Finance Markets

November 2, 2006

New York markets lower at mid-session

Permalink: New York markets lower at mid-session

Filed under: Equities, Economy, US

The New York equities markets were lower at mid-session on Thursday, with the Dow Jones Industrial Average down 0.3 percent to 112,001.01, the Nasdaq Composite 0.1percent lower to 2,331.84, and the S&P 500 falling 0.2 percent to 1,365.19. Earlier in the day, the Dow fell below the 12,000 level for a time.

Much of the declines was due to a mixed retail sector, as several discount retailers failed to live up to analyst expectations. While Costco held steady at $52.91, Kohl’s dropped 0.6 percent to $70.65. Wal-Mart fell 1.2 percent to $48.27 on sales that grew by only 0.5 percent in October and a forecast of flat sales in November. Dillard’s and Target each dropped 1.5 percent, to $29.34 and $56.82 respectively.

On the other hand, high-end retailers showed good sales in October saw gains in share prices. JC Penney was 1.3 percent higher to $76.11, while Nordstrom gained 1.6 percent to $47.05.

Intel dropped 1.6 percent to $20.82 on a downgrade from “buy” to “neutral” from Merrill Lynch. In issuing it’s remarks, the broker cited excess capacity and weakening demand. But in other computer-related stocks, Dell Computer added 3.3 percent to $24.82 on an upgrade from “sell” to “neutral” from Goldman Sachs.

European equities markets lower

Permalink: European equities markets lower

Filed under: Equities, Economy, Europe

Equities markets in Europe were lower on Thursday on concerns about the state of the US economy and as the European Central Bank held interest rates level but issued comments strongly indicating that rates would be raised at its December meeting.

The FTSE Eurofirst 300 closed down 0.4 percent to 1,443.94, while both the Xetra Dax in Germany and the Paris index dropped 1.1 percent, to 6,223.33 and 5,310.07 respectively.

Most banks saw declines. Credit Suisse was an exception, adding 2.3 percent to SFr76.65 on a quarterly report that beat expectations. Elsewhere, UBS fell 1.1 percent to SFr74.10 and Deutsche Bank dropped 1.9 percent to €96.70. The largest bank in Norway, DnB Nor, was 2.9 percent lower to NKr83.70 after it said its pre-tax profits dropped by 1.5 percent.

The oil sector was lower as crude oil prices continue their decline. Cepsa dropped 0.5 percent to €61.85, while Statoil was 1.2 percent lower to NKr165.50

The steel sector also saw losses, with ThyssenKrupp down 1.7 percent to €29.34 and Mittal Steel dropping 3.2 percent to €32.72.

Tire manufacturer Continental was 0.6 percent higher to €87.50 on positive broker comments from Citigroup and Merrill Lynch.

Metrovacesa added 2.9 percent to €120 after it reported that net profits were up by 176 percent in the first nine months of the year. The Spanish property group’s gains were attributed to domestic growth as well as growth in its French unit.

Nikkei, Topix each drop 2.2 percent

Permalink: Nikkei, Topix each drop 2.2 percent

Filed under: Equities, Economy, Asia, Japan

The Tokyo equities markets were lower on Thurdsay, with both the Nikkei 225 and the Topix index dropping 0.2 percent, to 16,350.02 and 1,619.02 respectively. Both export-focused and domestic sectors were instrumental in the declines.

Stocks in technology sectors were hit by bad news out of the United States, including declines in the semiconductors sector and weak manufacturing figures for October. Advantest dropped 1 percent to ¥5,750. In the electronics sector, Matsushita dropped 1.6 percent to ¥2,415, while Pioneer fell 2.9 percent to ¥1,791. Camera manufacturer Canon, meanwhile, was 0.5 percent lower to ¥6,280.

Sectors related to metals were lower on dropping prices for raw materials, as both the non-ferrous metals and metals products sectors were 0.4 percent lower on the session. Sumitomo Metal Mining dropped 1.4 percent to ¥1,530.

The real estate sector was 0.5 percent lower as a whole, with Mitsui Fudosan falling 0.7 percent to ¥2,860.

