPEC oil cartel meeting in Algiers, which began Wednesday. Most energy market watchers do not believe OPEC at this meeting will make any significant moves to reduce their collective crude oil output, or to forge an agreement with Russia to stabilize world oil prices……………………………………Full Article: Source

Gold Could Soar Quickly to $1750 or even $2000 with a Trump Win

Posted on 29 September 2016 by VRS  |  Email |Print

The Presidential election is taking place in the United States just six weeks from now. So far, the gold market is expecting a victory by Hillary Clinton on November 8. Her win means “more of the same” Obama-style policies coming out of the White House.
Hillary Clinton is the favored candidate of the “establishment” in Washington, DC as well as in big business and the media. The latest polls show her slightly ahead of Donald Trump but her slim edge over Trump could shrink further as the election nears……………………………………Full Article: Source

SocGen Sees Gold Improving To $1,350 Average In 4Q

Posted on 29 September 2016 by VRS  |  Email |Print

Societe Generale looks for gold to rise moderately for the remainder of 2016 on expectations for a slow pace of Federal Reserve monetary tightening, even if the central bank hikes interest rates in December. Analyst Robin Bhar listed a fourth-quarter price average of $1,350 an ounce.
Gold has been underpinned this year by investor buying, with exchange-traded-trade fund interest spurred by a move from zero to negative interest rates in many nations, ongoing uncertainty surrounding this summer’s U.K. Brexit vote, the U.S. presidential election and concerns about a slowing Asian economy, Societe Generale said……………………………………Full Article: Source

In Metals, China Domination = Criticality of Supply

Posted on 29 September 2016 by VRS  |  Email |Print

Even ten years ago the British Geological Society was a very low profile institution and scarcely figured on the radars of mining folk, with the USGS being far better known and cited far more often.
However, while the USGS was known for its annual individual metals summaries, the BGS appeared on the scene with a wallop at the end of the last decade with its broad reaching study and ranking of criticality of metals, which came to be known as the “Risk List”. …………………………………..Full Article: Source

ProShares Launches New Actively Managed Oil ETF

Posted on 29 September 2016 by VRS  |  Email |Print

ETF issuer ProShares today debuted a new oil-focused ETF that offers investors exposure to WTI crude oil futures contracts, but allows them to skip the hassle of dealing with K-1 partnership tax forms.
The new fund, dubbed ProShares K‑1 Free Crude Oil Strategy ETF is the only crude oil-focused ETF that is not a commodities partnership. Therefore, it does not deliver K‑1 tax forms to shareholders……………………………………Full Article: Source

As Oil Jumps, Largest Energy ETF Spikes To Its Best Level In Two Weeks

Posted on 29 September 2016 by VRS  |  Email |Print

Energy ETFs rebounded Wednesday on reports that major world oil producers may be in accord on cutting output. The news built up hopes for a floor under crude prices, which have crumbled over the past year amid a persistent supply glut.
Oil prices jumped after major world oil producers were said to have reached an agreement to reduce oil production for the first time since 2008. The OPEC (Organization of the Petroleum Exporting Countries) deal will not be formalized until November……………………………………Full Article: Source

London Metal Exchange Looks to Win Back Business

Posted on 29 September 2016 by VRS  |  Email |Print

LME plans to cap rent costs at registered warehouses in an effort to fight back against cheaper, private facilities. It is getting harder to know how much of the world’s metal is in storage, and that is a problem for anyone trying to determine a market price for aluminum, copper or nickel.
Warehouses registered with the London Metal Exchange have been a major storage hub of base metals for dozens of years. These facilities provide inventory data on a daily basis, making them a handy gauge of industry supply……………………………………Full Article: Source

Sebi allows options trading in commodities

Posted on 29 September 2016 by VRS  |  Email |Print

Sebi’s move aims to enhance liquidity and broad base participation in the commodity market. Capital markets regulator Securities and Exchange Board of India (Sebi) on Wednesday allowed commodity derivative exchanges to launch options contracts for trading with the aim of increasing liquidity and attracting more investors to the commodities market.
Sebi said commodity options will facilitate hedging by market participants and help deepen the commodity derivatives market. The exchanges have been allowed to trade in options following a recommendation by the Commodity Derivatives Advisory Committee (CDAC), Sebi said in a circular……………………………………Full Article: Source

