Gold Holds Gain as Fed Done Everything to Prepare Markets

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Gold held an advance from a five-year low as Federal Reserve Vice Chairman Stanley Fischer said that U.S. policy makers have done their best to prepare international markets for the first interest rate increase since 2006.

Bullion for immediate delivery was at $1,081.52 an ounce at 8:17 a.m. in Singapore from $1,082.21 on Thursday, when prices gained 1.1 percent as the dollar fell, according to Bloomberg generic pricing. This week, the metal remains 0.2 percent lower after dropping on Wednesday to $1,064.55, the lowest since February 2010.

Bullion investors are zeroing in on when higher U.S. borrowing costs are likely to start rising as the metal doesn’t pay interest. The U.S. central bank, which has held rates near zero since 2008, is contemplating lifting them as the job market heals and officials gain confidence that inflation will accelerate toward the Fed’s 2 percent goal. Policy makers next meet Dec. 15-16.

The likelihood of higher rates by year-end is 68 percent, up from 50 percent at the end of October, futures data show. Fischer said Thursday the Fed has “done everything” it can to avoid surprising markets and governments when it moves.

Source: Bloomberg

Oil Falls to Three-Month Low as U.S. Supply Gain Worsens Glut

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Oil dropped to the lowest level in almost three months as government data showed U.S. crude inventories rose to the highest for this time of year since 1930.

Crude fell 0.5 percent in New York after dipping below $40 a barrel Wednesday for the first time since August. Stockpiles rose by 252,000 barrels last week, keeping supplies more than 100 million barrels above the five-year seasonal average, according to the Energy Information Administration. U.S. refineries processed more oil as they ended seasonal maintenance.

Oil has slumped about 45 percent in the past year amid speculation the global glut will persist as the Organization of Petroleum Exporting Countries continues to pump above its collective quota and Russian output rises to a post-Soviet era high. A warmer-than-average winter could weaken heating-fuel demand enough to trigger a drop in the price of crude to $20 a barrel, according to Goldman Sachs Group Inc.

West Texas Intermediate for December delivery, which expires Friday, fell 21 cents to settle at $40.54 a barrel on the New York Mercantile Exchange. It’s the lowest close since Aug. 26. The more-active January contract dropped 23 cents to $41.72.

Brent for January settlement rose 4 cents to end the session at $44.18 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude closed at a $2.46 premium to January WTI.

Source : Bloomberg

Aussie to Real Defy Commodity Rout as Fed Defangs Rate Increase

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Commodity currencies including the Australian dollar, South Africa’s rand and the Brazilian real are surging as traders focus on the potential for a gradual cycle of U.S. interest-rate increases and ignore a rout in raw material prices.

New Zealand’s dollar led gains on Thursday, when the greenback fell against its 16 major peers as minutes of the Federal Open Market Committee’s October meeting signaled a shallow path for any rate increases next year. The Aussie is poised for back-to-back weekly advances, with traders paying the smallest premium on options to protect against weakness in the currency in more than a year even as iron ore, Australia’s chief export, dropped to a four-month low.

The Aussie traded at 71.87 U.S. cents as of 9:18 a.m. in Tokyo from 71.94 on Thursday, poised for a 0.8 percent advance this week. New Zealand’s dollar fetched 65.59 U.S. cents after climbing 1.5 percent to 65.66 in the previous session. The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 peers, was little changed at 1,228.70 after declining 0.7 percent on Thursday, the biggest drop since Oct. 14.

Source: Bloomberg

Asian Stocks on Course for Biggest Weekly Advance in Six Weeks

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Asian stocks pared their biggest weekly advance in six weeks, with Japanese shares dragged lower by a stronger yen.

The MSCI Asia Pacific Index declined 0.2 percent to 133.71 as of 9:01 a.m. in Tokyo, paring this week’s climb to 1.2 percent. The gauge posted the biggest daily jump in a month on Thursday amid optimism the Federal Reserve’s pace of tightening will be gradual, taking its rebound to 11 percent from a September low.

Japan’s Topix index slipped 0.4 percent, paring a fifth week of gains, as the yen held Thursday’s 0.6 percent advance. Governor Haruhiko Kuroda, who unleashed unprecedented monetary stimulus at the Bank of Japan in 2013 and doubled down on it last year, is done expanding his efforts, according to an increasing number of economists. He is due to speak on Friday.

Australia’s S&P/ASX 200 Index gained 0.1 percent and New Zealand’s S&P/NZX 50 Index advanced 0.6 percent. South Korea’s Kospi index added 0.1 percent. Futures on Hong Kong’s Hang Seng Index rose 0.1 percent and those on the Hang Seng China Enterprises Index added 0.2 percent.

Source: Bloomberg

Japanese Stocks Pare Weekly Rally as Stronger Yen Hits Exporters

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Japanese stocks fell, with the Topix index dropping for the first time in four days, as exporters slumped on a stronger yen with carmakers leading declines.

The Topix lost 0.4 percent to 1,594.31 as of 9:00 a.m. in Tokyo, trimming its advance for the week to 0.5 percent. About nine shares fell for seven that rose. The yen traded at 122.88 per dollar after gaining 0.6 percent on Thursday.

The Nikkei 225 Stock Average slid 0.4 percent to 19,773.78. The measure closed at its highest level since Aug. 20 on Thursday as it headed for a fifth straight weekly gain. The gauge has risen 13 percent this year, while still short of a high in June before China’s shock devaluation of the yuan roiled global markets.

E-mini futures on the Standard & Poor’s 500 Index lost 0.1 percent. The underlying gauge slipped 0.1 percent Thursday, after fluctuating throughout the day, as a profit warning from UnitedHealth Group Inc. led to a slump in the health-care sector and energy producers followed oil prices lower.

Source: Bloomberg