The commodity market continues to spark interest. Crude Oil has continued to trade lower with WTI highlighting the declines as it trades below 87.00 USD as of this writing. The fact that the U.S. is now producing more of its own energy is starting to have an impact on Middle East suppliers. Gold has also continued to trade lower and as of this morning is near 1376.00.
The USD has been stronger against the EUR, GBP, and AUD in the last twenty-four hours. The forex market will likely see some healthy range trading today and Friday with a wide swatch of news via quarterly earnings, political wrangling, and G-20 murmurings.
Equities have been negative, including the three major indexes on Wall Street. Quarterly earnings will continue from the States today and some of the companies reporting will be Blackstone Group, Google, Pepsico, and IBM. Europe is also getting some big corporate reports today, including the drinks company Diageo.
Europe’s economic data continues to spark negative sentiment. Spain today will hold a 10-Y Bond Auction. Italy will be in the spotlight politically today as a mandate to elect an acting President comes into effect. The winner and the round in which the leader is chosen will provide insight about Italy’s economic future regarding the manner in which it will manage its austerity measures and signal if and when a new election may be needed.
The G-20 meetings will get underway today and Europe is certain to be a central point of conversation along with Japan. The recession in Europe continues to put added pressure on the global economy and questions are bound to be asked about the current interest rate that the European Central Bank is using. Japan will face its critics who are not pleased about the devaluation of the JPY.
The U.S. will release the Philly Fed Manufacturing Index reading today. The Empire State Manufacturing Index published earlier this week missed its estimate by a wide margin. Investors will watch the outcome carefully and a miss combined with weaker than expected earnings reports would be a spur in the side of the equity markets. Weekly Unemployment Claims will also be brought forth.
The metals and energy sectors in commodities have both seen sharp declines. Speculators who have had long positions and been able to withstand the headwinds appear to be relenting and walking away from losing positions. Questions about demand have been abundant, but it appears that the combination of crumbling optimism among gold bugs among others is having an effect too. However, falling commodity prices in the long run may prove positive for consumer companies who will likely have lower costs to produce products and therefore create a greater profit margin.