Energy Prices Continue To Slide
High prices may finally be impacting
oil consumption. The Conference Board released its July Leading
Indicators data, which despite matching analysts expectations showed a 1.2%
decline from June’s reading.
Leading the energy sector lower today was October Natural
Gas -4.98%, followed by Harbor Unleaded -1.89% and Crude Oil
-0.13%. Heating Oil +0.35% was the only energy future to close higher.
Crude oil has lost over 5% in three days.
Read Kathy Lien’s interesting article on oil here.
US treasuries rallied after Japanese government report showed
increased purchases. Foreign investors are being drawn to US bonds due to the
yield spread over European and Japanese bonds. Recent economic data suggests the
Federal Reserve will be forced to continue raising rates into 2006 boosting the
yield advantage. Bonds closed higher across the curve, September 10yr T-Note
+0.56%, 5yr T-Note +0.25% and 2yr T-Note +0.08%.
The US Dollar continued its winning run vs. the euro, rallying
for the 5th consecutive day. The dollar was boosted by the stronger than
expected Philly Fed Survey showed manufacturing growth. The news also helped
drive the dollar higher vs. the Japanese yen.
The grains were mixed with only December Wheat +1.90%
showing decent gains among the major contracts. Among the softs, December
Cocoa +1.90% closed higher, while October Sugar -1.23%, December
Coffee -2.44% and December Cotton -1.76% closed lower.
Economic News
Jobless Claims:
Initial Claims – Actual 316 K Consensus 315 K
Leading Indicators
M/M Change – Actual 0.1% Consensus 0.1%
Philadelphia Fed Survey:
General Business Conditions Index – Actual 17.5 Consensus 12.0
Ashton Dorkins