During the period 18-23 December both S&P 500 index and gold moved in relatively close harmony at average correlation of 0.72. Nevertheless, on weekly basis relationship was downward sloping and on Friday correlation coefficient reached 0.68. Possible explanation for downward trend could be fluctuations in S&P 500 index amid constantly decreasing price of gold until last workday. On Friday, both
Despite early rally in Friday morning the S&P 500 Index added only 0.32% or 3.91 points and closed modestly higher at 1,219.65. On weekly basis, however, the US benchmark lost 2.8%. Three of the 10 industries including consumer staples, utilities and health care declined while others were up. The biggest gainers were material, industrial and energy companies as several US
On Monday Olympus Corp. Japanese producer of medical equipment and cameras experienced a sharp decline in share price after country media inclined cash troubles. Japan's prosecutors are going to search Olympus headquarters this week. Olympus Corp. stocks lost 7.4% on Monday morning session. Olympus also revealed to lenders that its cash reserves may expire by 2015.
US Treasuries appreciated touching 6-week record high as fading optimist about European officials' ability to solve debt crisis boosted demand for safer assets. Benchmark 10-year borrowing costs hit 2-month low on Friday after Fitch lowered France's credit outlook and placed 6 other nations including Italy and Spain for revisit of downgrade. 10-year yields dropped 10 b.p. or 0.21 p. p. to 1.85%.
Lonnie depreciated on Friday, extending its five consecutive day drop, biggest in 6 weeks on investor speculation that Europe is not doing very well on taming its debt crisis. Canadian dollar lost 0.3% to C$1.0380 on Friday evening trade. Loonie's weekly depreciation reached 2.1%. Currently USD/CAD is trading at C$1.0380.
European security markets traded lower in Monday morning session amid announcement that North Korean leader Kim Jong-il died and Fitch ratings lowered France's credit outlook. Stoxx Europe 600 index lost 0.3% at 233.01, whereas German DAX 30 index dropped 0.2% reaching 5,691.78. French CAC 40 index declined 0.5% at 2,956.82 and FTSE 100 index edged down 0.4% at 5,366.11.
Mario Draghi, ECB president curbed expectations that common central bank will intensify bond purchases to resolve debt turmoil. Mario Draghi continues to repeat that ECB must operate within its legal foundations and ECB's mandate does not accept proposed type of intervention. However, ECB will work on behalf of EFSF, which has been authorized to interfere in debt markets.
Australian sovereign bills appreciated on Monday, driving the borrowing costs for 10-year notes and reaching record low on increasing concern, Europe will face many difficulties to overcome debt crisis. Yields for 10-year bonds lost 7 b.p., or 0.07 p.p. reaching 3.718% in Sydney morning trade.
The Australian national currency dropped against 15 out of its 16 main peers ahead of Reserve Bank's meeting minutes. Both Aussie and Kiwi also experienced downward pressure from concerns over Europe and North Korea's leader Kim Jong-il's death. Australian Dollar lost 0.7%, reaching $0.9911 while its New Zealand's counterpart fell 0.5% to $0.7579. AUD/USD currently is trading at $0.9941 while NZD/USD is trading at $0.7603.
Today European officials are holding a meeting to discuss additional funding valued at 200 bn euros ($261 billion) through IMF as well as consider mechanisms for implementing fiscal tightening. The main goal of conference is to meet a self-forced deadline for providing extra aid for debt woe. Nevertheless, analysts are cautions regarding effects the meeting will have on markets as there is too much uncertainty.
Fitch ratings lowered France's national credit outlook and put Italy, Spain, Slovenia, Belgium, Cyprus and Ireland on a review for downgrading due February. Fitch agency's move stimulates pressure on euro zone's officials to solve the 2-year debt turmoil. The main concern is lack of credible financial backing, said Fitch in its statement.
Moody's Investors Service lowered Belgium's credit rating two steps down on growing concerns that increasing borrowing costs, slackening growth and obligations from Dexia SA's breakup can expand the euro region's fifth largest debt burden. Moody's cut Belgium's sovereign debt rating from Aa1 to Aa3 indicating negative outlook.