Gainers included Suzuki Motor, which added 2.4 percent to ¥3,420 on a positive quarterly report and an upgraded full-year prediction.

Bridgestone was even on the day at ¥2,445 on a report of a decline of 34 percent in operating profits in the third quarter. Higher raw materials prices were to blame. The tire maker’s share price was initially lower after the report, but an unchanged full-year forecast helped regain the losses.

Corn prices rise in Chicago

Permalink: Corn prices rise in Chicago

Filed under: Commodities, Oil, Metals, Economy

Crude oil prices were lower again on Thursday despite new data from the Energy Information Administration which indicated that demand for gasoline, distillate fuel and jet fuel grew by an average annual rate of 2.2 percent in the four weeks ending October 27 over the same period in 2004. Last year’s figures were not used in the comparison due to disruptions following the severe hurricane season. Demand this year averaged over 15.5 million barrels per day. At the same time, imports of crude oil were down even though domestic production has decreased each year in the past three while demand has increased.

Brent crude for December delivery dropped 51 cents to $58.47 per barrel by late afternoon in New York, while West Texas Intermediate crude December contracts were 35 cents lower to $58.36 per barrel on the New York Mercantile Exchange.

In metals markets on Thursday, lead prices scored another record high on the London Metal Exchange, reaching $1,703.5 per tonne. Meanwhile, three-month copper traded in the $7,200/$7,220 per tonne range as stockpiles rose but remained at less than three days’ global consumption in LME warehouses. Aluminium added $26 to trade in the $2,756/$2,760 per tonne range.

December corn prices on the Chicago Board of Trade were up 16.5 cents to $3.50 per bushel in early afternoon trade after hitting $3.5350 per bushel earlier in the session, it’s highest price since September 1996. The spike in corn prices sent December wheat and soyabean futures higher on the CBOT as well. December soybeans added 13 cents to $6.58 per bushel, while wheat was 13.5 cents higher to $5.01 per bushel.

Euro stronger on ECB comments on inflation

Permalink: Euro stronger on ECB comments on inflation

Filed under: Forex, USD, GBP, Euro, Economy, Yen

The euro benefited from Thursday’s decision by the European Central Bank’s comments that strongly signal that Eurozone interest rates will rise in December. The comments came as the Bank announced that it will leave rates at 3.25 percent this month. The ECB’s president said in the remarks that “strong vigilance” against interest rates is needed. Many analysts are convinced that not only will rates rise in December, but that they will rise again after the first of the year. Strong new manufacturing data out of the Eurozone is one bit of evidence for the expected rate hikes.

By mid-afternoon in New York, the euro had added 0.2 percent against the US dollar, sterling and the Japanese yen, sitting at $1.2770 versus the greenback, at £0.6695 against sterling, and at ¥149.50 in relation to the yen. Before the decision, the euro had declined against the yen, falling as low as ¥148.86.

The US dollar dropped 0.1 percent to ¥116.90 after both the Bank of Japan and Japan’s Finance Minster made remarks that indicated a planned hike in interest rates there if the economy there continues to grow as expected.

The Australian dollar dropped 0.2 percent versus the US dollar to $0.7735 on retail sales that were slower than expected in September. Despite the new data, analysts still expect the Reserve Bank of Australia to hike interest rates by 25 basis points to 6.25 percent when it meets next week.

November 1, 2006

Crude oil prices on decline again

Permalink: Crude oil prices on decline again

Filed under: Commodities, Oil, Metals, Economy

Crude oil prices continued their downward trend Wednesday on news of higher inventories in the US and a return by North Korea to six-party talks, lessening tensions over its nuclear ambitions. The North Koreans agreed to the return after Washington said it would discuss the financial sanctions that were leveled against North Korea in the wake of missile tests it conducted.

New inventories data showed that crude oil stockpiles added 2 millions barrels last week, while the numbers showed that there was less gasoline and heating oil in storage than had been anticipated. At midday in New York, Brent crude December contracts dropped 68 cents to $58.35 per barrel. December delivery West Texas Intermediate crude fell 54 cents to $58.19 per barrel.

In the metals markets on Wednesday, gold hit a seven week high as it climbed $9.70 to $615.70 per troy ounce on weakness in the US economy, signaled by a drop in October’s numbers on manufacturing from the Institute of Supply Management and the further decline of the dollar.

