US jobs, OPEC, ECB stimulus dominate markets... Weather creates opportunity in commodities...
US jobs, OPEC, ECB stimulus dominate markets
The European Central Bank announced another interest rate cut Thursday, with a drop of 10 basis points; it also announced an extension of its assets-buying program. However many in the bloc and further afield were disappointed that the rate cut was not sharper. The markets closed lower and are continuing to trade lower so far Friday.
Also in focus for the last session of the week is the latest US jobs report which is due at 8.30am ET. The data will be a major factor in the Fed’s interest rate decision when it meets Dec 15-16. The market is expecting a hike but the jobs data could affect the timing or size of the change.
Oil is also in sharp focus Friday with OPEC members meeting to discuss policy. Members may be prepared to curb production; many of the smaller nations are in desperate need of price rises; or at least there may be willingness to work with non-OPEC members to try to stabilize the market. However a major shift from existing policy is unlikely.
Asian equity markets have closed lower amid the ECB decision and ahead of the US jobs and OPEC news. Even positive retail sales data for Australia failed to lift Sydney into positive territory.
Toronto and Wall Street are set to open higher after losing in the previous session.
Weather creates opportunity in commodities
The Thomson Reuters commodities index has fallen by 20 per cent this year and metals and oil have certainly had a tough year however one sub-sector could present an opportunity. With the El Nino weather system set to cause disruption to supplies of soft commodities in the first part of 2016, Australian hedge fund Merricks Capital is buying crops such as wheat and soy beans together with palm oil as potentially good investments. Merricks’ CIO Adrian Redlich told the Sydney Morning Herald that Chinese demand for soft commodities is growing while metals and oil demand is lower.
The European Central Bank announced another interest rate cut Thursday, with a drop of 10 basis points; it also announced an extension of its assets-buying program. However many in the bloc and further afield were disappointed that the rate cut was not sharper. The markets closed lower and are continuing to trade lower so far Friday.
Also in focus for the last session of the week is the latest US jobs report which is due at 8.30am ET. The data will be a major factor in the Fed’s interest rate decision when it meets Dec 15-16. The market is expecting a hike but the jobs data could affect the timing or size of the change.
Oil is also in sharp focus Friday with OPEC members meeting to discuss policy. Members may be prepared to curb production; many of the smaller nations are in desperate need of price rises; or at least there may be willingness to work with non-OPEC members to try to stabilize the market. However a major shift from existing policy is unlikely.
Asian equity markets have closed lower amid the ECB decision and ahead of the US jobs and OPEC news. Even positive retail sales data for Australia failed to lift Sydney into positive territory.
Toronto and Wall Street are set to open higher after losing in the previous session.
| Latest | 1 month ago | 1 year ago | |
| North America (previous session) |
|||
| US Dow Jones | 17,477.67 (-1.42 per cent) | -2.46 per cent | -2.43 per cent |
| TSX Composite | 13,324.67 (-1.03 per cent) | -2.47 per cent | -7.91 per cent |
| Europe (at 6.00am ET) |
|||
| UK FTSE | 6,248.45 (-0.42 per cent) | -2.56 per cent | - 6.45 per cent |
| German DAX | 10,721.41 (-0.63 per cent) | -1.14 per cent | +8.83 per cent |
| Asia (at close) |
|||
| China CSI 300 | 3,677.59 (-1.91 per cent) | +1.35 per cent | +18.47 per cent |
| Japan Nikkei | 19,504.48 (-2.18 per cent) | +3.05 per cent | +9.04 per cent |
| Other Data (at 6.00am ET) |
|||
| Oil (Brent) | Oil (WTI) | Gold | Can. Dollar |
| 44.48 (+1.46 per cent) |
41.66 (+1.41 per cent) |
1061.00 (-0.02 per cent) |
U$0.7494 |
| Aus. Dollar |
|||
| U$0.7308 | |||
Weather creates opportunity in commodities
The Thomson Reuters commodities index has fallen by 20 per cent this year and metals and oil have certainly had a tough year however one sub-sector could present an opportunity. With the El Nino weather system set to cause disruption to supplies of soft commodities in the first part of 2016, Australian hedge fund Merricks Capital is buying crops such as wheat and soy beans together with palm oil as potentially good investments. Merricks’ CIO Adrian Redlich told the Sydney Morning Herald that Chinese demand for soft commodities is growing while metals and oil demand is lower.
