Daily Market Reviews by MAYZUS.com

[MAYZUS.Neeraj]

08 AUGUST 2013: GBP JUMPS AGAINST USD

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

USD/GBP jumped above 1.55, the highest level seen in weeks, after Bank of England (BOE) yesterday linked unemployment to rate hikes. BOE stated that before unemployment is reduced to 7 %, there would be no hikes in interest rate. Even if most analysts see such a level unlikely before 3 years time, traders interpreted the move as strengthening the Pound.

BOE follows the US Federal Reserve (FED) suit. FED has decided to keep the interest rate steady as long as unemployment stays above 6.5 %. This level has also been seen as a crucial benchmark for any substantial changes in monetary easing. Speculations on when FED will start tapering are fueling the markets with fear. Stock markets both in Europe and the United States fell for the fourth consecutive session. Dow Jones dropped more than 80 points (0.5 %) during the session.

The Dollar, which lost momentum on the presentation of unemployment figures last week, continues to lose ground against most currencies. The Japanese Yen rose to a seven week high, trading at 96.62 Yen against the green back. The DXY index, which weighs the Dollar against a basket of six major currencies, fell 0.4 %. The stronger Yen impacted Nikkei and other stock markets, which suffered heavy losses during the week. Oil prices also fell yesterday with Brent crude dropping below USD 108 a barrel.

President Obama cancelled his upcoming meeting yesterday with President Vladimir Putin, in a display of anger with Russia’s decision to grant the whistle-blower, Edward Snowden, the man the US sees as traitor, permission to stay in Russia. Obama accused Russia for cold war tendencies and repeated grievances over Syria. Saudi Arabia , seen as a close US ally, recently offered Russia to buy USD 15 billion in military aircrafts if Moscow would trade giving up its support for president Assad.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

09 AUGUST 2013: CHINESE TRADE DATA ENCOURAGES

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Chinese trading data in July proved better than expected. Both export and import figures improved and gave stock markets, which declined this week, a firmer ceiling. The US market rose in the first part of the session helped by strong results from Microsoft – up 3 % - and Tesla Motors which jumped 14.2 %. The market turned around and went into red territory for the fourth consecutive day on criminal charges against J.P.Morgan related to its mortgage backed securities. The leading US bank declined 0.8 %.

The Dollar demonstrated new weakness and fell to a seven week low. DXY Dollar index, where USD is weighed against a basket of 6 major currencies, fell 0.5 %. EUR/USD showed new strength and rose 0.4 % to 1.3392. USD/JPY continues to weaken, paying 96.25 Yen to a Dollar which is far off the peak on 103 seen only months ago. “Abeism” - after the new Japanese Premier 'Abe' - meant to spur inflation into a Japanese economy stagnating for decades, has lost momentum with steady declines in the Nikkei stock index.

US jobless numbers registering the number of unemployed requesting unemployment benefits, which surprisingly jumped the last week of June , did not prove any substantial progress starting a new month. This did neither help the mood in the stock market nor the strength of the Euro, but raised new question marks in the ongoing guessing game on when the US Federal Reserve (FED) eventually will start tapering its bond buying program of USD 85 billion monthly.

In Russia, two of the leading oil company players, in letters to President Vladimir Putin, mutually accused each other for wrong business decisions. Both the head of the biggest Russian oil company, Rosneft, Igor Sechin, and the head of the monopoly oil pipe company, Transneft, Vladimir Tokarev, who both are former colleagues of Putin in the intelligence services, accuse each other respectively for excessive pipeline prices and ambitious and expensive oil terminal projects in Nahodka in the Russian far East.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

12 AUGUST 2013: METAL PRICES RISE ON CHINA

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Metals bounced higher on Friday as stronger than expected data came from China, with a copper rally not seen in one year. China reported a pick-up in factory production, investment, and real estate for construction in July, beating expectations. Data and import and export also rose indicating to investors that the Chinese economy is in the process of stabilizing after decelerating in nine of the last ten months.

A series of Chinese policy measures seem to have had a positive effect and reversed an economic slowdown and the fear of hard landing for the Chinese economy. Chinese analysts expect stable growth in the third quarter with a possible acceleration in the fourth quarter. The unexpectedly strong performance is driven mainly by a rebound in the production of steel, cement, power and non-ferrous metals. This underscores that China’s growth remains disproportionately reliant on credit fuelled infrastructure and property construction.

