Crude Stayed Under Pressure Overnight

Crude Oil continued to stay under pressure in overnight trading on growing concerns over potential trading restrictions in the energy markets. Click here for a better understanding of the perceived problem surrounding oil speculation: CFTC Considers strict limits in energy trading. Snipped from the article:

“The CFTC’s hearings came amid dramatic changes in energy prices and the Obama administration’s call to limit exotic derivatives trading. Oil futures traded on the New York Mercantile Exchange jumped to almost $150 a barrel last year, only to fall back to below $40 this spring before rising again to $70.”

Another snip from the end of the article: ” Steven Strongin, managing director of Goldman Sachs, one of the biggest commodities traders, said last week in a Senate committee hearing that “attempts to regulate volatility have rarely — if ever — succeeded.” “Yet they often have unintended and significant consequences,” said Strongin.”

Crude is now trading at $65.69 down another $1.54 per barrel.

Precious metals are trading lower in sympathy. Silver is $13.65 down 13 cents. Gold is $2.00 lower at $936.00. Palladium slipped $2.00 to $260.00. \Platinum is off $10.00 and trading at $1189.00.

In the currency markets Euro traders seem to be keying off the Oil /Dollar relationship rather than today’s today’s U.S. economic data where Wall Street expects to see weakening in Durable Goods. Durable Goods are the more expensive items we purchase; such as furniture, appliances, and autos. Since they are expensive consumers’ willingness to buy them is closely correlated to their economic outlook and confidence. Wall Street expects to see a .6% decline compared to May’s surprising rise of 1.8%. As for the Euro, it is currently trading down another 35/100ths of U.S cent at $1.4134.

In the stock market the Dow ended with only a marginal decline of 11 points yesterday. The insignificant decline was surprising given the pronounced drop in consumer confidence. This morning the Dow is being called to open 24 points lower on anxiety in advance of this morning’s Durable Goods report. Traders are all but ignoring the freshly announced long term alliance between Microsoft and Yahoo.

In other matters; at 2pm eastern the Fed will release it’s monthly Fed Beige Book which is an anecdotal compilation of business conditions within the 12 Federal Reserve districts. This may cause some added volatility in the final hours of stock trading today.

Sell-Off in the Oil Futures Markets

The metals with the exception of Palladium closed broadly lower today in a knee jerk reaction to a sell-off in the oil markets and a sympathetic counter surge in the Dollar. To explain today’s events: It started with traders running for the exits in the oil futures markets in response to today’s Congressional hearing surrounding possible restrictions on oil speculation. Congress is putting on a full court press in an effort to stop the volatility in oil trading by limiting speculation. As a result speculators ran for cover. Crude Oil fell $1.48 per barrel to $66.90.

Currency traders pushed up the Dollar in sympathy with the decline in Oil. The Euro gave up it’s early session half cent gain then continued falling by 46/100ths of cent to it’s present level of $1.4169.

Metals traders got spooked pushing the metals complex lower in reaction. Silver closed at $13.78 off 25 cents. Gold fell $15.00 to $938.00. Palladium managed to end the session with a $2.00 gain at $262.00. Platinum dropped by $27.00 to $1189.00. Volume was moderately heavy.

Stocks turned lower today on mixed economic data and another barrage of bad corporate quarterly earnings results. As for the data; the Case Shiller Home Price Index clocked in with a smaller than feared price decline. Prices fell an average of 17.06%. The Street expected the drop to be 17.9%. That was the good news.

The bad news came when Consumer Confidence was reported at 46.6; worse than the estimate of 49. The one two punch of confidence and earnings has the Dow currently down 56 points with two hours left in the trading day. Tomorrow the calendar remains active with Durable Goods, the Weekly Oil Inventories, and the Fed Beige Book.

Dollar Currency Traders are Nervous

In the currency markets we find the Euro trading 59/100ths of U.S cent higher at $1.4274. Dollar traders are nervous in advance of today’s U.S economic data.

While the calendar is thin; it contains an important report in the form of Consumer Confidence for July. Economists are calling for a reading of 49; down a shade from June’s 49.3. Consumer Confidence is the overriding driving force behind consumer spending. Spending drives our economy. The slight deterioration is giving traders reason to pause.

Today’s economic calendar also carries the Case Shiller Home Price index for May where the estimate calls for home prices to be down by 17.9% compared to last month’s annualized decline of 18.2%. It’s another case of bad but better.

Metals are trading lower this morning Silver is $13.99 down 4 cents. Gold is $2.00 lower and changing hands at $951.00. Palladium is down 1 dollar at $259.00. Platinum is $1,214.00 down 1 dollar in overnight trading.

Over in the energy sector Crude oil is flat with the last trade at $68.27 off 11 cents. In the equities market stocks as measured by the Dow Jones Industrial Average ended yesterday with a marginal gain of 15 points. This morning the Dow looks 29 points lower.

Asian markets closed a shade lower with Europe in the process of following suit. In world matters Israeli officials warned of a possible strike against Iranian nuclear facilities. The comments were made during Secretary of Defense Gates’s visit to Israel.

On the domestic front it appears that the contentious Health Care Reform Bill will not be voted on before the pending Congressional recess.

Resurgance in the Dollar

The metals eased from the morning opening highs to close only a shade higher in New York trading. Traders were quick to move to the sidelines after both the Euro and Oil gave up their gains. A resurgence in the Dollar came on the coat tails of a stronger than expected New Home Sales report which clocked in at 384,000 units. Not only did we get an 11% jump in the number of new homes sold; prices were also solidly higher. As a result the Euro slipped to the current level of $1.4215 down 15/100ths of a cent versus our Greenback.

Metal traders decided to lighten up on positions. Silver finished the day at $14.03 up 16 cents. Gold closed unchanged at $953.00. Palladium closed with a $2.00 gain at 260.00. Platinum closed at $1215.00. up $25.00.

Trading volume was moderate. Crude Oil took it’s cue from the Dollar as well as some negative technical trading commentaries. Crude is presently up a mere 10 cents at $68.16.

Over in the stock market the Dow has also turned negative over nervousness surrounding this week’s large U.S treasury auction along with only mixed corporate earnings results. Last on the Dow 9069 down 23 points.

With today’s positive home sales report behind us; traders will now focus in on tomorrow’s Case Shiller Home Price Index along with a fresh look at Consumer Confidence. In the morning I’ll have the latest estimates along with any overnight global developments.

USD and EURO Held gains Against the Yen on Friday

Gold is 952.00 down 3 dollars Silver is trading now at 13.80 unchanged Platinum is 1,175 down 5 dollars and the Euro is now 142.40.

The dollar and euro held gains against the yen on Friday, after rising the previous day as upbeat U.S. corporate results and housing data fueled optimism about the economy and dented safe-haven demand for the Japanese currency.

U.S. stocks surged on Thursday, driving the Dow industrials above the key 9,000 mark for the first time since January, as strong corporate profits and rebounding home sales spurred optimism about the economy.

Gold prices are quiet on Friday but were off a six-week high hit the previous day, with investors eyeing the dollar and stocks for direction as growing recovery hopes fuel inflation concerns and boost bullion’s hedge appeal.

DATA EVENTS expected on Friday:

ECON
- German PMI flash estimates for July.
- Euro zone PMI flash estimates for July.
- German IFO survey for July.
- UK Q2 GDP.
- Reuters/University of Michigan Surveys of Consumers final July consumer sentiment.
- U.S. Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke testify.

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