Base metals were also lower, with copper dropping $225 to $7,150 per tonne in London on Institute of Supply Management data that showed prices paid for base metals lower as well as on London Metal Exchange copper inventories which are rising. Aluminium as lower as well, by $58 to $2,731 per tonne.

Eurofirst advances after recent declines

Permalink: Eurofirst advances after recent declines

Filed under: Equities, Economy, Europe

The FTSE Eurofirst 300 added 0.4 percent to 1,449.34 on Wednesday to finally end the session with an advance after four consecutive days of losses.

Banks were mixed on the session. After early losses following the release of its third-quarter report, Deutsche Bank came back to close just 0.1 percent lower to €98.55 after going as low as €97.55 earlier in the day. The report showed that while net profits were about where they had been forecast to be, trading income was significantly lower. Elsewhere in the sector, UBS added 0.9 percent to SFr74.95 after its 5 percent decline on Tuesday.

The telecommunications sector was also mixed. Swedish telecom operator Tele2 added 12.8 percent to SKr85.75 on third-quarter earnings that were higher than had been anticipated and on an announcement that it will withdraw from some European markets and turn its attention from fixed-line operations to broadband. Greek telecom Cosmote also saw gains, adding 2.6 percent to €19.80 on an upgrade from Bear Stearns. On the other hand, Deutsche Telekom dropped 0.2 percent to €13.53 after early gains. Rumors circulated that Russian group Sistema was looking to acquire a stake in DT in trade for control of its telecoms operations.

Continental fell 0.7 percent to €87 on a third quarter report that showed earnings down almost 1 percent before interest and tax. Still, Dresdner Kleinwort reiterated its “buy” recommendation and target share price of €105 on the tire maker.

Tokyo markets mixed on banks, telecoms

Permalink: Tokyo markets mixed on banks, telecoms

Filed under: Equities, Economy, Asia, Japan

The Nikkei 225 was lower on Wednesday in Tokyo, falling 0.2 percent to 16,375.26, while the Topix index gained 0.3 percent to 1,622.51 as banks saw advances.

The banking sector was up 1.4 percent as a whole after the Bank of Japan issued a strong report on the economy. Mitsubishi UFJ added 1.4 percent, matching the sector, to ¥1,490,000. The report has raised hopes that interest rates could be increased sooner than had been expected.

The consumer finance sector also saw gains on the session. Acom was 4.7 percent higher to ¥4,710, while Sanyo Shinpan gained 4.9 percent to ¥4,690 and Takefuji added 6.1 percent to ¥4,500 as investors seemed to decide that recent losses have made share prices in the sector a bargain.

In the telecommunications sector, Softbank fell again, by 4.9 percent to ¥2,435, as it continued to lose customers since number portability was introduced. After questioning from the Fair Trade Commission, Softbank also said Wednesday that it will review its advertisements for price cuts.

Real estate was 0.7 percent lower as a sector on the session, and is down 5 percent in just over a week. Sumitomo Realty & Development dropped 2.1 percent on the session, to ¥3,800.

Sterling stronger as US dollar weakens

Permalink: Sterling stronger as US dollar weakens

Filed under: Forex, USD, GBP, Euro, Economy, Yen

The US dollar was weaker on Wednesday on new data from the Institute of Supply Management that shows the manufacturing sector at its lowest level since June 2003, well below the forecast numbers. Analysts said that this new survey, coupled with other recent disappointing economic news, supports the view that the next time the Federal Reserve alters interest rates, that alteration will be in a downward direction. This view is in direct opposition to recent comments made by Richmond Fed president Jeffrey Lacker that interest rates need to be raised further.

The greenback was 0.2 percent lower versus both the euro and the yen, to $1.2780 and ¥116.80 respectively, and down 0.3 percent against the Swiss franc to SFr1.2415 by mid-afternoon in New York.

Sterling continued to strengthen, adding 0.1 percent to £0.6680 in relation to the euro and gaining 0.2 percent to $1.9110 against the US currency. The gains came even though the UK manufacturing purchasing managers’ index was down to 53.7 in October, from 54.5 in September. Output prices, however, were up, increasing the likelihood that the Bank of England will hike interest rates when its Monetary Policy Committee meets next week.