Global stocks remained close to five-year records as a possible Chinese turn around in the second half of 2013 fueled investors optimism, in spite of a week of mixed activity across the world’s biggest financial centers. This optimism fuelled markets in Europe, but failed to translate for long in the US, as investors took profits after continuous records on Wall Street over the last few weeks. The benchmark S&P index fell for the second week after a rise in stocks on 19% since the beginning of 2013.

In Europe the FTSE All World equity index hovered close to its best level since 2006 after especially large global mining companies climbed on the back of the Chinese data. Shanghai and the Australian stock exchanges jumped as well on the data. In currencies, the US Dollar index continued to lose ground on Friday, but gained against the Euro which eased 24 points to USD 1.3354. USD/JPY descended 0.3 % to 96.38. The Dollar is expected to be under downward pressure until the US Federal Reserve (FED) decides on when to start to taper monetary easing.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

13 AUGUST 2013: GOLD SHINES ON STIMULUS WORRIES

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Stocks headed for the fifth fall in six sessions on Monday, as signs of economic recovery pointed towards a cut in economic stimulus and monetary easing tapering. Safe-haven assets such as precious metals and the Swiss Franc, gained. Gold jumped to USD 1342 an ounce, the highest level seen in months, while Silver gained 3 % since the end of last week, trading at USD 21.31 an ounce. EUR/USD continues to descend at 1.3288. USD/JPY is steady at 86.87.

Global stock markets have been tiptoeing in August fearing that economic stimulus, the USD 85 billion monthly bond buying program, may come to a halt in September. Signs that China’s slowdown may run its course and expectations that data this week will prove that the Euro zone is pulling out of its longest recession on record, are bolstering hopes that the global economy is back on track. This most probably means an end to monetary easing.

European stocks quickly lost the momentum created by Monday’s better than expected Chinese data, which gave the Asian markets a boost during the night. The major European indices were down as the futures for the US were down. Both Dow Jones and Nasdaq lost 0.36 % in the opening of Monday’s session. Walt Disney, Boeing and JP Morgan were among the biggest losers. Intel and Alcoa were marginally up.

Nikkei in Japan shed 0.7 % and traded at the lowest level seen since June 28th, after data showed that Japan’s economy grew at a slower-than-expected pace in April-June. This prompted investors to cut their risk exposure. The Japanese Yen has gained 5 % against the Dollar since USD/JPY reached a high of 103 Yen to a Dollar in early spring. The Japanese economy grew 2.6 % in the second quarter, compared with 3.8 % in the first quarter of 2013.

Copper was 0.3 % down after gaining 1.3 %, a three month high, on Friday. Oil prices, which headed up on the presentation of the Chinese data, dipped 0.5 %. Brent crude is trading below USD 108 a barrel. Gold gained for the fourth day in a row when holdings in the world’s biggest Gold exchange-traded fund rose for the first time in two months. The increased volume helped prices, but the fundamentals for Gold are still negative.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

14 AUGUST 2013: GERMAN OPTIMISM FUELS EURO ZONE

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

US Consumer spending rose at its fastest pace in seven months according to figures presented yesterday. The gauge in consumer spending indicates quicker economic growth, and would strengthen the case for the US Federal Reserve (FED) winding down it's USD 85 billion bond monthly bond buying program. Retail sales outside cars, gasoline and building materials rose 0.5 percent in July, in line with expectations. Consumer spending is the biggest driver in the US economy.

A jump in Germany’s economic sentiment survey, dovetailed with a rise in the industrial output in the Euro zone, and the fastest rise in house prices in England in seven years, bolstered renewed optimism also in the European region yesterday. London’s FTSE, Germany’s DAX and the Paris CAC 40 indexes all climbed from 0.3 to 0.8 %, to lift the broad FTSE Eurofirst 300 index to its highest level since mid May. US exchanges were rising on the retail figures yesterday after four losing sessions.

EUR/USD stood at 1.3290 before the release of the US retail figures added to the case for a cut in the Federal Reserve’s (FED) stimulus already in September. The American Dollar is trading higher also in relation to Japanese Yen. USD/JPY is 98.01. Oil prices are up with Brent crude at USD 109.88 a barrel. Gold and Silver stay steady at the last few days higher levels.

