Oil, Gold Hold Their Ground

U.S. 10-year Treasury bond yields fell for the second straight
day as corporate sales for bonds fueled demand for bonds and on anticipation
that government reports this week will show a slowing economy and little
inflation. Bond prices rose as companies look to sell $80 billion in bonds
before the month is out; last week about $19 billion in bonds were sold.

The yen rose off of recent lows against the dollar and also
gained against the euro after comments from a BOJ board member signaled that
Japan might raise rates before the year is out. The yen has looked weak
against the dollar and euro as of late, as more and more economic reports showed
a Japanese economy that was growing at a slower rate than previously thought.
The U.S. Fed is slated to meet next week, when the Fed will either raise rates
or remain pausing. Interest rate futures show that there is just under 90%
chance that the Fed will continue the pause at the next meeting, as reports
trickle in showing a slowing U.S. economy with little need to worry about
inflation. The euro has been the strongest performer, as the European
Central Bank looks to raise rates before the summer is out, possibly twice.

Crude oil staged a bounce today, rising 0.5% to close at
$64.08 a barrel. U.S. inventories fell 2.9 million barrels last week,
which helped the futures contract to stage a small comeback after seven straight
days of decline. Also in the news was a call for sanctions against Iran,
coming from the U.S. towards the International Atomic Energy Agency today.
Natural gas fell over 2% to close near 2-year lows as demand for the energy
continues to die down with the moderate weather.

Gold futures traded slightly higher as oil also rose slightly.
Oil and gold have been trading hand-in-hand over the summer, as a positive
correlation exists between the safe-haven futures and the non-renewable energy
source. Copper fell to 3-week lows today as China, the world’s biggest
copper consumer, said that industrial production was at its lowest levels in
nearly a year and a half.

Softs traded mixed today. Cocoa was up 1.5%, coffee rose 0.4%,
orange juice fell 1.2% and sugar soared 7.1% higher for the day.

Grains traded mixed for the day, with corn up 0.2%, wheat down
1.8%, soy up 0.5% and oats down 0.5%.

Meats traded lower, with cattle down 0.8% and porkbellies down


Crude Oil Inventories Slide Again (full

John Patrick Lee