The only major currency to fall in relation to the US dollar was the Canadian dollar, on the news of a proposal by Canada’s finance minister to end the favorable tax treatment now received by income trusts in that country. The Canadian dollar dropped 0.8 percent to C$1.1310 versus the greenback.

In Norway, the krone added 1 percent to NKr6,4690 to the US dollar and was 1.1 percent higher to NKr8.2650 versus the euro after the Norges Bank hiked the interest rate there by 25 basis points to 3.25 percent and said that further hikes could come sooner than had been expected.

Bond yields lower in US, UK, Eurozone

Permalink: Bond yields lower in US, UK, Eurozone

Filed under: Bonds, Economy, US, Europe, UK, Japan

With the manufacturing index from the Institute of Supply Management down to 51.2 in October, well below the expected 53.0 level and lower than September’s figure of 52.9, prices for US Treasury bonds were up and yields declined on Wednesday. Some analysts see the new figures as beginning to contradict remarks out of the Federal Reserve that interest rates won’t be dropping anytime soon.

In late-morning trade in New York, the two-year Treasury bond was 4.6 basis points lower to 4.663 percent, while ten-year bonds had lost 2.8 basis points to a yield of 4.580 percent.

Yields were also lower in the eurozone and in the UK. Eurozone bonds were lower ahead of Thursday’s scheduled meeting of the European Central Bank, where most analysts expect interest rates to hold at 3.25 percent for the time being. Late in the trading day, the two-year Schatz was 3.9 basis points lower to a yield of 3.632 percent, while the ten-year Bund dropped 3.7 basis points to 3.703 percent. The two-year gilt fell 2.3 basis points lower to 5.010 percent, while the ten-year gilt was 0.5 basis points lower to a yield of 4.510 percent.

In Japan, government bonds were mixed, with two-year issues 2 basis points higher to 0.745 percent but ten-year bonds dropping 0.5 basis points to 1.720 percent amid speculation that the Bank of Japan could raise interest rates by March 2007.

October 31, 2006

Consumer confidence figures hurt Wall Street

Permalink: Consumer confidence figures hurt Wall Street

Filed under: Equities, Economy, US

Wall Street was flat to slightly lower at mid-session on Tuesday on new data showing that US consumer confidence dropped to 105.4 in October, down from a revised reading of 105.9 in September. The Dow Jones Industrial Average was 0.3 percent lower to 12,048.71, while the Nasdaq Composite was virtually flat after losing only 0.06 points to 2,363.71 and the S&P 500 fell 0.28 percent to 1,374.1.

In the tobacco sector, Altria fell 0.3 percent to $81.43 on the day that its Philip Morris division argues in front of the US Supreme Court in appeal to an $80 million verdict against it in an Oregon case.

Marathon Oil dropped 2.1 percent to $83.49 on profit taking even though it reported that profits were significantly higher in the quarter.

A UBS downgrade to “neutral” sent Verizon 2.6 percent lower to $36.66.

Proctor and Gamble dropped 0.9 percent to $63.21 even though profits were better than expected on improved margins and better sales in its Gillette unit.

Among gainers on the day was DaimlerChrysler, which added 4.1 percent to $57.33 on reports that it could sell its Chrysler division.

Celgene added 6.1 percent to $52.88 after an announcement Monday evening from Standard & Poor’s that the biotechnology company will replace AmSouth Bancorp on the S&P 500 after trade closes at the end of the week.

UK tobacco sector in gains

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Filed under: Equities, Economy, UK

The London equities markets were higher on Tuesday, but barely so, with the FTSE 100 adding a bare 0.04 percent to 6,129.2 and the FTSE 250 ending the session 0.6 percent higher to 10,372.2.

Friends Provident helped the 100 with its 6.7 percent gain to 207p after its third quarter report did better than had been anticipated. The life assurer also revealed plans to increase it’s market share.

BSkyB was also higher, adding 1.1 percent to 543½p on positive comments from Cazenove.

