Oil Closes Below $60
U.S. 10-year Treasury bond yields remained unchanged today,
after falling back towards 7-month lows yesterday. Bond prices remained
stable near 7-month highs, as investors looked to the record levels in the Dow
as confirmation of a bustling U.S. economy. Bond prices have soared as the
Fed has kept rates at 5.25% for two consecutive meetings, sparking investor
concern that the economy is indeed slowing.
The yen fell against the euro and the yen today, after North
Korea announced plans to go ahead with nuclear testing. North Korea’s
announcement flies in the the face of Japan’s government, who has staunchly
opposed all attempts by North Korea to develop and test nuclear weapons.
Japan’s counter stance weakened the currency in the eyes of global investors,
who foresee a possible retaliation, or even pre-emptive strike from Japan.
Crude oil futures fell 3.9% to close at $58.67 a barrel,
reaching 7-month lows. Investors speculated that tomorrow’s inventory
report will show a jump in fuel inventories. Investors are looking at $50
as the next target price for this fall, as they wait for OPEC to signal a cut in
global production. Natural gas rose 2.1% on hot weather forecasts for the
Midwest and South, which will up the demand for the energy future.
Gold fell 3.6% to close at $581.50 an ounce as the futures
contract continued to trade hand-in-hand with oil. Through the summer, oil
and gold traded lock-step, as demand for energy fueled demand safety in the
metal contract. Gold is down 21% from its May highs, and oil is down 25%
from its July highs. Copper fell 3.2% on worries that the economic
slowdown in the U.S. will significantly dent demand for the metal, which is
commonly used in building houses.
Softs traded mixed today. Cocoa was down nearly 1%,
coffee was up 0.7%, orange juice was down 0.6% and sugar fell 3.8%.
Grains fell today across the board. Corn was down 1.4%,
wheat was down 1.4%, soy was down 0.5% and oats were down 0.3%.
Meats traded mixed today, with cattle up fractionally and
porkbellies down 0.7%.
A round of economic reports were released
today.
Check them
here.
John Patrick Lee