Third Round of Quantitative Easing – $10 billion

The Federal Reserve announced on Wednesday, April 30, 2014, that it was going to reduce the amount of securities it purchased every month as a part of its third round of Quantitative Easing by another $10 billion.  This means that over the next month the Fed will only buy $45 billion in securities

Oil spot price set to jump on distillate demand

West Texas Intermediate (WTI) is currently trading at $97.70 a barrel, close to yesterday’s high, with the price supported by speculation that the US Energy Information Administration (EIA) will today report contracted distillate inventories last week as frigid weather continues to grip the world’s largest oil consumer.

The industry-funded American Petroleum Institute (API) yesterday reported that distillate stockpiles fell 1.46 million last week, gasoline inventories dropped 1.18 million barrels and crude oil stocks rose 384,000 barrels.

The EIA is due to announce the official data at 15.30 UTC today and analysts are picking distillate supplies, including heating oil and diesel, to have fallen 2.5 million barrels to 113.7 million last week, with gasoline stockpiles up 1.15 million and crude supplies 2.55 million.

WTI has risen during the past three weeks on weather-driven rising distillate demand and decreasing inventories and US weather forecasters are projecting sub-normal temperatures across most of the contiguous states at least till the 13th of the month. They also foresee heavy winter storms in some states.

Gold Drifts Lower in Quiet Trade

Prices of gold and silver on the European spot market drifted slightly lower in quiet trade Monday as top physical gold-consumer China remained absent from the market.
The metals were expected to hold narrow trading ranges for the session, as China continued Lunar New Year celebrations and the global economic data agenda was quiet.
A key risk event awaits this Friday with the release of the U.S. January employment report and this should keep position-taking contained in terms of size and time frame
Fed policy remains the key global price driver for gold, as the U.S. central bank continues to taper back economic stimulus measures that had kept elevated demand for gold as a hedge against inflationary risks.
Recent turmoil in emerging markets continued to provide a cushion under gold and silver, which are considered safe-haven assets and a traditional store of value in times of risk

Gold falls as investors digest Fed stance

Gold for April delivery, the most actively traded contract, on Friday fell $US2.70, or 0.2 per cent, to settle at $US1,239.80 a troy ounce on the Comex division of the New York Mercantile Exchange.Gold prices recently have also tracked shifting views of the economic turmoil in some emerging markets. Some investors view gold as a safe haven, and futures hit a two-month high last week when investors were cashing out of assets seen as risky amid political and economic troubles in developing markets from Turkey to Brazil.

Euro Mixed Ahead Of PMI Data

Italy's PMI data is due. Thereafter, final PMI reports are due from France, Germany and Eurozone. Final Eurozone manufacturing PMI is expected to match the flash estimate of 53.9 in January.Before these reports, the euro showed mixed trading against other major currencies. While the euro advanced against the pound, it held steady against the rest of major currencies.The euro was quoted at 1.3486 against the greenback, 1.2215 against the franc, 0.8229 against the pound and 137.79 against the yen at 3:40 am.

FG to Sell Stake in Abuja Commodity Exchange

The Federal Government plans to sell its ownership of the Abuja Securities and Commodities Exchange by the middle of the year, after missing an initial deadline, in a plan to revive trading.

“The government wants to privatise the only commodity exchange and it had committed to doing it by the end of last year,” the Director General of the Securities and Exchange Commission (SEC), Arunma Oteh told Bloomberg.

She added: “It didn’t meet that deadline, but it’s planning to do something by the middle of 2014.”

Companies including Nigeria’s Heirs Holdings Limited, a Lagos-based investor with interests across Africa in banking, energy, real estate and agriculture, plan to acquire or set up a commodities exchange in the country.

Companies including Nigeria’s Heirs Holdings Limited, a Lagos-based investor with interests across Africa in banking, energy, real estate and agriculture, plan to acquire or set up a commodities exchange in the country.

Nigeria had Africa’s third-biggest cocoa harvest last year and produces crops such as cotton and sugar. The Abuja bourse was converted from a stock exchange to a commodities market in 2001, according to its website, and it has information on crops traded dated January 2008.