In the pharmaceuticals sector, Shire was 1.7 percent higher to 956½p on the possibility that it could renegotiate a profit-sharing agreement on a new attention deficit hyperactivity disorder treatment, NRP 104. The current agreement, with US company New River Pharmaceuticals, could give as much as 67 percent of the profits to the US firm. Credit Suisse, however, thinks that they agreement will change before the new drug goes on sale in the US early next year.

In the tobacco sector Imperial Tobacco, which said it is still looking for acquisitions, was 1 percent higher to £18.57. Gallaher, the maker of Benson & Hedges and Silk Cut cigarettes, added 1.5 percent to 890p on the hope that Imperial might bid, although most analysts see an offer for Altadis of Spain as more likely.

Shares in water companies were lower on the sessioni. Kelda Group was 1 percent lower to 866p, while Severn Trent dropped 1.6 percent to £13.96.

Banks decline in Europe

Permalink: Banks decline in Europe

Filed under: Equities, Economy, Europe

In Europe on Tuesday, the FTSE Eurofirst 300 dropped 0.6 percent to 1,444.16 as banks saw losses.

UBS dropped 5.1 percent to SFr74.30 after it said it saw net profits drop by 21 percent in the third quarter. It still insisted, however, that sentiment has improved and it will fulfill expectations for full-year profits. Credit Suisse was also lower, falling 1.3 percent to SFr75.

Also down on its quarterly report was Sanofi-Aventis. The pharmaceuticals company dropped 2.8 percent to €66.60 on the news that profits fell 11.6 in the third quarter, about as much as had been expected.

Things were better in the automobile manufacturing sector. DaimlerChrysler added 3.1 percent to €44.70 after a German publication reported that a spin-off of the Chrysler unit was not being ruled out by the carmaker, a rumor that not all analysts were buying. Elsewhere in the sector, Fiat was 1.1 percent higher to €13.84 and Renault gained 1.2 percent to €91.65.

European insurers were also higher after a positive third-quarter report sent Friends Provident up 6.7 percent in the UK. Generali added 1.4 percent to €31.09, while CNP Assurances was up 1.7 percent to €82.45.

In the construction sector, Spanish builder Ferrovial was 5.1 percent higher to €72.40 on the announcement that its toll roads unit had acquired a road in Chile.

Mixed results on Tokyo markets

Permalink: Mixed results on Tokyo markets

Filed under: Equities, Economy, Asia, Japan

Mixed results on Tokyo markets

Tokyo’s equities markets were mixed on Tuesday, with the Nikkei 225 0.3 percent higher to 16,399.39 but the Topix index dropping 0.2 percent to 1,617.42 on the session.

The banking sector was 1.2 percent lower as a whole as the possibility of interest rates going up again has declined amid domestic economic data which hasn’t lived up to expectations. Meanwhile, the consumer finance sector saw another round of declines after some companies reduced their earnings estimates for the first half of the year. Aiful declined 1 percent to ¥4,040, while Acom dropped 2 percent to ¥4,500 and Promise ended 3 percent lower to ¥4,230. Sanyo Shinpan Finance fell 5.9 percent to ¥4,470.

The telecommunications sector did little better. Softbank dropped 2.9 percent to ¥2,560 after it became known that Japan’s Fair Trade Commission is concerned about the company’s new pricing plan. The news that Softbank lost around 20,000 customers in the first five days of number portability also contributed to its decline. NTT DoCoMo fell 1.1 percent to ¥179,000, also on a decline in the number of its customers. KDDI, on the other hand, added 0.3 percent to ¥729,000 on a gain of tens of thousands of customers.

An upgraded target share price from Deutsche Bank sent property developer Tokyo Tatemono 1.9 percent higher to ¥1,396.

Crude oil prices down on doubts about OPEC cuts

Permalink: Crude oil prices down on doubts about OPEC cuts

Filed under: Commodities, Oil, Metals, Economy

Crude oil prices were down again on Tuesday, although the declines were not as pronounced as the 4 percent drop on Monday. Part of the price declines came as analysts and traders continue to doubt that the OPEC production cuts slated to be implemented beginning Wednesday will actually materialize. So far, only Saudi Arabia and the United Arab Emirates have informed customers that cuts are coming. Worries of a slowdown in economic growth in the United States also helped send prices lower.

