Oil Ends The Week Below $70

U.S. Treasury bond yields across the boards are trading at
their lowest levels since March. The 2-, 5- and 10-year bond prices have
been on the rise steadily since June, when the Fed paused its cycle of rate
tightening. Investors are bullish on price and bearish on yields, as broad
investor sentiment is looking for the Fed to keep rates the same during the
next meeting in September. Some are even calling for rate cuts to start
happening near the end of the year and into 2007, which could push bond prices
even higher.

The dollar fell today against the yen and the euro after a
government report showed that contracts to buy previously owned homes fell the
most in five years during the month of July. Early in the session, the
dollar rallied on the jobs report, which showed solid job growth, but the
housing numbers brought the dollar back on fears that the Fed is done with the
rate hikes. The dollar is in trouble against the euro, with the ECB geared
to raise rates before the year is out, possibly two times. The Bank of
Japan has fluctuated in its public statements about coming hikes, but general
sentiment points to a hike before the year is out.

Crude oil futures fell 1.5% to $69.19 a barrel on weather
forecasts that call for fewer-than-expected hurricanes before the year is out,
and on demand issues. Weather experts cut their forecast of expected
hurricanes from five to seven, as the hurricane season so far has been less
dramatic than what was previously predicted. Demand for oil also looks to
slow in the U.S., as more and more economic reports point to a slowing U.S.
economy, which would seriously affect demand. Natural gas fell more today,
down 2.5%, on continued moderate weather in the Gulf and Midwest.

Gold rose today 0.3%, despite a drop in crude supply.
Gold rose on demand for safe-haven futures, after a government report showed a
significant decrease in previous home sales dropped during July, which would
signal weakness in the dollar and a slowing economy. Silver and copper
both rose fractionally, while aluminum fell 0.25%.

The softs traded mixed today, with cocoa up 1.5%. Coffee
fell 0.6%, orange juice fell 1.4%, and sugar fell 3.4% on speculation that
Brazil will increase its global sugar shipments.

Grains mostly fell today. Corn dropped 0.9%, wheat fell
0.7%, soy fell 0.7% and oats rose 1%.

Meats traded slightly higher, with cattle up 0.1% and
porkbellies up 0.5%.


The Pace Of Growth In The Manufacturing Sector Slows In August

U.S. Employment Increases By 128,000 Jobs In August (full

John Patrick Lee