Dollar And Oil Slide While Silver Rallies Strong

The Ten-year Treasury yield fell the most in 6 weeks today as
Fed Chairman Bernanke’s testimony in front of Congress fueled investor
speculation that the Fed will pause hikes in August.  Bernanke used the
word “moderation” when describing the growth of the U.S. economy, which sparked
a rally in bond prices as investors sought the safety of long-term fixed income
investments.  The slowing of the U.S. economy has been at the forefront of
the bond action; the timing of Bernanke’s appointment as head of the Fed comes
just as the Treasury has been expecting to stop a streak of 17 hikes in a row.

The Dollar declined against the Euro and the Japanese Yen
today after Bernanke’s comments.  Specifically, his term “moderation,” used
to describe U.S. economic growth, led to a sell-off in the Dollar across the
board.  Many investors were expecting Bernanke to come out more hawkishly
by prepping the economy for more hikes, but his attitude today left investors
the task of pricing the hypothetical hike out of the market. 

Crude oil futures fell today to their lowest price in three
weeks after the Energy Department released inventories showing an increase in
crude stockpiles.  Crude fell 1.2% to close at $72.66 a barrel. 
Natural gas rose 5% after 2 days of sharp decline.

As demand for the Dollar lagged, gold and silver both rallied
to close up for the day.  Gold closed up over 2% and silver closed up
nearly 6%.  After hearing Bernanke’s somewhat dovish comments, investors
turned back to commodities to find safety in the metals.

The softs traded mixed with fractional gains, except for
orange juice which closed up over 2%, and sugar which closed down nearly 2%.

The grains traded lower across the board today as the heat
wave continues in the Midwestern United States.  Wheat fell 1.2%, oats fell
over 3% and corn dropped 0.7%.

The meats traded mixed today, with feeder cattle down
fractionally and potbellied pigs up 1.5%.


Economic
News

Crude Inventories Show Slight Build, Break Recent Streak Of
Declines (full
story
).

Housing Starts And Building Permits Show Substantial Decline (full
story
).

Fed Chief Says Monetary Policy Data Dependent, Will Take Lag
Into (full
story
).

CPI Up 0.2% For June

John Patrick Lee