A renewed optimism in the Euro zone was yesterday reflected in the debt market. Yields on safe-haven German 10 year government bonds hit their highest level in six weeks. Risk premiums on Italian and Spanish bonds continued to ease. A general improvement In the EU economy seems to have taken place. The question is when positive signs of improvement will eventually take the Euro zone countries out recession and into sustainable economic growth. Gross Domestic (GDP) growth number expected to grow 0.2 % when the last quarterly report is published later on Wednesday.

The Asian market opened Tuesday in strong positive territory, helped by the Chinese data presented on Monday morning. The weaker Yen caused the Nikkei stock exchange to jump 2.6 %. The other Asian bourses were also up. The positive momentum is expected to continue this morning.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

15 AUGUST 2013: US STOCKS DECLINE ON MACY’S SALES

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

The US stock indices fell last night after retailer 'Macy's Inc' quarterly results disappointed. This gave new urgency to investors debates on the timing and pace of reductions in the Federal Reserve’s (FED) bond purchases. The department store operator Macy’s shares fell 4.4 % leading to a loss in S&P. Also Dow Jones and Nasdaq ended in red territory after Macy’s disappointing sales.

In Europe, both France and German economies grew faster than the United States in the second quarter of 2013, pulling the Euro zone out of its longest recession seen in years. The increased pace was primarily driven by renewed business and consumer spending in the two largest economies inside the Euro zone. The Euro zones economy continues, however, to be fragile with countries such as Spain and Italy struggling. The figures published on Wednesday show a 0.3 % growth.

Austria and Finland also presented positive growth figures while the Cyprus economy contracted 1.4 % in the second quarter, after the international bailout in March. Laiki, the second biggest bank, was forced to close and the Bank of Cyprus and Hellenic Bank suffered heavy losses on big deposits. In spite of some positive signs inside the Euro zone, the economic and fiscal problems seen in the periphery and especially in Southern Europe indicate that the Euro zone is in for a bumpy and uneven recovery.

The positive news from France and Germany had little impact on the currencies. EUR/USD traded at 1.3258 after an earlier high of 1.3278. Traders put stop/loss orders on 1.3230. A break could see a slip to 1.3155. The DXY Dollar basket was marginally down after climbing one percent since its low on August 8th. Oil prices fell during yesterday's session, but precious metals, Gold and Silver, demonstrate a clear, positive upward trend.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

16 AUGUST 2013: OIL JUMPS ON EGYPT UNREST

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Oil prices jumped on the tense situation in the Middle East where at least 535 people were killed in a security crackdown in Egypt. Brent and NYMEX, New York crude, climbed to a four-month high on Thursday with Brent reaching USD 111 a barrel. The escalating violence in Egypt might affect the Suez Canal and spread all over a middle East already torn by a two year civil war in Syria, disturbing death tolls and unrest in Oil producing Iraq and Libya.

Egypt has declared a state of emergency. Supporters of the deposed President Mursi have, nevertheless, announced new major demonstrations. Oil storages in the US are shrinking faster than expected. Egypt is a minor crude producer, but home of the strategically important Suez Canal and the Sumed pipeline. The deadly violence threatens to choke Oil supply routes and have serious consequences for steady Oil supplies from the Middle East.

The Libyan Deputy Oil Minister stated on Thursday that Libya’s Oil production has been reduced by 600 000 barrels a day. Iraq expects to slash supplies with 600 000 barrels a day in September. US crude inventories fell 2.8 million barrels with stocks at the lowest level seen since 2012. As long as the situation in the Middle Eastern area is kept under some control, Brent doesn’t seem to have a potential to climb higher than to USD 113 – 114. Europe’s top Oil company, Royal Dutch Shell, has temporarily closed its offices in Egypt.

The USD has come under new pressure on continued uncertainty over when the Federal Reserve (FED) might start to taper its bond buying program. Retailer Macy’s department store, delivered disappointing results on Wednesday, leading to new question marks regarding the healthiness and growth of the US economy. EUR/USD is at 1.3299 and USD/JPY trades at 98.15. Precious metals, Gold and Silver, have regained some of their safe-haven status and have steadied on levels not seen in months.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

19 AUGUST 2013: EQUITIES STRUGGLE – GOLD REACHES 1373

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

While equities worldwide struggled against the US federal Reserve (FED) tapering concerns, Oil and Silver rallied at the end of last week. Gold rose to a two-month high on Friday. Silver saw its strongest weekly performance in five years with a 13 percent rise, strongly indicating that the wave of selling in precious metals over the last half year, has come to a temporary halt. Gold rose 50 Dollars during the week to hit a peak of USD 1373 a troy ounce.

