Gold Futures Cap Longest Rally in Six Months as Euro Plummets

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Gold futures capped the longest rally in more than six months as Switzerland™s decision to decouple its currency from the euro roiled currency markets, boosting demand for the metal as a haven.

The Swiss National Bank unexpectedly scrapped its three-year policy of capping the Swiss franc against the euro, one week before European policy makers meet to discuss new stimulus. The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, fell for a second day, fueling demand for bullion as an alternative asset.

Gold has risen 6.8 percent this year as signs of deflation and cooling global economic growth spur speculation that the Federal Reserve will be slow to raise U.S. interest rates. Demand for the metal will rebound in 2015 after two straight annual declines as consumption in Asia advances and investors return to exchange-traded products backed by bullion, according to HSBC Securities (USA) Inc.

Gold futures for February delivery surged 2.5 percent to settle at $1,264.80 an ounce at 1:44 p.m. on the Comex in New York, after touching $1,267.20, the highest since Sept. 8. Prices gained for a fifth straight session, the longest rally since June 25.

Source: Bloomberg

Oil Advances as OPEC Forecasts Slower Growth in U.S. Supply

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Oil advanced in New York and London after OPEC said that a slump in prices will start to erode U.S. supply growth this year.

West Texas Intermediate futures gained 1.7 percent in New York, erasing an earlier decline of 2.7 percent. The rate of U.S. supply growth will be slower than previously forecast, OPEC said, as companies curb drilling activity and cut spending plans. U.S. output surged to 9.19 million barrels a day last week, the fastest pace in weekly records dating back to January 1983, the Energy Information Administration reported yesterday.

Crude slid almost 50 percent last year, the most since the 2008 financial crisis, as the Organization of Petroleum Exporting Countries resisted calls to cut its output ceiling amid the U.S. shale boom, exacerbating a surplus estimated by Kuwait at 1.8 million barrels a day. Demand for OPEC crude will average 28.8 million barrels daily this year, the group said today in a report.

West Texas Intermediate for February delivery gained 80 cents to $49.28 a barrel in electronic trading on the New York Mercantile Exchange at 1:06 p.m. London time. The contract advanced 5.6 percent to $48.48 yesterday, the most since June 2012. The volume of all futures traded was more than double the 100-day average for the time of day.

Brent for February settlement, which expires today, climbed 71 cents, or 1.5 percent, to $49.40 a barrel on the London-based ICE Futures Europe exchange. The more-active March future added 78 cents to $50.64.

Source : Bloomberg

Asia Stocks Fall as Japan Shares Dragged Lower by Yen Strength

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Asian stocks fell, led by Japanese shares, after the yen and gold climbed as the Swiss central bank™s unexpected scrapping of its currency cap spurred a flight to haven assets.

The MSCI Asia Pacific Index declined 0.1 percent to 138.59 as of 9:00 a.m. in Tokyo, before markets opened in Hong Kong and China. Japan™s Topix index tumbled 1.6 percent as the yen traded near a one-month high at 116.22 per dollar, after gaining 1 percent yesterday. Futures on the Standard & Poor™s 500 Index dropped 0.5 percent.

Australia™s S&P/ASX 200 Index slipped 0.2 percent and South Korea™s Kospi index retreated 0.5 percent. New Zealand™s NZX 50 Index declined 0.1 percent.

Source: Bloomberg

U.S. Stocks Retreat as Banks, Oil Sink While Swiss Franc Surges

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U.S. stocks dropped a fifth day as banks fell on earnings and Apple Inc. led technology shares lower, while crude oil resumed its retreat. The franc soared against currencies globally as Switzerland ended its exchange-rate cap, roiling European markets and fueling gains in gold.

The Standard & Poor™s 500 Index was down 0.9 percent by 4 p.m. in New York, capping a five-day drop of 3.4 percent. Bank of America Corp. fell 5.2 percent on sliding trading revenue, as technology stocks fell the most among 10 S&P 500 groups. The Swiss Market Index slid 8.7 percent, while gauges in Germany and France rose at least 2 percent. The franc surged as much as 41 percent versus the euro to a record high. Ten-year Treasury yields sank 13 basis points as gold futures capped their longest rally in more than six months on demand for haven assets. Copper rebounded while U.S. oil declined 4.6 percent.

Citigroup Inc. and Bank of America joined JPMorgan Chase & Co. in reporting the worst combined quarterly trading revenue since 2011, sending a gauge of S&P 500 banks down 2.6 percent. U.S. wholesale prices fell the most three years and Americans unexpectedly filed more unemployment claims last week, data today showed. The Swiss National Bank scrapped the franc™s minimum exchange rate against the euro and deepened negative deposit rates, ending policy designed to shield the economy.

Source: Bloomberg

U.S. Stocks Fall as Banks, Best Buy Slump on Corporate Earnings

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U.S. stocks fell for a fifth straight day as banks and Best Buy Co. slid amid corporate earnings to overshadow gains in mining companies.

Bank of America Corp. and Citigroup Inc. fell at least 2.5 percent as both banks reported a drop in fourth-quarter profit as revenue from fixed-income trading declined. Best Buy tumbled 13 percent as the largest electronics retailer warned that price pressure and sluggish demand may hamper results in the coming year. A gauge of homebuilders plunged the most since July 2013. Newmont Mining Corp. jumped 7.9 percent as copper rebounded.

Equity futures fluctuated earlier in the day after Switzerland™s central bank unexpectedly gave up its minimum exchange rate.

The S&P 500 fell 0.4 percent to 2,003.10 as of 12:02 p.m. in New York. The Dow Jones Industrial Average lost 57.83 points, or 0.3 percent, to 17,369.26. Trading in S&P 500 companies was 32 percent above the 30-day average for this time of the day.

A decline in American retail sales combined with a slump in copper prices weighed on stock markets yesterday, causing the S&P 500 to have its worst start to the year since 2009. The benchmark gauge is down 2.5 percent over the past five days.

Source: Bloomberg