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| Asia:Dollar directs gold, crude oil movements |
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| News Source：http://www.jinchemical.com/
; SendDate：2010-10-28 17:21:11 |
CRUDE OIL
Despite steadily rising over the Asian session, crude futures have most recently come under pressure to the downside once again in early trading over Europe. The most active crude contract for December delivery currently trades at $80.83 a barrel after reaching a daily high in $81.37.
Crude prices continue to be tightly correlated to movements in the US dollar, with the slight recovery in the greenback yesterday weighing heavily on the commodity. With the specter of further stimulus measures lingering in the market this morning ahead of the G20 meeting, crude has been able to come off those lows yet still remains fragile on a slight dollar recovery at time of writing. A stronger US dollar makes dollar-denominated commodities like crude more expensive on international markets.
GOLD
Gold fell 1.55% to a two week low on Thursday last week. A drop in initial jobless claims weighed on gold even as the euro rally fizzled out. Barring a big rebound today, bullion is set for its first weekly decline in 12 weeks as the dollar gained strength. U.S. COMEX gold futures for December delivery settled down at $1325.60 in heavy volume, 30% above the daily average. Silver, which outperformed gold earlier in the rally dived more than 3% yesterday
INDICES
U.S stocks rose a second day as earnings at EBay Inc., Freeport- McMoRan Copper & Gold Inc. and McDonald¡¯s Corp. beat analyst estimates, offsetting losses in bank shares. Banking stocks were weak as investors continue to be concerned about losses in the mortgage market and the possibility that Bank of America may have to buy back mortgage bonds. Bank of America fell 3.3% and has lost nearly 16% in the last 7 days
STERLING
The British pound depreciated vis-¨¤-vis the U.S. dollar today as cable tested bids around the US$ 1.5725 level and was capped around the US$ 1.5850 level. The Cameron government made news yesterday when it reported it would slash as many as 500,000 government jobs in a bid to reduce government spending by as much as £8 billion. Bank of England Governor King warned the U.K. economy is facing a ¡°sober¡± decade.
Data released in the U.K. today saw September mortgage approvals print at +44,000. Also, September headline retail sales were off 0.2% m/m and up 0.5% y/y with the ex-auto fuel component up 0.0% m/m and 1.8% y/y. Minutes from the MPC¡¯s October meeting were released this week and they reported ¡°Some of the members felt the likelihood that further monetary stimulus would become necessary in order to meet the inflation target in the medium term had increased in recent months.¡±
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