Precious metal prices were helped by a weaker Dollar. EUR/USD traded steadily above 1.33 during the week with good news coming from the Euro zone. Both France and Germany presented positive growth figures which, in spite of weak fundamentals, are interpreted as the Euro zone possibly coming out of recession. Data on Thursday showed that investors in Japan and China led large sell-offs in US treasuries, following FED's statements on tapering in June.

China has, over the last half year, strongly increased its Gold holdings seemingly in an effort to diversify its investments in US treasuries. China is seen to have built up Gold reserves to become more independent of both USD and EUR. Both currencies are regarded as vulnerable. With eyes pointing towards the future – 10 – 20 years perspective – China seems interested in building up the Chinese currency as a competitive international reserve currency.

Last week saw the first net inflow into Gold backed exchange traded funds, so called ETF's, sine 2012. ETF's sold 402 tonnes of Gold in the second quarter of 2013, double the Gold production of South Africa. Over the last few weeks, the number of Gold 'short positions' have been reduced. This is combined with a surge in Chinese Gold buying which rose 87 % from 2012 to 386 tonnes. Retail buying in India and central banks buying are also boosting Gold prices. Many traders remain, however, gloomy and ask how long the rally in precious metals will continue.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

20 AUGUST 2013: STEADY DOLLAR BEFORE FED MINUTES ON WEDNESDAY

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

The Dollar held steady on Monday as investors refrained from bets on the currency before the publication of the US Federal Reserves (FED) minutes on Wednesday. It is expected that the minutes might give a more clear indication on the pace and timing of FED’s plan to trim its bond buying program. Analyst consensus is that tapering could start in September. The Dollar index, DXY, was flat. EUR/USD trades at 1.3348 and USD/JPY is at 97.97.

Higher yields on Dollar denominated bonds have made the Dollar more attractive over the last few days, but this has been blunted by a promising improvement in the Euro zone and UK economies which have underpinned the Euro and Sterling. Data last week showed that both the German and French economies were growing faster than expected in the second quarter. EU manufacturing and services data are going to be published on Thursday and give a more clear indication as to whether the Euro zone is pulling out of recession.

The data will have an impact on the strength of the Euro, which is expected to falter against the Dollar in the upcoming trading sessions. That could mean that Dollar would start to attract demand against the Euro. The Dollar might also be in for a new test against the Japanese Yen. If the August 15th peak of 98.66 Yen is broken, there might be retest on the August high of 99.955 Yen. Oil and precious metal prices are keeping steady at the high levels seen on Friday. Brent trades at USD 110.55 a barrel and gold stands at USD 1376.

Stock markets in Europe continue to be under pressure with France, Germany, and England indexes trading down. There was a weak start in the equity market in Asia with Asian Pacific index in red territory the first day of the week. The unrest in Egypt continues with new clashes between Mursi-supporters and the police, claiming an unconfirmed 1000 lives taken until now. US politicians claim there has been a halt in the US billion Dollar military help to Egypt.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

21 AUGUST 2013: FED SENDS MARKETS TO ONE MONTH LOW

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

World shares sank to their lowest level in more than a month after disappointing sessions in New York yesterday, along with disappointment when trading started in Asia on Tuesday morning. The sell off continued in Europe, and emerging markets saw funds pouring out. Global markets are worried and at unease with expected cuts in US Stimulus and related gains in bond yields, leading to investors being on edge. Oil and precious metal prices have fallen with the Dollar under pressure. EUR/USD stands at 1.3395. USD/JPY is at 97.29.

European stocks were down with the French CAC as the biggest loser at minus 1.35 %. The FTSE London-index dropped 0.57 % while the German DAX was down 1.06 %. The Russian indices suffered similar losses. The losses in Europe are following a fourth day of straight falls on both Wall street and in Asia. India is also hit hard by a dramatic fall in the Rupee in relation to USD. The Japanese Nikkei fell 2.7 %.

US Federal Reserve (FED) shall publish their minutes from the end of July meeting later on today. It is expected that the minutes could offer hints on when FED will start winding down its USD 85 billion-a-month bond buying program. Uncertainty regarding what is going to happen next has recently driven up bond market borrowing costs. This has sparked a sell off in riskier assets as stocks.

