Bonds Push Further into Yearly Records

U.S. 10-year Treasury bond prices rose to new yearly highs, on general
anxiety concerning the future of U.S. economic growth. Traders are taking an
extremely defensive position relative to bonds, heading into the end of the
year. Bonds typically rise on economic weakness and fall on strength, so bond
prices resting at yearly highs means that traders are bracing for an economic

The dollar continued falling against the euro today, inching closer to record
lows. The dollar has been sinking on overall negative economic sentiment, mostly
stemming from the housing and lending sectors. Housing and lending problems led
to widespread panic, and a liquidity crunch, the costs of which have yet to be
fully realized. The dollar was basically flat against the euro. The ECB and BoE
both kept rates steady today, while most traders focused on dollar weakness. The
dollar sank against the Canadian dollar and British pound today.

Crude oil fell about 1% today, after hitting new highs yesterday on Middle
East worries. Economic and equity weakness in the U.S. led traders to sell oil,
on speculation that a slowing U.S. economy will mean less demand for energy.
Crude oil has been sky rocketing to new records for over a month now, on general
demand worries for the U.S. Middle East tensions have also added to the
problems. Natural gas futures rose about 1%.

Gold futures fell about 0.2% today, in line with falling crude prices. Gold
normally trades inversely to the dollar and with crude oil. Today, traders chose
to focus on crude weakness, and sold the dollar on falling energy prices. Copper
futures also fell, down around 2%.

Grains were up today. Soybeans rose about 0.2%, while corn jumped 1.3%.

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