Crude oil resumed its downward march after the two main contracts tumbled yesterday. Precious metals slumped with the yen as the biggest drop by Shire Plc in 12 years dragged Europe’s main stock gauge toward a seventh straight loss.
Brent crude slid 1.4 percent by 8:50 a.m. in London while West Texas Intermediate oil dropped 1.5 percent. Brent tumbled 4.3 percent yesterday, the most in three years. Gold retreated 0.8 percent. The Stoxx Europe 600 Index slid 0.2 percent, with Shire tumbling as much as 28 percent as AbbVie Inc. reconsiders a takeover bid. The MSCI Asia Pacific Index (MXAP) climbed 0.3 percent as the declining yen boosted Japanese shares. Standard & Poor’s 500 Index futures fluctuated and the Bloomberg Dollar Spot Index climbed 0.1 percent.
Oil is languishing in a bear market, with the International Energy Agency predicting the lowest demand growth since 2009, even as U.S. supplies rise. The dollar index has gained more than 6 percent since the end of June as signs of recovery in the world’s biggest economy contrast with data signaling weakness in China, Japan and the euro zone. China reported weaker-than-estimated consumer inflation, spurring speculation that the government may undertake further targeted measures to support expansion.
“Europe is weak but that’s not new,” Naoki Fujiwara, Tokyo-based chief fund manager at Shinkin Asset Management Co., which oversees about $6 billion. “The U.S. economy remains on a recovery track. There’s no huge change in the scenario, but investors have been looking for the right timing to come in to the market and are betting on a rebound.”
Demand Slows
West Texas Intermediate crude oil futures slipped to $80.60 in New York after falling 4.6 percent yesterday, the most since November 2012. Brent traded at $83.98 a barrel in London. Contract prices on the fuel fell 26 percent from June 19 through yesterday.
Global oil demand will rise by 650,000 barrels a day this year, the Paris-based agency said in its monthly report yesterday. That’s a reduction of 250,000 from a prior projection. Crude stockpiles in the U.S., the world’s biggest consumer, probably expanded by 2.5 million barrels last week, a Bloomberg News survey shows before government data tomorrow.
Thirteen of the 19 industry groups advanced on the Stoxx 600, which yesterday capped a sixth straight daily retreat, its longest streak of declines since November 2011.
Shire Plc accounted for more than half of the Stoxx 600’s drop. AbbVie Inc.’s board will meet Oct. 20 to consider scrapping the drugmaker’s planned $55 billion acquisition of Shire in what would be the biggest casualty of the U.S. crackdown on so-called tax inversions.
China Data
Chinese stocks rallied as the country’s one-year interest-rate swaps dropped to a two-year low a day after the central bank cut the rate on 14-day repurchase agreements for the second time in a month.
The Hang Seng China Enterprises Index climbed 0.4 percent in Hong Kong, where the Hang Seng Index increased 0.5 percent. The Shanghai Composite Index (SHCOMP) rose 0.6 percent and a 2.4 percent surge in a measure of health-care stocks pushed the CSI 300 Index to a 0.7 percent gain.
Yuan Cut
The People’s Bank of China cut the yuan reference rate by 0.08 percent to 6.1455 per dollar, the biggest reduction since Aug. 21, as China’s factory-gate prices fell for a record-tying 31st month. Data on new lending is due as soon as today.
“The low inflation lays the foundation for further targeted measures to support growth,” said Huang Hai, the Beijing-based deputy head of the research department at SDIC CGOG Futures Co., a unit of State Development & Investment Corp. “Concerns over growth momentum persist, and that can explain why the PBOC cut the rate in repo operations again.”
Euro Weaker
The yen weakened 0.2 percent to 107.28 per dollar, a second day of retreat. The euro slipped 0.1 percent to $1.2650 and Canada’s dollar slid 0.4 percent to $1.1341.
Gold retreated to $1,223.76 an ounce and silver slid 1.7 percent to $17.0940. The yellow metal is down a second day after closing at its highest level in a month on Oct. 13. Palladium plunged 1.8 percent to $779.44 and platinum fell 1.2 percent.
Bank of Korea Governor Lee Ju Yeol and his board lowered the seven-day repurchase rate to 2 percent from 2.25 percent, the central bank said in a statement in Seoul today. That’s the lowest since 2010.
“Our economic outlook isn’t bright: households are suffering from high debt, corporate earnings are disappointing and big export markets are still far from full recovery,” said Lee Jung Joon, a fixed-income analyst at HMC Investment Securities in Seoul. “South Korea may need more rate cuts to gain meaningful recovery momentum.”
Brent Crude Extends Biggest One-Day Plunge Since ’11 on Glut
Brent crude extended its biggest one-day collapse in four years amid speculation OPEC will refrain from eliminating a glut while demand growth slows to its lowest since 2009.
Brent slumped as much as 2 percent to $83.37 a barrel on the ICE Futures Europe exchange in London. Yesterday it plunged 4.3 percent, the biggest one-day drop since September 2011. Global oil demand will rise by 650,000 barrels a day this year, the Paris-based agency said in its monthly report yesterday. That’s a reduction of 250,000 from a prior projection.
“The market is currently in a state of panic as no one is prepared to put a hand under it,” Ole Sloth Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by e-mail.