Brent crude, which has been steady above USD 110 a barrel, fell below this level on Tuesday due to nervousness about the effect of a halt in monetary easing. Oil prices are, however, supported by export problems in Libya and the continued unrest in Egypt. Western powers are threatening to withdraw their economic assistance, but Saudi Arabia stated yesterday that they would step in to avoid any collapse of the Egyptian economy.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

22 AUGUST 2013: HOME SALES JUMP TO A 3-YEAR HIGH

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

On the eve of the US Federal Reserve’s (FED) presentation of their monthly minutes, US home resales rose to their highest level in three years. Home sales for July suggested that a sharp increase in borrowing costs is only having a limited impact on the housing market recovery. Home sales jumped 6.5 % to an annual rate of 5.39 million units. Analysts previously forecasted a much smaller increase.

The currencies fluctuated heavily during Wednesday before the FED minutes presentation. EUR/USD jumped above 1.34 and fell back to 1.3386 with major banks taking big short exposures, betting on a stronger Dollar and steep falls in both Euro and Yen. Emerging market currencies, especially in Asia, did fall rather dramatically against the USD in the last few days, with the Indian rupee being the big loser. Oil prices are relatively steady with Brent crude trading below USD 110. Gold rose to USD 1376, but lost ground before the FED minute presentation.

Greece’s financial obligations are again under heavy scrutiny. German Finance Minister Wolfgang Schaeuble stated on Tuesday that Greece would need a third bailout. His election campaign statement came the day before today’s arrival of the European Central Banks (ECB) officials to Athens, to scrutinize Greece’s progress in meeting its international bailout obligations. Since 2010 Greece has been bailed out with 240 million Euro's by the ECB, International Monetary Fund and European Union.

Yields on Greek bonds rose immediately to new yearly highs after the Greek government tried to give the impression that a turnaround in the economy is starting to take place lately. Greece has, for the last 6 – 7 years, been through a dramatic recession. The austerity measures ordained by the “Troika” of ECB, IMF and EU, have created record high numbers of unemployment. The anti-austerity opposition was quick to seize on Schaeuble’s comments, pointing to yet another round of painful austerity.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

23 AUGUST 2013: MINUTES CREATE NEW UNCERTAINTY

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

The minutes from the end of July meeting of the US Federal Reserve (FED) which were published on Wednesday night, did not give markets the clarity they were looking for. The minutes repeat the same generalities markets have been fed with over the last half year. Tapering is going to come, but there is no clear time table for when FED will start to slow down their bond buying program. Whether it is going to start this autumn, or the first half of 2014, is still an open question. Everything hangs on the development of the American economy.

Banks and financial institutions gambling on more clear guidance, were disappointed. The USD is gaining some ground against other currencies, and the yield on US bonds continue to raise. The Dollar DXY, a basket of six major currencies weighed against USD, was up 0.5 %. US treasury yields reached a two-year high of 2.936 percent. EUR/USD trades down at 1.3321. The Japanese Yen is weaker trading at 98.64 Yen a Dollar. Brent is steady around USD 110 a barrel. Gold trades at USD 1371.

The higher yields have, over the last few weeks, led to a repatriation of funds back to the US from emerging markets, helping to support the Dollar which in short term looks very bullish. Tapering or termination of printing of the Dollar, shall mean tighter credit conditions and higher interest rates. Many emerging markets have big exposures in US Dollars and would be faced with big credit problems with a combination of increased interest rates and a stronger USD.

The effects of this trend is already felt in Asia where the Indian rupee is under extreme downward pressure. Countries like Thailand and the Philippines are as strongly hit as Turkey. The Turkish lira has lost 4% against the Dollar only this month. Many analysts fear that Asian countries in a short time will be faced with the same financial and economic crisis as during the Asian crisis of the nineteen nineties. This would have a devastating effect also globally.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

26 AUGUST 2013: GOLD AND SILVER SKYROCKET

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Gold and Silver skyrocketed on Friday. Gold added USD 21.70 and ended at 1397.80 after breaking through the 1400 level during the session. Silver added 4 % to close at 24.08 after trading as high as USD 24.24 an ounce. These quotations represent the highest seen for precious metals in weeks. The technical charts point to further gains. It is therefore greatly likely that the strength in prices will spill over into this week’s trading.

