FXS: The Yen rose against higher-yielding currencies such
Forex – The Yen rose against higher-yielding currencies such as the Australian and New Zealand dollars as signs a global economic slowdown is deepening increased demand for safer assets.
Japan’s currency appreciated against 13 of its 16 major counterparts after a euro-area report showed manufacturing contracted in August and after similar data showed factory output shrank in China. Australia’s dollar fell to a five-week low versus the greenback after retail sales declined. Federal Reserve Chairman Ben S. Bernanke said last week a third round of bond purchases, or quantitative easing, shouldn’t be ruled out.
A gauge of manufacturing in the 17-nation euro area was 45.1 last month from 44 in July. A Chinese purchasing managers’ index of manufacturing compiled by HSBC Holdings Plc and Markit dropped to 47.6 for August, from 49.3 in July, a report showed.
The U.S. currency has fallen 0.7 percent in the past month, according to Bloomberg Correlation-Weighted Indexes. The yen dropped 0.6 percent, and the euro rose 1 percent.
Australia’s dollar declined to a five-week low as the government said retail sales dropped the most in almost two years in July. The so-called Aussie also slid to its weakest in more than a month against the yen after manufacturing shrank in China, the nation’s largest trading partner.
Indices – U.S. stocks fell for the second straight week as evidence of a slowing global economic recovery overshadowed speculation that the Federal Reserve may introduce new stimulus measures.
Benchmark U.S. equity indexes rose in August for the third straight monthly advance as the U.S. central bank pledged to act to safeguard the economic recovery if needed and European leaders worked to tame the region’s debt crisis. The S&P 500 in August climbed to its highest level on an intraday basis in more than four years, then failed to close at that milestone. Trading has slowed toward the end of the summer as investors awaited the Fed’s gathering in Wyoming. Volume on exchange-listed stocks was below 5 billion shares for five straight days through Aug. 30, the longest stretch since at least 2008, excluding Christmas and New Year holidays.
Trading has slowed toward the end of the summer as investors awaited the Fed’s gathering in Wyoming. Volume on exchange-listed stocks was below 5 billion shares for five straight days through Aug. 30, the longest stretch since at least 2008, excluding Christmas and New Year holidays.
Commodities beat equities, bonds and the dollar for a second consecutive month, the longest streak in more than a year, on mounting speculation policy makers will seek to rescue their economies.
Gains in riskier assets show investors expect policy makers will succeed in bolstering growth. The Federal Reserve and European Central Bank are already holding borrowing costs at a record low, and more than two-dozen nations cut market interest rates this year. China has slowed for six quarters, the 17- nation euro area is contracting, and consumer confidence in the U.S. fell the most in 10 months in August.
Raw materials entered a bull market last month after rising more than 20 percent since mid-June, erasing this year’s losses. They last beat every other asset for two months in March and April 2011. Silver futures added 13 percent last month, the most since January, as holdings through exchange-traded products advanced for a fourth month, data compiled by Bloomberg show. Investors buy silver both as a hedge against inflation and as a bet on a stronger economy because 53 percent is used in industrial applications from televisions to batteries.
Crude Oil – Crude oil closed higher on Friday due to short covering as it consolidated some of this week's losses. Oil dropped from the highest closing price in almost two weeks as manufacturing unexpectedly contracted in China and crude production resumed in the Gulf of Mexico after Hurricane Isaac.
Futures fell as much as 0.5 percent in New York after the biggest monthly gain since October. China’s Purchasing Managers Index shrank for the first time in nine months in August, a government survey showed Sept. 1. A separate measure by HSBC Holdings Plc and Markit Economics today showed the fastest contraction since March 2009. China is the world’s second biggest oil user. About 72 percent of daily crude output in the Gulf of Mexico is shut, from as much as 95 percent last week, the U.S. Bureau of Safety and Environmental Enforcement said. Brent oil for October settlement decreased 37 cents to $114.20 a barrel on the London-based ICE Futures Europe exchange. Production among the Organization of Petroleum Exporting Countries slipped 75,000 barrels to an average 31.988 million barrels a day last month from a revised 32.063 million in July, according to a Bloomberg survey of oil companies, producers and analysts. Output in Iran fell 350,000 barrels to 2.75 million barrels a day, the lowest level since February 1990. Saudi Arabia, the biggest producer in OPEC, pumped 9.9 million barrels a day, unchanged from July.
Natural Gas – Natural gas closed higher due to short covering on Friday as it consolidated some of the decline off July's high.
U.S. natural gas production fell in June as Tropical Storm Debby prompted some wells to shut in the Gulf of Mexico, the Energy Department said.
Output decreased 0.2 percent, to 72.37 billion cubic feet a day from a revised 72.55 billion in May, which the highest in four months, the department’s Energy Information Administration said in the monthly EIA-914 report, released today in Washington. It was the first drop in three months.
The biggest decline was in the Gulf, caused partly by “shut-ins due to Tropical Storm Debby,” the department said. Production also fell in Texas, Oklahoma and Wyoming.Higher output in states home to major shale plays, such as the Marcellus in the Northeast and the Haynesville in Louisiana, made up for some of the declines.Total U.S. production, including Alaska, dropped 1.1 percent to 80.80 billion cubic feet a day from a revised 81.67 billion in May. Gulf output dropped 6.8 percent to 4 billion cubic feet a day.
