On Friday, futures for natural gas grew higher in the U.S. morning trading session, as steep Thursday's decrease was greeted by bottom fishers, which pushed prices upwards. On the NYMEX July delivery futures for natural gas were traded at USD2.229 a MMBtu, gaining 1.08% since the beginning of the trading session.
Hours post Chinese central bank's announcement that it has cut the interest rates, China's five major banks have, in contrast, increased the deposit percentage. ICBC as well as other four key banks have fixed the demand deposit rate at 0.44%, which is the ceiling under the new regulations. By loosening the pricing policies, China is attempting to boost the economy whilst at the same
On Friday, stock markets in Europe closed lower on poor German export, Spanish sovereign downgrade. Fitch rating agency significantly decreased Spanish credit rating, German exports slipped 1.7%, compared to an expected 0.7% decline. European trade closed with EURO STOXX 50 0.03% increase, France's CAC 40 declined by 0.66%, and German DAX 30 fell by 0.22%.
As the European crisis continues to progress, the demand for Italian merchandise tumbles both on the domestic as well as the foreign market. Consequently, the production output fell in April by 1.9% and an overall 9.2% from the previous year. Italy entered a recession in Q4 2011 when Mario Monti attempted to resolve the debt crisis by accepting EUR 20 billion of austerity measures.
Fitch Ratings lowered Spain's credit worthiness from A to BBB, citing crisis in banking sector and deepening recession. Fitch estimates that Spanish banking industry may need around USD 126 bn to stabilize its system. Standard & Poor's currently has BBB+ rating on nation. Euro depreciated versus US Dollar to USD 1.2456 on the news.
Dow Jones Industrial Average pared most of morning gains on Thursday and edged slightly higher after Fed's Chairman Ben Bernanke said US economy need to be reviewed before make any decisions about further easing. Blue chip index added 0.37% or 46.17 points and finished at 12,460.96. Financials weighed on the index with Bank of America dropping 2.9% after previous day's
S&P 500 index traded flat on Thursday as gains from China interest rate cut was offset by Fed's unwillingness to propose further easing. US benchmark gave up 0.01% or 0.14 points to 1,314.99. Regions Financial Group gained 2.4% after its stock was upgraded to outperform by Macquarie Group. Pall Corp. sank 4.3%. Filtration and separation products provider reported 3rd-quarter revenue
Japan's Nikkei Stock Average erased previous days sharp gains and plunged on Friday to a 3-week record drop after Federal Reserve damped expectations for easing. Nikkei 225 fell 2.09% or 180.46 points and ended at 8,459.26. Exporters returned to loses after Yen strengthened 0.7% against Euro and Spain was downgraded by Fitch. Sony Corp. and Sharp Corp. each dropped 5.3%.
Gold futures declined on Friday electronic trade after hopes for additional monetary stimulus from Federal Reserve faded. August gold dropped 1.1% or USD 17.70 to USD 1,570.40 per ounce. Copper to be delivered in July shed 1.3% or USD 0.04 to USD 3.33 a pound. Silver futures for July fell 1.8% or USD 0.31 to USD 28.22 an ounce.
US consumer credit rose slower than expected in April. According to a Federal Reserve report, consumer borrowing increased by $6.51billion to $2.551 trillion in March, thus expanding at a 3.1% annual rate. Concerns over deepening Eurozone's debt crisis and slow job creation in the US put under question consumer's willingness to spend.
As petroleum prices fell to its record low in three years, the manufacturing output prices also experienced a decline. According to the Office for National Statistics, the costs of goods have dropped for the first time since December and the price at factory gates plummeted by 0.2% from the month of April. In contrast, economists anticipated a 0.1 percent advance.
Jim Walker, Asianomics' Ltd. chief economist, believes that China's decision to decrease the lending as well as deposit percentage is a sign of a weakening economy and will not help to improve the current economic state. The economist indicates that the situation is more severe than the government initially expected and signifies that the global economy is going to face a slowdown. He added that
Japanese Yen strengthened versus the 17-nation currency on Friday as investors predicted the German exports slumped in April amid worries European debt turmoil is curbing Eurozone's economy. The Yen appreciated 0.7% versus Euro to JPY 99.33 during Asian trading hours. Currently EUR/JPY is trading at JPY 99.15.
Bank of Korea decided to leave its benchmark interest rate unchanged for a 12th consecutive month as slowing inflation gave officials a scope to await for further developments in Europe and China. The board of Central Bank maintained its benchmark at 3.25% in line with analysts expectations.
The price of crude oil declined for a second straight day sending the value closer to longest weekly loss since 1999. The drop was boosted by speculations that slowdown in world's biggest economies US and China may hurt demand for fuel. July Brent oil fell 1.5% or USD 1.49 to USD 98.44 per barrel. July crude lost USD 2.23 to
European equities rose on Thursday after China unexpectedly announced it reduced its benchmark borrowing costs by 25bp. Stoxx 600 Europe gained 1.1%, British FTSE 100 added 1.2% and German DAX improved by 0.8%. French CAC 40 index climbed 0.4% and IBEX 35 advanced 0.3% after Spain successfully sold 10-year bonds..
US shares erased most their daily gains after Fed Chairman Ben Bernake announced the US economy should be reviewed before deciding of additional stimulus. S&P 500 index traded almost flat, slipping 0.01% or 0.14 points to 1,314.99. Dow Jones Industrial Average added 0.37% or 46.17 points and finished at 12,460.96. Nasdaq Composite dropped 0.48% or 13.70 points to 2,831.02.
UK service sector expanded at a steady pace in May, increasing probability that the Bank of England is likely to stick to the current monetary policy. The PMI for the services remained unchanged at 53.3, which means that activity in service sector is growing. Following the positive data, the Sterling appreciated against the Dollar to $ 1.5471 from $ 1.5448.
East European countries are concerned about possible severe turmoil in financial markets in case Greece exits Eurozone, as it might cause depreciation of currencies, tighten credit, as well as hinder export-driven growth. However, central bankers and politicians claim that the countries are more crisis-resistant than they were four years ago, when collapse of Lehman Brothers caused the global financial crisis.
Australian trade deficit dropped to AUD 203 million (USD 201.9 m) in April from a AUD 1.28 bn in March, reported Australia's Bureau of Statistic on Friday. Analysts predicted a slower decline of trading gap to AUD 920 m. Nation's exports in April surged by 3% while imports diminished by 1%.
Japanese economic growth in the first three months of 2012 accelerated at slightly faster pace than predicted. The final estimate was revised upwards from 1.0% to 1.2%. Analysts predicted the gauge to reach 1.1%. The source of increase came from higher private consumption and capital spending.
Japan reported smaller than predicted current account surplus in April, reflecting the negative effect from weakening global demand which is weighing on exports. The nation's current account excess narrowed to 333.8 bn Yen. Economists questioned by Bloomberg expected a drop only to 440.8 bn Yen.
Gold futures fell during electronic trading this Thursday after Ben Bernanke's, U.S. Federal Reserve Chairman, testimony to the Congress. Gold prices for August delivery tumbled $12.10, a 0.7 per cent decrease, to $1,622.10 an ounce in trading session of the New York Mercantile Exchange's Comex division. Silver futures for July delivery slipped 29 cents, a 1 per cent decline, to $29.20 an ounce.
Gold fell on Thursday after unexpected Chinese interest rates cuts, while investors awaited Ben Bernanke's, U.S. Federal Reserve Chairman, testimony to the Congress. Gold futures for August delivery dropped $7.20, a 0.4 per cent decrease, to $1,627 an ounce in trading session of the New York Mercantile Exchange's Comex division.