Showed the financial markets including the commodities sector positive feedback about what he appears to be a concerted effort by central banks to boost liquidity and confidence, has announced five major central banks implement a coordinated reduction in interest rates imposed on the swaps in U.S. dollars, which would help the flow of liquidity between the international banks, as the Chinese central bank has cut the compulsory reserve ratio for domestic banks suddenly and for the first time in almost three years. The move has forced the Central Bank of China to focus again on growth, where it appears that the second largest economy in the world is heading towards recession faster than expected during the coming months.
Said Ole S. Hansen in the first strategic goods sector bank «Saxo»: did not lose Index Reuters Jefferies CRB only 0.4 percent during the month of November, a total decline of 5.6% from the beginning of the year to date.
The debt crisis has continued through this month to proceed unchecked with the rise of the dollar by 1.4% against a basket of currencies, which in turn led to the removal of some support for commodities. The main item is the West Texas Intermediate crude, which was able to narrow some of the difference between him and Brent continued to receive support in general, against the backdrop of conditions prevailing before the crisis during the winter and geopolitical risks looming on the horizon in Iran. The performance of the agricultural goods sector is worse than others, and was seven out of ten of the worst-performing commodity belonging to this sector.
Hansen said the report of the Bank «Saxo» Weekly commodity markets – the price of copper rose strongly as a result of excessive case of a sale of these goods, and most other commodities followed this trend, not least because of what seemed to be a temporary weakness in the value of the dollar.
In the meantime, the U.S. economy continued to distance himself away from the rest of the economies where economic data continued to climb and then removing the threat of a recession for the world’s largest economy. It is not likely to contribute to the economic recession in Europe and a slowdown in developing economies in the global economy avoid the risk of slowdown during the three months to six the next, it is expected that the goods are being made a strenuous effort to achieve some gains and gains on the basis of this assumption.
He continued: It is important to note that this case does not represent a turning point for the debt crisis in the euro area, and requires the owners of the policy to show the solutions similar to those offered by central banks, which require a sovereign debt crisis in Europe, clear strategies, and only then it will be possible to provide treatment potential of whatever nature. It therefore seems that the difficulty of market conditions and trading are to continue under the bypass for the high volatility in the recent period of the current financial crisis raging, which lasted for two periods during the thirties of this century.
The main risks
And resulted in actions taken by central banks to a large rise in the price of the stock market, however, bond markets have failed to catch this wave, especially with the survival of bond yields of Italy within the high levels and long-term and stable, while the decreased yield on German government bonds for one year to less than zero , which made many investors are now more concerned about the return of their money rather than earn a return on it. In light of the continued decrease in liquidity, and we approach the end of the year, it is expected that the markets become more vulnerable to major risks and trading decisions with a very short term, as investors try to strive for the protection of their profits or limit losses.
Decline in speculative positions
Continued to hedge funds and other large speculators reduce exposure to commodity trading during the month of November, showed recent data from the Commodity Futures Trading Commission that it reduced the proportion of exposed joint long-term futures contracts and options for the number of 25 items by 19%, equivalent to 770 000 points, the lowest level since July 2009, and well below the recent rise of nearly 2 million contract last February. On the basis of the nominal value, the lower the exposure to these contracts worth $ 12 billion to reach $ 76 billion over the past week.
It has become increasingly important to look at this data as an indicator of a potential reversal, and a good example copper, which has seen a decline throughout the trading last week and then returned to achieve an increase of 10%. According to the Commodity Futures Trading Commission, compounded investors positions the short three times for copper in the presence of expectations of continued low prices, which leave investors vulnerable to news of the positive, which soon announced by the central banks, which led to a rise in strong prices and shrinking the size of small centers.
preventing of gold prices
He traders in gold metal strong reactions at the announcement that the central banks after everyone saw the quiet trading over the past week. Has been promoting the rise in gold prices, which reached a level of $ 1750 an ounce, the highest rate since two weeks, by trading volumes large, which can refer to it while looking many on the process of correcting further price but they do not want to miss This upward trend is likely.
The gold is generally seen as one of the safest investments and well-tolerated among most other commodities in the case of the economic outlook deteriorates. We believe that the dollar will have the support and promotion again soon, and this remains a major impediment to higher gold price only if the crisis escalated further than it is.
Seems that the price of oil began looking for a barrier resistance during the last week after continued levels of support to the task when the level of 95 for West Texas Intermediate crude and the level of 105 for Brent crude in early. Live market in a critical situation which has now stuck between the deterioration of the outlook for economic growth along with the return of Libyan oil and the crisis conditions in the winter season and the prevailing geopolitical risks.
And continues to the prevailing crisis between the Western governments, Iran, the second largest oil producer within OPEC, exacerbated, especially with the United Kingdom close its embassy in the aftermath of the attack, and impose these risks geographical and political rise in oil prices, which could be worth up to five dollars, and likely that these risks tend to sprawl. Due to the lack of strong convictions regarding the future direction, it seems that the current levels, amounting to between 95 to 105 for West Texas Intermediate crude, and between 105 to 115 for Brent will continue for some time.