A weaker than expected July 'new home sales' report, which decreased 5 % since June, created new bewilderment in the markets. The July minutes from the US Federal Reserve (FED) created new uncertainty regarding when FED will eventually start tapering its bond buying program of USD 85 Billion a month. This gave precious metals a strong boost. Gold broke out of the technical resistance in USD 1377 – 1380, helped by increased Silver prices on its way up.

The disappointing housing numbers also had a negative impact on the Dollar. The new housing data gave rise to new speculations when tapering will start. September seems unlikely now and currency analysts are pointing to December as more realistic. It is generally believed that tapering of the central bank’s monetary easing would lead to an increase in interest rates and a stronger Dollar. The dollar basket, DXY, weighed against six major currencies, decreased. The Dollar lost ground against both the Yen and the Euro. EUR/USD climbed above 1.34 on the housing numbers.

A second reading of German gross domestic product confirms that Europe’s biggest economy rose 0.7 % in July. This augurs good for Angela Merkel’s re-election opportunities in September, and for better perspective for growth in the Euro zone. Despite the temporary decrease in the Dollar, it is much more favoured by investors over the Yen for the rest of 2013. The Euro has also gained healthily against the Yen over the recent week.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

27 AUGUST 2013: DURABLE GOODS ORDERS DROP

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Durable or capital goods orders in the United States dropped 7.3 % in July, and put new questions marks over the economy at the beginning of the third quarter. The demand for goods ranging from aircraft to computers and defence equipment, fell. This is the biggest decline since last August. The decline in durable goods are coming on the top of negative housing figures published last Friday, indicating a weaker housing market than expected.

It is likely that the failing durable goods numbers will give rise to new speculations on when the US Federal Reserve (FED) will eventually start tapering its bond buying program. It has been indicated that tapering would start in December. Based on the latest figures it is unlikely that tapering might start earlier than at the end of 2013. The fall in durable goods orders had an immediate impact on stock futures. Also yield on US treasuries fell.

Oil prices have continued to rise on the escalation of US involvement in Syria. Brent crude is trading close to USD 111 a barrel. US Defence secretary Chuck Hagel is reportedly going to discuss a possible military intervention in Syria with its British and French counterparts on the alleged use of chemical weapons. The possibility for a direct Western involvement could have serious impacts on the world stock markets and trigger the market to continue its present downward trend.

The US Dollar traded down against Japanese Yen on Monday after new uncertainties arose as to when tapering will eventually start. USD/JPY trades at 98.42 Yen a Dollar. EUR/USD was flat during Monday at 1.3373.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

28 AUGUST 2013: OIL, GOLD AND SILVER SKYROCKET

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Western warmongerings had Oil, Gold and Silver prices skyrocketing on Tuesday. US and allied envoys told rebels fighting Bashar-al-Assad that Western powers will attack Syria within days. The UK Prime Minister, David Cameron, stressed that the most likely day of attack is Thursday. Brent crude jumped by two Dollars USD 113.46 a barrel on the news. Gold and Silver continue to raise as safe havens. Gold reached USD 1420 adding new 25 Dollars during Tuesday’s trade. Silver trades at USD 24.65 up 20 % from levels seen only a couple of weeks ago.

Syria is probably going to be attacked by cruise missiles in what Western observers say are aimed at teaching President Assad and Iran a “lesson” for defying the West. The aim is presumably not to turn the tide in the civil war, which, over the last few months, have given President Assad’s forces the upper hand. NATO air strikes changed the course of the Libyan civil war. The prelude to an eventual attack on Syria is a blue copy of the US and British invasion of Iraq and the NATO-bombings of Serbia in connection with the “liberation” of Kosovo.

Along with Brent US crude, NYMEX, jumped to USD 108.50 a barrel. Western powers are taking a great gamble in attacking Syria. A military action in Syria might result in spreading chaos to the Oil-producing countries in the Middle East, in spite of the fact that Syria itself is not a major Oil producer. Libyan production has already dropped 60 % and down to 665 000 barrels a day. Key shipping routes for crude Oil such as Akaba and the Suez canal areas are well located in the area.

A military action might also put stress on US Oil storages. Commercial crude stock piles were expected to have fallen last week due to heavy consumption of gas during the end of the holiday season. Increased oil prices would put added stress on a US economy considering to terminate using the money printing press by tapering the bond buying program. Data on homes sales and durable goods over the last two days, have shown that continued monetary easing might be necessary to keep growth and the economy on the right track.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

29 AUGUST 2013: OIL HITS SIX- MONTH HIGH

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Oil prices hit a six-month high as shares fell on fears of a military attack on Syria. Especially emerging markets assets were hit hard and world shares slid for a second day in row. Investors were seeking safe haven investments and Gold has been shining over the last few days. Gold prices reached USD 1430, but fell back to 1418 an ounce. Brent crude reached USD 117 a barrel on Wednesday morning, but fell back to 115 levels.