Brent crude for December delivery dropped 88 cents to $57.80 per barrel in late trade in London, while December contracts for West Texas Intermediate crude were $1 lower to $57.36 per barrel by early afternoon in New York. Prices for gasoline and heating oil were also lower. Nymex November unleaded gasoline fell 5.75 cents to $1.3980 per gallon, while Nymex November heating oil dropped 2.3 cents to $1.5785.

In the metals markets on Tuesday, Zinc hit another record high, hitting $4,300 per tonne during the session after London Metal Exchange inventories fell again. Analysts have predicted that the price of zinc could reach $5,000 per tonne by the end of the year. Three-month lead was trading at $1,630 per tonne at one point during the day, while copper added $25 to $7,395 per tonne. The price of aluminium, however, was $19 lower to $2,789 per tonne.

October 30, 2006

London markets lower on session

Permalink: London markets lower on session

Filed under: Equities, Economy, UK

The London equities markets were lower on Monday, with the FTSE 100 dropping 0.5 percent to 6,126.8 and the FTSE 250 falling 0.4 percent to 10,308.6.

In the pharmaceuticals sector, Shire dropped 2.8 percent on the session to 940p on profit-taking. Shire is up 45 percent on the year so far.

Wolfson Microelectronics dropped 3.9 percent to 292¼p after McCall, Aitken, McKenzie, a new broker, advised its clients to sell after Wolfson’s rally last week. Elsewhere in the semiconductors sector, ARM Holdings fell 3.5 percent to 109p in anticipation of its third quarter report, due later in the day.

Insurers were higher. Aviva added 0.2 percent to 771p and Prudential, which rebuffed an Aviva bid earlier in the year, gained 1.7 percent to 641p on analyst sentiment that it remains vulnerable to a bid after recent weak data. Many believe that Aviva is still interested. Elsewhere, Standard Life gained 1.6 percent to 287½p on media reports that Axa of France could be interested in bidding for the life assurer, even though analysts were not convinced.

Hanson added 2.3 percent to 727½p on ABN Amro’s repeat of its “buy” rating and £10.60 target share price. The building materials group had dropped 4.4 percent on Friday.

Oil sector lower in Europe on price declines

Permalink: Oil sector lower in Europe on price declines

Filed under: Equities, Economy, Europe

Declines in the oil and automobile manufacturing sectors sent the FTSE Eurofirst 300 0.3 percent lower on Monday to 1,445.8. Carmakers were lower on profit taking, while oil stocks dropped on falling crude oil prices.

In the automobile manufacturing sector, BMW dropped 1.2 percent to €44.64 and Fiat declined 1.3 percent to €13.68. Peugeot was 1.5 percent lower to €44.33 after it cut full-year estimates after reports showed sales down in the first nine months of the year. Volkswagen fell 1.7 percent to €77.40 on mixed reviews from brokers. West LB reduced its recommendation from “hold” to “reduce”, but Goldman Sachs, UBS, and Deutsche Bank all raised VW’s target share price.

Declining oil prices sent Spanish company Cepsa down 1.3 percent to €60.90. Statoil was 2.2 percent lower to NKr165.25 even though it exceeded expectations in its third quarter report on previously high prices for crude. Neste Oil dropped 2.3 percent to €24.81, while Norsk Hydro’s lower than anticipated report on third-quarter profit sent its shares 2.8 percent lower to NKr148.75.

Elsewhere, banks were also lower on the session. Erste Bank of Austria did better than the rest of the sector, losing only 0.2 percent to €53.80 on a report of net profits up by 16 percent in the third quarter, which was just lower than had been expected. Trading income was down by 22 percent. ABN Amro also dropped 0.2 percent, to €22.95, after it said its net profit dropped by 5.6 percent in the quarter. Raiffeisen International dropped 0.7 percent to €89.60.