Yuan Derivatives Trade Dries Up as Drop Swells Hedging Costs

Posted on 29 September 2016 by VRS  |  Email |Print

Hedging against further declines in Asia’s worst-performing currency has become so expensive that some global investors are throwing in the towel on yuan bonds.
The cost of swapping dollars for China’s currency has risen above the yields on onshore sovereign notes as depreciation extends into a third year. Daily trading in yuan derivatives, which accounts for more than 40 percent of the total for the currency, slumped 30 percent from three years earlier, data from the Bank for International Settlements show……………………………………Full Article: Source

Hong Kong to remain a yuan hub as currency joins reserve basket, says HKMA chief

Posted on 29 September 2016 by VRS  |  Email |Print

Hong Kong Monetary Authority chief executive Norman Chan Tak-lam expects Hong Kong to play a bigger role in international yuan business as the currency will be increasingly used for international trade settlement after it joins the IMF’s reserve currency basket this weekend.
Chan predicts that half of all China trade will be settled in the currency in five years time. He said the yuan will be more widely used for global trade settlement after it becomes part of the International Monetary Fund’s Special Drawing Right basket this Saturday. Regarded as something of an elite club, it means the yuan will become one of the five reserve currencies to be held by global central banks, alongside the US dollar, British pound, Japanese yen and euro……………………………………Full Article: Source

Carbon emissions in spotlight at GlobalGAP Summit

Posted on 29 September 2016 by VRS  |  Email |Print

Delegates can offset travel carbon emissions as GlobalGAP pledges support for UN Sustainable Development Goals. GlobalGAP chairman Guy Callebaut said that in at least seven of the SDGs, GlobalGAP is “closely concerned”. “Our commitment to the SDGs will be public from now on,” he said.
Chief executive Kristian Moeller explained how carbon trading business Gold Standard is sponsoring the initiative to offset delegates’ carbon emissions. “Every time a delegate hands in a completed form, we put a peanut in the container. We hope to get one peanut for all 400 delegates, and thus become the first carbon-neutral conference. We are using peanuts to show that carbon is not peanuts – we need to talk about this, let’s really make it happen,” he said……………………………………Full Article: Source

Here’s what a Trump presidency will mean for commodity prices, according to the CBA

Posted on 28 September 2016 by VRS  |  Email |Print

If it wasn’t already, interest in the US presidential race is about to go up a notch. Today’s presidential debate between Democrat Hillary Clinton and Republican Donald Trump, arriving at 11am on the east coast of Australia, is seen by many as an event that could either slam the door shut on a Trump presidency, reversing his recent ascendancy in the polls, or blow the race to the White House wide open.
While the outcome of the November 8 poll will not be known for six weeks, analysts around the world have been hypothesising over what a Trump presidency — currently seen as around a 35% probability — will mean for financial markets……………………………………Full Article: Source

The Impact of Commodities on FX Markets

Posted on 28 September 2016 by VRS  |  Email |Print

Steven Saywell, global head of FX strategy at BNP Paribas, discusses the outlook for oil and commodities overall, plus their impact on currencies. He speaks with Guy Johnson and Caroline Hyde on Bloomberg Television’s “On The Move.”.………………………………….Full Article: Source

OPEC Considers Cutting 1 Million Barrels a Day

Posted on 28 September 2016 by VRS  |  Email |Print

OPEC plans to discuss Wednesday a proposal that would cut almost 1 million barrels a day of global production over one year, said people involved in the discussions, setting up a showdown between Saudi Arabia and Iran.
The plan isn’t expected to be agreed to on Wednesday when the Organization of the Petroleum Exporting Countries plans an informal gathering on the sidelines of an energy conference in Algiers. The scenario is meant to start discussions that could pave the way for an agreement when the producer group meets again in November, the people said……………………………………Full Article: Source

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September 2016
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