Neighbouring Turkey, which has stated its willingness to support a military action against the Assad-regime without approval from the UN security Council, is one of the emerging markets hardest hit by the uncertainty. Both the Turkish Lira and Indian Rupee fell to new record lows against the Dollar. The USD has traded steady against the Euro at 1.3336 , but has fallen below 98 Yen a Dollar against the Japanese Yen, trading at 97.63.

Even if the real effects on the markets on an eventual hit against Syria remain uncertain, Oil analysts are speculating that Oil prices could jump as high as USD 125 a barrel. New York crude, NYMNEX, was trading at the highest level seen in a year when it jumped to USD 111. It has since fallen back to below USD 110.

Worries over Syria largely shrugged off investor’s concern about euro zone bank lending contracting in July. This highlighted the euro zone’s nascent recovery and might keep pressure on the European Central Bank (ECB) to maintain an expansive monetary policy. The British Pound slipped both against the Dollar and the Euro. Bank of England reaffirmed its attention to keep interest rates low until 2016. The condition for a rise in interest rate is, according to new Governor, Mark Carney, that unemployment falls to 7%, a similar goal set by the US FED.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

03 SEPTEMBER 2013: SEPTEMBER IS GOING TO BRING TURBULENCE TO CURRENCY MARKETS.

DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.

Following the results of yesterday's trading session, the European stock markets showed positive dynamics. The French CAC index which has grown by 1.84%, became the leader of growth. The stock market in the USA was closed in connection with the Labor Day celebrations.

This morning, support to the world markets was given by positive data from China. The index of business activity in the production sector of China, counted by the national bureau of statistics of the country, grew in August to 51 points comparable to 50.3 points the month before. The similar index counted by HSBC bank, grew in August to 50.1 points in comparison with 47.7 points the month before.

Statistics coming from other countries had, in general, mixed characters. The index of business activity in the production sector of Germany grew in August to 51.8 points in comparison with 50.7 points the month before. Analysts expected index growth to 52 points. In France, the similar index didn't change in comparison with the previous month, and made 49.7 points that coincided with expectations of analysts. As a whole, in the Euro zone the index grew to 51.4 points in comparison to 50.3 points in July, however, growth to 51.3 points was expected.

This data was giving support to the Euro during the trading session. As a result, EUR/USD pair opened the day on a level of 1.3211, grew to 1.3226, and then was rolled away to a day minimum of 1.3183, having finished the trading session nearby.

It is necessary to realize that September will be a very important month for the currency markets: all investors returned from summer holiday, trade volumes returned to normal, and the economic calendar is full of very important events. Amongst them, elections in Australia, appointed to September 7; increase of the consumer tax in Japan; the solution of the question on a ceiling of the national debt of the USA; elections in Germany (on September 22) and, naturally, FOMC meeting on monetary policy, planned for September 18-19. It will have the greatest value for currencies, and the current week will help investors to be defined, whether to wait from the regulator turning of the program of stimulation.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

04 SEPTEMBER 2013: THE SYRIAN FACTOR REMAINS DOMINATING IN THE MARKET

DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.

The Syrian Factor Remains Dominating in the Market

News lines are already glistening with various headings.

Limiting factor for the world markets is the quite intense international situation concerning Syria. As it became known, the U.S. President Barack Obama got support of a number of key figures in the American congress in a question of drawing a military blow to Syria. The vote on this matter in the congress will take place next week.

In addition to this, on Tuesday morning there were messages that ballistic missiles were tested in the Mediterranean Sea. The news at the time provoked speculative growth in the Oil market, even in spite of the fact that as a result the Pentagon declared that rocket tests aren't connected with possible operations in Syria, as they were already planned a long time ago (together with Israel).

The price for Brent reached 115.68$ per barrel, and the price for Light was on a level of 108.54$ per barrel. This morning, we can see Brent traded on a price of 113.78$ per barrel, and Light on a level of 107.54$ per barrel, just with a slight decrease.

