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FinNews for the week ending July 6, 2012 Top Stories In an attempt to boost the eurozone economy, the European Central Bank cut its key interest rate to 0.75 percent, a record low. In addition, the Central Bank plans to set up a single banking supervisor who will keep bank bailouts from bankrupting countries. This supervisor will also make it easier for countries seeking bailout assistance to gain it. (1) Spain's 10-year debt ended Friday with an almost 7 percent yield, widely-regarded as unsustainable. It briefly rose above 7 percent, prompting many to forecast Spain following Greece, Ireland, and Portugal in seeking a sovereign bailout. (2) Economic Releases & Statistics U.S. construction spending saw a 0.9 percent gain in May to a seasonally adjusted annual $830 billion, the largest increase since December. Residential construction grew 3 percent to an annual $261.3 billion. (3) Manufacturing fell to 49.7 in June, down from 53.5, the first fall in three years. Ratings below 50 denote contraction within the market. The index for new orders dropped to 47.8, down from 60.1, the largest monthly decline in the last ten years. (4) Non-manufacturing fell to 52.1 in May, down from 53.7, surpassing expectations for a fall to 53. June's non-manufacturing is the lowest reading since January 2010. The employment index rose to 52.3 from May's 50.8. (5) The unemployment rate remains unchanged at 8.2 percent. June's Employment Situation showed non-farm employment grew by 80,000. (6) The following is a paid third-party advertisement:  Stocks & Earnings Yahoo Inc. is considering Hulu CEO Jason Kilar for its own CEO position, alongside Yahoo's interim CEO Ross Levinsohn and several unnamed candidates. (7) After a single day in office, Bill Johnson resigned as CEO of Duke Energy. He is leaving with $44.4 million in exit payments. He will be replaced by former Duke CEO Jim Rogers. (8) Global Currencies Following Friday's Employment Situation, the euro fell 1 percent against the dollar reaching $1.2264, a low unsurpassed since July 1, 2010. The euro fell 1.2 percent against the yen at 97.76 yen. The Australian dollar was down 1 percent against the U.S. dollar, reaching US$1.0180. (9) Meanwhile, sterling strongly rose against the euro, reaching a 3 and a half year high; the euro dropped to 79.615 pence. (10) Oil & Energies Natural gas storage grew 39 billion cubic feet to 3.102 trillion cubic feet, just shy of forecasts for a 41 to 45 bcf gain. (11) Crude oil supplies fell 1.1 percent, 4.3 million barrels, to 382.9 million barrels, more than double estimates for a 2 million barrel decrease. Distillates fell 1.1 million barrels to 117.8 million, countering forecasts for a 500,000 barrel rise. Gasoline storage grew 0.1 percent, 200,000 barrels, to 205 million, versus expectations for no change. (12) Argentinean YPF SA raised gasoline prices by 7 percent, the first rise since the company's nationalization. (13) Grains & Field Crops Suffering from a continued streak of dry and hot weather, corn and soybean crops along the Corn Belt faced an 8 percent decline in conditions. Corn in good or excellent condition fell to 48 percent, down from 56 last week. Soybeans in good to excellent condition fell to 45 percent from 53. Fortunately, 71 percent of wheat is in good or excellent condition, with only 5 percent in poor or very poor condition. (14) Brazil's corn harvest is forecast to produce 69.5 million metric tons, up from an earlier estimate of 67.8 million and higher than last year's 57.4 million. The nation's soybean forecast lies at 66.4 million tons, down from last year's 75.3 million. (15) Argentinian Molino Canuelas SA and Chinese Chongqing Grain Group Co Ltd are currently discussing $10 million in joint investments in a soybean farm and dairy farms in Argentina. A planned 10,000-hectare soybean farm will annually output 30,000+ metric tons of soybeans, which will be shipped to China. Chongqing Grain Group Co Ltd also plans to invest $1.2 billion in Argentina to grow corn, cotton, and soybeans. Agreements splitting 50-50 between the two companies are expected within the year. (16) The following is a paid third-party advertisement:  Precious Metals Though China's gold output has rose 6.59 percent to 140.7 tons this year, there is speculation that over time the nation's continued output pace could be slowly declining. (17) Over the last four weeks, South African platinum mines have been closing due to the platinum downturn. (18) Other Commodities Due to rain in Brazil, the nation's coffee harvest is forecast to be large but sub-record and its higher-quality beans will be smaller than anticipated. (19) Rains have also slowed its sugar cane harvest, possibly cutting yield potential and driving up prices. (20) A developing El Niño weather pattern could prompt higher cocoa prices. (21) Ivory Coast announced it will resume coupon payments on its $2.3 billion in defaulted Eurobonds, some of which were missed due to political upheaval. (22) The Ghana Cocoa Board announced the commencement of purchases on July 13 for the nation's 2012 light crop cocoa season. (23) India's cotton output is forecast to fall 7 percent to 5.4 million tons in 2012-13, versus 5.9 million tons in the 2011-12 period. Falling prices will cause a 10 percent reduction in cotton area, to 11 million hectares. (24) Next Week:
1. http://www.sfgate.com/news/article/European-Central-Bank-cuts-rates-to-new-low-3685254.php 3. http://www.foxnews.com/us/2012/07/02/us-construction-spending-rose-0-percent-in-may/ 4. http://www.usatoday.com/money/story/2012-07-02/economic-reports-july-2/55978352/1 5. http://www.nasdaq.com/article/us-non-manufacturing-sector-slows-in-june-20120705-00607 6. http://www.chicagotribune.com/business/breaking/chi-june-unemployment-20120706,0,2147921.story 7. http://online.wsj.com/article/SB10001424052702303962304577509271591146112.html?mod=googlenews_wsj 9. http://in.reuters.com/article/2012/07/06/markets-forex-idINL2E8I68YV20120706 10. http://in.reuters.com/article/2012/07/06/markets-sterling-update-idINL6E8I640X20120706 11. http://www.huffingtonpost.com/huff-wires/20120706/us-natural-gas-storage/ 14. http://seekingalpha.com/article/698211-crop-progress-corn-crop-at-alarming-conditions 15. http://www.bloomberg.com/news/2012-07-05/brazil-corn-forecast-raised-to-69-5-million-tons-conab.html 16. http://www.chinadaily.com.cn/business/2012-06/30/content_15538528.htm 17. http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=154570&sn=Detail&pid=102055 18. http://blogs.wsj.com/source/2012/07/04/platinum-miners-under-pressure/ 19. http://www.timeslive.co.za/lifestyle/2012/07/05/brazil-s-gourmet-coffee-ambitions-sodden-by-rains 21. http://www.agrimoney.com/news/weather-fears-gather-over-cocoa-output-too--4729.html 22. http://www.businessweek.com/news/2012-07-06/ivory-coast-plans-eurobond-reimbursement-proposal 23. http://www.ghanabusinessnews.com/ghanas-2012-cocoa-season-opens-july-13/ _______________________________________________________________________________________ Disclaimer: Trading and investing involve a substantial degree of a risk of loss and are not suitable for everyone. Past performance is not indicative of future results. Fundamental factors, seasonal and weather trends, daily news, and other current events may have already been factored into the markets. Some trading strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading. The publisher, and/or its affiliates, staff or anyone associated with FinNews, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise). Information provided is compiled by sources believed to be reliable. Financial Media Corp, and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled. Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of the publisher. This email contains third-party advertisements for a product or service that is not offered, recommended or endorsed by the publisher and neither the company nor its affiliates bear responsibility or control over the content of the advertisement and the product or service offered. Proceed at your own risk. |
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