Sell-offs send crude oil prices lower

Permalink: Sell-offs send crude oil prices lower

Filed under: Commodities, Oil, Metals, Economy

Crude oil prices were down sharply on Monday as investment funds got rid of their exposure to the sector ahead of Organization of Petroleum Exporting Countries production cuts, due to go into effect on November 1. More than 52,000 contracts were sold, according to the Commodity Futures Tradning commission, as speculators divested themselves of long positions, which bet that prices will go higher, indicating that they do not believe the OPEC cuts will have any real effect on prices.

Brent crude December contracts were $2.03 lower to $59.05 per barrel by late afternoon in London, while West Texas Intermediate crude for December delivery fell $1.97 to $58.78 on the New York Mercantile Exchange by early afternoon.

In the metals market, gold added $8 by late in the day in London, to $606.20/$607.20 per troy ounce after hitting $610 per troy ounce earlier. Among base metals, zinc managed a new record high, trading at $4,190 per tonne on the London Metal Exchange after inventories in LME warehouses dropped 1,850 tonnes during the day to 108,950 tonnes, about four day’s global consumption. At the end of last year, inventories stood at 400,000 tonnes. Aluminium reached its highest price in five months when it climbed to $2,834 per tonne, while lead traded around its record high of $1,600 per tonne. Copper, meanwhile, fell $100 to $7,372 per tonne.

US dollar mixed on growth figures

Permalink: US dollar mixed on growth figures

Filed under: Forex, USD, GBP, Euro, Economy, Yen

Sterling strengthened on Monday after new data showed that house prices in the UK rose at their fastest rate in two years in October and mortgage approvals were at their highest in two and a half years in September. Both reports appeared to indicate that the Bank of England will raise interest rates again when its monetary policy committee meets next week.

By the middle of the afternoon in New York, the UK currency was 0.2 percent higher against the US dollar to $1.9020, while it had added 0.5 percent to £0.6680 versus the euro, its highest level in a year and a quarter.

The US dollar, meanwhile, didn’t seem to know where to go as it gained 0.2 percent to $1.2715 versus the euro but dropped 0.1 percent to ¥117.40 in relation to the Japanese yen. This followed a decline by the greenback on Friday on the news that the US economy had not grown as much as had been hoped.

The yen added 0.3 percent to ¥149.30 against the euro as most analysts expected the Bank of Japan to hold interest rates at the current level of 0.25 percent when it meets on Tuesday. The yen was also helped by the news that the Swiss National Bank has added more yen to its foreign exchange reserves.

In Brazil, the reelection of Luiz Inacio Lula da Silva as president sent the real 0.3 percent lower to R$2.1340 to the US dollar.

Federal Reserve official warns on inflation, interest rates

Permalink: Federal Reserve official warns on inflation, interest rates

Filed under: Bonds, Economy, US, Europe, UK, Japan

US Treasury bonds saw prices drop and yields rise after Jeffrey Lacker, the president of the Richmond, Virginia Federal Reserve bank made comments indicating that interest rate hikes were not out of the question, that there was still pressure toward inflation, and that the economy could be tightened further. Mr. Lacker was the only one to vote for a hike in rates at the Fed’s last meeting.

Elsewhere, new data showed US personal income 0.5 percent higher in September, more than had been anticipated, while personal consumption was up less than had been predicted at only a 0.1 percent rise in September. However, the PCE price index was up 2.4 percent year-on-year, more than the 2 percent gain that some Fed officials have said was the high end of the acceptable range.

At late morning in New York the two-year Treasury bond was 1.2 basis points higher to 4.767 percent, while ten-year bonds were up 0.6 basis points to a yield of 4.683 percent.

In the Eurozone, yields were mixed after sell-offs in the US bond market and slow demand for a new auction of government bonds in Italy. The two-year Schatz added 1 basis point to yield 3.723 percent, but the ten-year Bund lost 1.6 basis points to 3.789 percent.

Meanwhile, in the UK, gilts were mixed as well on strong date from the housing market. Two-year gilts added 5.9 basis points to 4.088 percent. Ten-year gilts, on the other hand, dropped 3.6 basis points to 4.564 percent.

In Japan, the ten-year government bond was 1 basis point lower to a yield of 1.730 percent after the Nikkei index dropped 1.9 percent ahead of the Bank of Japan’s latest summary of prices and the economy, published every six months and due on Tuesday.

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