The EUR/USD pair also became a victim of market fears, which supported sales. The release of data on business activity in the manufacturing industry of the USA became an additional factor of pressure. So, the currency pair from the level of opening at 1.3188 dropped to a minimum of 1.3143 and finished the trading day closely to 1.3165.

The Euro zone will publish a series of data today on business activity in the services sector. The indicator can continue to show growth, maintaining hopes of investors of a more aggressive speech from the head of the European Central Bank during a press conference after the meeting. In that case it is possible to wait for a kickback of EUR/USD from 1.3150, with probability of breakdown 1.32 and the further purpose on 1.3230.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

05 SEPTEMBER 2013: THE BANK OF JAPAN LEFT MONETARY POLICY WITHOUT CHANGES

DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.

Asian stock markets are not receiving any accurate impulses for long-term movement in the market, that is why indexes in general are moving in a different direction. Today we also can see multi-directional dynamics in the market. The worse indexes are looking so far like the index of continental China SSE, the Australian ASX, and also Japanese Nikkei.

Today's meeting of the Central Bank of Japan ended with the regulator deciding to leave the current monetary policy without change, having raised an assessment of the state of the economy for the first time in 2 months. There have already been offers from some board members to make the target rate of inflation more flexible, and not to go so strictly with the rate on 2%. The Japanese Yen practically didn't react to these statements, having continued to bargain under level 100 against the American Dollar, and the stock market started decreasing gradually. Meanwhile, the hi-tech exporting companies, which are most sensitive to a rate of national currency, today mainly grew, so Sony, Pioneer and Toshiba add about 1.2%.

In the meantime in the USA, the stock market finished yesterday’s trading session with an increase in the price of the main indexes. The reasons for that were the improvement of macroeconomic realities in the Euro zone and the USA, and also an increase in demand for shares of auto makers and the hi-tech companies. The revised data on gross domestic product of the Euro zone confirmed 0.3% growth of the economy of the region in the 2nd quarter, having a strengthened impression of the favorable data published the other day on the industry in Europe. In the USA, according to the report of the Beige book, the industry grew, and consumers began to spend more for entertainment, in particular, on tourism.

The vote of the Committee of foreign affairs at the Senate, in favor of a limited military blow to Syria, didn't scare investors. Let's note that the final decision will be made, most likely, in a few days. The price for Oil stabilized slightly and decreased in comparison to the last few days. Brent is traded on a level of 113.37$ per barrel, and Light is traded on a level of 106.63$ per barrel.

Today investors will be waiting for the conference of Mr.Dragi and the unemployment figures from the USA.

Copyright: MAYZUS Investment Company Ltd

 

[MAYZUS.Neeraj]

06 SEPTEMBER 2013: THE RELEASE OF STRONG DATA FROM THE USA STRENGTHENED SALES OF EURO

DAILY MARKET REVIEWS
By Kristina Leonova: Analyst in Portfolio Asset Management Department.

Statistical data presented yesterday in America had a more considerable impact on the market than the meetings of two main Central Banks! As a result, the stock market of the United States finished the trading session with small growth of the main indexes. Dow Jones Industrial Average raised on 0.04% to the level of 14937.50 points, the index of the wide market Standard & Poor's 500 increased by 0.12% to a price of 1655.08 points, and the index of high-tech industries, Nasdaq Composite, went to plus on 0.27% and reached a point of 3658.78.

Strong macroeconomic data from the USA, in addition to the press conference of Mr. Dragi, became the last straw, and if the currency pair in the morning tried to keep next to the level 1.32 – it was unsuccessful, dropping to a local minimum on the level of 1.3109. Dragi began his speech with discussions on slights signs of recovery in the economy, but summed up by declaring that hard times have not yet passed. Moreover, he confirmed that it is impossible to exclude the need of lower rates.

Tension around the 'Syrian' question continues to grow. Accusations of attempted murder of the Minister of Internal Affairs of Egypt, confirms that all of the Middle East, not only Syria, is experiencing internal problems. It only maintains demand for the US Dollar, which is so popular in anticipation of the report on "non-farm” payrolls.

In the commodity market, Brent is traded on a level of 113.49$ per barrel, and Light reached 107.63$ per barrel. Gold with delivery in December on COMEX, yesterday fell in the price by 1.22% to the level of 1373.00$ for troy ounce, and this morning is traded on a level of 1371.56$.

Copyright: MAYZUS Investment Company Ltd