Crude Oil Falls Below $64
U.S. 10-year Treasury bond yields fell today, after $8 billion
in the notes were sold today at lower yields than were forecasts at a government
reopening auction. Analysts were predicting the yields to be sold at
4.819%, but they were actually sold at 4.81%. Yields have risen from
5-month lows during the past week and a half, as U.S. companies look to sell $80
billion in bonds this month. Low investor demand also sent yields lower,
as reopening auctions tend to garner less interest than regular auctions.
The yen fell against the euro today, and fell to the lowest
levels since April against the dollar. A report today stated that a draft
of the G-7 statement did not mention any currency or foreign exchange, meaning
that the meeting could ignore the topic altogether. This would be trouble
for a weakened yen, after more and more reports are pointing to a dovish BOJ to
keep rates the same for the rest of the year. A report today showed that
the U.S. trade deficit widened to a new record in July, but the dollar did
manage to gain moderately over the euro. Of the three currencies, the euro
looks the strongest at this point, with the ECB set to raise rates possibly
twice before the year is out. The U.S. Fed meeting is set for September
20, with nearly a 90% chance that rates will stay the same.
Crude oil futures traded lower today, closing down 2.9% at
$63.72 a barrel. The International Energy Association cut its global
consumption forecast by about 100,000 barrels for the year, which helped to
drive prices lower for crude for the 7th straight day. Natural gas fell 2%
as mild weather continued to drive demand for the energy source lower.
Gold futures erased early gains to close with modest losses,
as the plummeting price of oil continues to hurt demand for the safe-haven
future. Gold fell 0.5% to close at $594.30 after reaching $607 early in
the session. Silver and copper both fell around 0.4% during today’s
trading.
Softs traded mostly lower today. Cocoa dropped
fractionally, coffee fell just over 0.1%, orange juice fell 0.6%, and sugar
stood out, up over 1%.
Grains mostly fell today, with corn and wheat both down 2.3%.
Soy fell 0.9% while oats rose 0.5%.
Meats traded higher, with cattle up 0.2% and porkbellies up
0.9%.
Trade Deficit Widens To A Record Level In July (full
story).
John Patrick Lee