The Chairman, Heirs Holdings, Mr. Tony Elumelu, had said he wants to acquire the state-owned Abuja-based exchange when it is sold. If it’s unable to buy the exchange, Heirs Holdings would apply to the SEC to set one up, he had added.

The company, through its African Exchange Holdings Limited unit, has stakes in Kigali, Rwanda-based and Lagos-based National Association of Securities Dealers trading platform. In collaboration with the Nigerian Grain Reserve Agency and the Agriculture Ministry, Heirs Holdings in November established an electronic warehousing system linking farmers and traders as part of the groundwork to set up a commodities exchange.

“We have a number of both domestic players and international players who are very interested,” Oteh said.

“They’d rather acquire the privatised exchange, so they’re trying to see how far the government is going with this initiative and if not they’re prepared to seek a registration for a new commodity exchange," she added.

Gold and Silver could see another bear market rally

There are no major US economic data releases today or tomorrow. It will be a technical trade with demand from India and China as the key factors. Traders will start to take positions for next week's Federal reserve meeting. Next week’s FOMC meeting is the last meeting for outgoing Federal reserve president Ben Bernanke. Once again the US growth outlook and the US interest rate outlook will be the key.

Key factors which can cause furor in gold and silver markets are (a) FOMC meet (b) Chinese demand in the Chinese New Year of Horse (c) January US nonfarm payrolls.

Indian Rupee Advances To 4-day High Against US Dollar

Indian rupee climbed against the US dollar in morning deals on Tuesday.
The rupee that closed yesterday's deals at 61.54 against the greenback advanced to a 4-day high of 61.425. The rupee may face upside target around the 60.00 area.

#Silver must sell

Silver signalling commencement of downtrend athough it has changed today high INR 44,647/- but sellers can still take or hold their selling positions with proposed stoploss. Downtrend in silver has already begun but clound will disappear completely when silver will trade below INR 44,350/- level.

Silver Bearish Trend

Silver to remain bearish if it trades below INR 44,555/- sellers can hold their selling position if downtrend continues with stoploss of INR 44,870/- but make sure to create fresh positions only if #Silver trades below INR 44,555/- otherwise avoid selling 

Precious Metals Turned Red

Silver after making intraday high of INR 45,600/- slipped to low of  44,805/- (CMP- INR 44,900/-) day trader should avoid this risky trading session or make entry with strict entry & exit levels by following proposed stoploss

Once sizzling emerging markets have turned bearish

Brazil, Russia, India, China — commonly referred to as the BRICs — and throughout Asia wafted upward into the stratosphere, and investors did what they always do: They chased this hot performance.But over the past two years these once-sizzling markets have turned bearish as all get-out. Emerging markets began to buckle in early 2011, and since then U.S. stock market performance has been far superior to these developing markets.

Since early 2011, the Standard & Poor’s 500 index has gained 41 percent, while the MSCI Emerging Market Index has dropped 12 percent. That’s a 53-percentage-point difference — yowzer — and the pain has continued into this year with emerging markets dropping about 5 percent as the S&P 500 is basically flat.

While the U.S. economy moped along at a dilatory pace, economies in these developing nations grew at almost absurd rates. Economic growth in China, for example, rose above 10 percent compared with a 2 percent pace in the U.S.The BRICs were the sexy investment of that period, but a confluence of factors has soured investor appetite for this asset class.First, explosive growth in the developing world brought fear of inflation, which prompted credit tightening and interest rates to rise, especially in China.

The MSCI Emerging Market Index currently sports a stock price-to-earnings ratio — a common measure of valuation — of only 9.7. In contrast the p/e of the S&P 500 is almost double that at 18.8. It’s next to impossible to predict when an asset class has hit rock bottom, but even at these levels it’s probably still too early to dive into the sector.

In addition to higher interest rates, the other issue overhanging emerging markets involves all the new commodity production capability that has come online since 2005. Capital spending on mining capacity, plants and equipment has exploded in these countries, which means the supply of raw materials should be plentiful in the coming years, and that means prices should remain subdued.“It’s hard to envision emerging market stocks reclaiming leadership against this undertow of excess commodity supply,”