Gold advanced for the first time in three days as the smallest gain in U.S inflation in five months bolstered expectations that Federal Reserve policy makers meeting today will delay curbing stimulus measures.
Consumer prices increased 1.2 percent in the 12 months through September, the lowest since April, a government report showed today. U.S. central bankers are set to maintain $85 billion in monthly bond purchases until March, a Bloomberg News survey of economists on Oct. 17-18 showed. Bullion rose 70 percent from December 2008 to June 2011 as the Fed pumped more than $2 trillion into the financial system.
The post Gold Rises on Fed No Taper Expectation appeared first on MarketPulse.
West Texas Intermediate crude decreased, extending a second monthly loss, after a government report showed that U.S. inventories surged to a four-month high.
Futures fell after the Energy Information Administration said stockpiles rose 4.09 million barrels to 383.9 million last week. A 2.4 million-barrel gain was projected in a Bloomberg survey. The EIA, the Energy Department’s statistical arm, said supplies at Cushing, Oklahoma, the delivery point for WTI traded in New York, increased 2.18 million barrels to 35.5 million, a two-month high.
WTI for December delivery declined $1.17, or 1.2 percent, to $97.03 a barrel at 10:37 a.m. on the New York Mercantile Exchange. The contract traded at $97.15 before the release of the report at 10:30 a.m. in Washington. The volume of all futures traded was 25 percent lower than the 100-day average. Prices are down 5.2 percent this month after losing 4.9 percent in September.
Brent for December settlement rose 15 cents to $109.16 a barrel on the London-based ICE Futures Europe exchange. Volume was 21 percent below the 100-day average. The European benchmark traded at an $12.13 premium to WTI, up from $10.81 yesterday.
Crude supplies gained 7.9 percent in the six weeks ended Oct. 25. The U.S. will account for about 21 percent of global oil demand this year, almost double the estimate for China, the second-largest consumer, according to forecasts from the International Energy Agency in Paris.
The post Oil Falls With Inventory Climb appeared first on MarketPulse.
Central banks should be independent in setting monetary policy but they should also be tasked with monitoring financial market stability under political supervision, the International Monetary Fund’s (IMF) chief economist said.
Olivier Blanchard also told Handelsblatt newspaper’s Friday edition that Germany should take on a stronger role in Europe and needed to invest more rather than focus on saving.
“If there is one lesson to be learned from the crisis, it must be: it’s not enough to keep an eye on monetary stability. We must also look at the stability of the financial system,” Blanchard was quoted as saying.
“(Central bank) independence should be tiered. Classical monetary policy must remain independent. The control of the financial markets by the central bank, however, should be put under some kind of political supervision.”
The post IMF Says Central Banks Should be Independent With Banking Oversight appeared first on MarketPulse.
Asia’s economies face sluggish growth and high macro risks, weakened by the influx of easy money and China’s slowing growth, according to Nomura.
“Asia overall has become addicted to easy money, and this has weakened economic fundamentals,” said Rob Subbaraman, chief economist for Asia ex-Japan at Nomura, in a note. “As a consequence – and quite pervasively across the region – there has been a rapid build-up of private domestic credit, frothy property markets, slowing productivity growth and a sizable shrinkage in current account surpluses (turning to deficits in India, Indonesia and Hong Kong).
In addition, the quantitative-easing fueled capital inflows have reduced the market discipline to pursue structural reforms, he added.
The post Nomura Warns Asia Still At Risk From QE appeared first on MarketPulse.
Oil prices declined by mid-morning in New York after Libya announced it would halt further military actions against anti-Gaddafi protesters. The move came after the UN passed a resolution giving the Security Council authorization to impose a “no-fly zone” giving the UN authority to take military action to protect citizens.
Brent crude prices rose to a high of $117.29 shortly after the UN announcement as traders feared this could lead to wider conflict and could jeopardize the flow of oil in the region. However, after Libya said it would order its military to stand down and the threat of increased fighting eased, crude prices began to tumble.
Despite Libya’s announcement, the situation is far from resolved and tensions in the country remain high. Concern also remains elevated in Bahrain where thousands of demonstrators fought with government forces in the heart of the financial district.
Markets were buoyed this morning on news that European governments were prepared to provide a package of incentives to help ease the financial crisis threatening to take down yet another European country. Insiders say the plan under consideration for Portugal includes up to 60 billion euros ($78 billion) in debt buybacks and low interest loans.
German Chancellor Angela Merkel has also stated her country’s intentions to support Portugal saying “we will do whatever is necessary and everything will be discussed step by step,” Merkel told reporters today in Berlin. “Germany will do whatever is necessary so that the euro remains stable.”
The amount of new public sector borrowing hit a fresh record high in November, according to the Office for National Statistics (ONS).
Net borrowing totalled £23.3bn last month, up from £17.4bn a year ago, and more than analysts had expected.
The borrowing figure was pushed higher by increased spending on health, defence and the EU.
The latest figures are likely to raise concerns about the government’s efforts to reduce the UK’s budget deficit.
While the government spent 10.8% more in November than the same month last year, its VAT receipts fell 0.1%.
A Treasury spokesman said: “November’s borrowing figures show why the government has had to take decisive action to take Britain out of the financial danger zone.
“These outturns are also in line with the Office of Budget Responsibility’s latest forecast for borrowing to fall by almost £10bn this year compared to last, and for tax receipts to increase by over 7% year-on-year.”
The ONS said public sector net debt now stood at 58% of UK GDP.
German chancellor Angela Merkel is refusing to back down from her push to force private investors to share the burden of the euro debt crisis, which helped send Irish borrowing costs to record levels.
Speaking in Seoul, where she is attending the G20 summit, Dr Merkel acknowledged her demands have upset the markets but insisted it was unfair for taxpayers to be saddled alone with the cost of sovereign rescues. “Let me put it simply: in this regard there may be a contradiction between the interests of the financial world and the interests of the political world,” Dr Merkel said.
“We cannot keep constantly explaining to our voters and our citizens why the taxpayer should bear the cost of certain risks and not those people who have earned a lot of money from taking those risks.”
The Irish Times
Investors shied away from the US dollar sparking a 0.8 percent decrease to $1.3876 per euro at 8:38 a.m. in New York, from $1.3769 yesterday. The decline marked the end of three straight days of gains as markets considered the potential impact of the Federal Reserve buying Treasuries and other assets to increase liquidity in the financial system.
The number of new claims for unemployment benefits fell to a three-month low of 434,000 for the week ending October 23rd. This is the lowest level of new claims in three months while the total number of people receiving unemployment benefits fell to a two-year low.
“Certainly these are encouraging numbers,” said Brian Jones, an economist at Societe Generale SA in New York, who forecast claims would drop to 430,000. At the same time, he said, “given other labor-market readings you want to be hesitant about saying we’ve turned the corner.”