Brent for November settlement, which expires tomorrow, was $1.33 lower at $83.71 a barrel on the London-based ICE Futures Europe exchange as of 9:03 a.m. local time. The more-active December contract was down $1.31 at $84.08. The European benchmark crude traded at a premium of $3.15 to WTI, compared with $3.20 yesterday.
source: Bloomberg
Brent crude slid 1.4 percent by 8:50 a.m. in London while West Texas Intermediate oil dropped 1.5 percent. Brent tumbled 4.3 percent yesterday, the most in three years. Gold retreated 0.8 percent. The Stoxx Europe 600 Index slid 0.2 percent, with Shire tumbling as much as 28 percent as AbbVie Inc. reconsiders a takeover bid. The MSCI Asia Pacific Index (MXAP) climbed 0.3 percent as the declining yen boosted Japanese shares. Standard & Poor’s 500 Index futures fluctuated and the Bloomberg Dollar Spot Index climbed 0.1 percent.
Oil is languishing in a bear market, with the International Energy Agency predicting the lowest demand growth since 2009, even as U.S. supplies rise. The dollar index has gained more than 6 percent since the end of June as signs of recovery in the world’s biggest economy contrast with data signaling weakness in China, Japan and the euro zone. China reported weaker-than-estimated consumer inflation, spurring speculation that the government may undertake further targeted measures to support expansion.
“Europe is weak but that’s not new,” Naoki Fujiwara, Tokyo-based chief fund manager at Shinkin Asset Management Co., which oversees about $6 billion. “The U.S. economy remains on a recovery track. There’s no huge change in the scenario, but investors have been looking for the right timing to come in to the market and are betting on a rebound.”
Demand Slows
West Texas Intermediate crude oil futures slipped to $80.60 in New York after falling 4.6 percent yesterday, the most since November 2012. Brent traded at $83.98 a barrel in London. Contract prices on the fuel fell 26 percent from June 19 through yesterday.
Global oil demand will rise by 650,000 barrels a day this year, the Paris-based agency said in its monthly report yesterday. That’s a reduction of 250,000 from a prior projection. Crude stockpiles in the U.S., the world’s biggest consumer, probably expanded by 2.5 million barrels last week, a Bloomberg News survey shows before government data tomorrow.
Thirteen of the 19 industry groups advanced on the Stoxx 600, which yesterday capped a sixth straight daily retreat, its longest streak of declines since November 2011.
Shire Plc accounted for more than half of the Stoxx 600’s drop. AbbVie Inc.’s board will meet Oct. 20 to consider scrapping the drugmaker’s planned $55 billion acquisition of Shire in what would be the biggest casualty of the U.S. crackdown on so-called tax inversions.
China Data
Chinese stocks rallied as the country’s one-year interest-rate swaps dropped to a two-year low a day after the central bank cut the rate on 14-day repurchase agreements for the second time in a month.
The Hang Seng China Enterprises Index climbed 0.4 percent in Hong Kong, where the Hang Seng Index increased 0.5 percent. The Shanghai Composite Index (SHCOMP) rose 0.6 percent and a 2.4 percent surge in a measure of health-care stocks pushed the CSI 300 Index to a 0.7 percent gain.
Yuan Cut
The People’s Bank of China cut the yuan reference rate by 0.08 percent to 6.1455 per dollar, the biggest reduction since Aug. 21, as China’s factory-gate prices fell for a record-tying 31st month. Data on new lending is due as soon as today.
“The low inflation lays the foundation for further targeted measures to support growth,” said Huang Hai, the Beijing-based deputy head of the research department at SDIC CGOG Futures Co., a unit of State Development & Investment Corp. “Concerns over growth momentum persist, and that can explain why the PBOC cut the rate in repo operations again.”
Euro Weaker
The yen weakened 0.2 percent to 107.28 per dollar, a second day of retreat. The euro slipped 0.1 percent to $1.2650 and Canada’s dollar slid 0.4 percent to $1.1341.
Gold retreated to $1,223.76 an ounce and silver slid 1.7 percent to $17.0940. The yellow metal is down a second day after closing at its highest level in a month on Oct. 13. Palladium plunged 1.8 percent to $779.44 and platinum fell 1.2 percent.
Bank of Korea Governor Lee Ju Yeol and his board lowered the seven-day repurchase rate to 2 percent from 2.25 percent, the central bank said in a statement in Seoul today. That’s the lowest since 2010.
“Our economic outlook isn’t bright: households are suffering from high debt, corporate earnings are disappointing and big export markets are still far from full recovery,” said Lee Jung Joon, a fixed-income analyst at HMC Investment Securities in Seoul. “South Korea may need more rate cuts to gain meaningful recovery momentum.”
Brent Crude Extends Biggest One-Day Plunge Since ’11 on Glut
Brent crude extended its biggest one-day collapse in four years amid speculation OPEC will refrain from eliminating a glut while demand growth slows to its lowest since 2009.
Brent slumped as much as 2 percent to $83.37 a barrel on the ICE Futures Europe exchange in London. Yesterday it plunged 4.3 percent, the biggest one-day drop since September 2011. Global oil demand will rise by 650,000 barrels a day this year, the Paris-based agency said in its monthly report yesterday. That’s a reduction of 250,000 from a prior projection.
“The market is currently in a state of panic as no one is prepared to put a hand under it,” Ole Sloth Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by e-mail.
Brent for November settlement, which expires tomorrow, was $1.33 lower at $83.71 a barrel on the London-based ICE Futures Europe exchange as of 9:03 a.m. local time. The more-active December contract was down $1.31 at $84.08. The European benchmark crude traded at a premium of $3.15 to WTI, compared with $3.20 yesterday.
source: Bloomberg