US major stocks indexes traded mixed on Friday as Italy approved austerity measures while Fitch threatened to downgrade six national debt ratings. Dow Jones Industrial Average was almost flat trading 0.02% or 2.42 points down, finishing at 11,866.39, S&P 500 added 0.32% or 3.89 points reaching 1,219.65 and Nasdaq Composite gained 0.6% or 14.32 points closing at 2,555.33.
On Saturday Kim Jong-il the leader of North Korea passed away after a heart-attack, confirmed state-managed media Kim Jong-il was 69. The Asian stocks markets reacted sharply and extended loss on Monday while US Dollar boosted gains against South Korean domestic currency. Kim Jong-un, the leader's son is predicted to substitute his father into power.
Asian markets experienced a sharp decline on Monday, extending Friday losses on announcement about Kim Jong-il, North Korean leader's death. Hong Kong's Hang Seng Index lost 2.5%, Shanghai Composite dropped 2.6%, while South Korea's Kospi fell 4.1%. Japan's Nikkei Stock Average closed down 1.4% and Australia's S&P/ASX 200 index gave up 2.4%.
Canadian currency climbed against greenback for a second day in a row as US manufacturing report showed that factory output in Philadelphia and New York regions expanded at faster pace than predicted signaling recovery for the economy. Canadian dollar gained 0.2% against its US peer to C$1.0332. Currently USD/CAD is trading at C$1.0347.
Italian and Spanish note gained on Friday after PM Monti's government won a confidence ballot and Spain managed to sell almost twice as much debt as it planned. 2-year Spanish borrowing costs fell 52 b.p. or 0.52 p.p. Yields for 2-year Italian notes lost 48 b.p. reaching 5.06%. Dutch and German two-year borrowing costs hit euro-era record low as part of investors remained worried the European crisis will
Foreign investments in Canada increased less than expected, according to official data. Purchases of Canadian securities by foreign investors edged up to 2.03B in November on a seasonally adjusted basis as compared to 7.35B last month. Experts predicted the indicator to increase to 8.23 in November.
In November US consumer price level was flat, mainly due to dropping energy costs, said the Labor Department on Friday. Core prices excluding energy and food costs added 0.2%. The real readings mostly match with analysts' expectations. Inflation adjusted hourly salary declined 0.1%. Unadjusted Consumer prices rose 3.4% on yearly basis.
US stock index futures gained on Friday as investors mostly ignored Fitch downgrades for several key banks and kept waiting for US inflation data. Futures on Standard & Poor's 500 jumped 7.20 points reaching 1,218.9, while those on Dow Jones Industrial Average added 48 points attaining 11,870. Nasdaq 100 futures climbed 12.25 points at 2,235.5.
US stock index futures gained on Friday as investors mostly ignored Fitch downgrades for several key banks and kept waiting for US inflation data. Futures on Standard & Poor's 500 jumped 7.20 points reaching 1,218.9, while those on Dow Jones Industrial Average added 48 points attaining 11,870. Nasdaq 100 futures climbed 12.25 points at 2,235.5.
Indian crude oil output is expected to surge 21% to 45.57MT in the next two years as compared to 37.68 MT between 2010 and 2011, reported S Jaipal Reddy, Indian Oil Minister. The increase of the domestic oil output will reduce country's dependency on the foreign supplies. The largest contributor to higher oil production level will be Cairn India that currently produces about 125,000bpd of
The Euro Zone will experience refinancing problems in February, reported Ewald Nowotny, Governing Council member of the ECB. Refinancing eliminating deficit financing will reach about EUR1.3 trillion next year coupled with EUR1 trillion for refinancing of banking industry. It is crucial to work out short-and long-term measures to solve financial difficulties and further fine-tuning in the policies is necessary, he stressed.
Commodity price will be lower in the first two quarters of 2012 but they will increase over rest of the year, reported Bank of America Merrill Lynch. The most-probable scenario Europe will go in moderate downturn but the global GDP will grow by 3.5% pushing the gold prices to about $2000 on increased monetary easing. However, in the worst case the recession in the Euro