Month: October 2012

By Central Bank News
    The central bank of Thailand cut its policy rate by 25 basis points to 2.75 percent, surprising financial markets, to shore up domestic demand and counter any drag from the global economy which the Bank of Thailand (BOT) described as weak and fragile.
    The BOT said its Monetary Policy Committee voted by 5 members to 2 members to cut the policy rate, which last was cut in January this year and November 2012.
    “With upside risk to inflation contained, the majority of MPC members deemed that monetary policy easing was warranted to shore up domestic demand in the period ahead and ward off the potential negative impact from the global economy, which remained weak and fragile,” the BOT said in a statement.
    Last week the bank’s governor, Prasarn Trairatvorakul, had told Bloomberg in Tokyo that there was no real need to cut rates as credit growth was rising while domestic demand was strong enough to counter the slowdown in exports from weaker international demand.
    He also said confidence in Thai financial markets remained quite high but the central bank would take action if businesses started to suffer from the decline in exports.
    The BOT said the Thai economy continued to expand in the third quarter although the impact of softer global demand on exports had become more apparent.
    Despite a weak global economic outlook, the BOT said policy easing in major economies was supporting global financial market sentiment and there was some improvement in US housing and labor markets. But fiscal risks in the U.S. and resolution of the debt crises in Europe continued to pose significant risks to the outlook.
    The central bank expects the global economy to gradually improve in 2013 but added “the substantial degree of uncertainty surrounding the outlook could hamper exports.”
    It added that domestic spending and investment remain robust but was starting to moderate as expenditures linked to last year’s flood tapered off.
    “Credit growth to the private sector remained high and warranted closer monitoring, while inflationary pressure stabilised at an acceptable level,” the BOT said.
    Thailand’s headline inflation jumped to an annual rate of 3.4 percent in  September, but core inflation only rose by 1.9 percent, within the bank’s target range of 0.5 to 3.0 percent.
     The BOT has forecast consumer price inflation of 2.9 percent this year and the government has said the rate was 2.94 percent for the first nine months while the core inflation rate was 2.19 percent.

    The central bank has forecast growth of 5.7 percent this year and 5.0 per cent in 2013.
    www.CentralBankNews.info

By MoneyMorning.com.au

The stock market is continuing its upward march.

I almost feel like the boy who cried wolf after watching US equity markets jump over 2% in the last two trading days.

But I remain firm in my view that a weekly close under 1422 in the S+P 500 will be the catalyst for much further downside.

Let me explain why…

Last week I wrote:

‘If we look at where the S+P 500 is currently you’ll notice that it’s trading above the high made in April this year of 1422. I have been talking about this level for quite a while now and I still believe that a failure below this level could spell some serious trouble for the S+P 500.’

I think it’s interesting to note that that comment was written when the S+P 500 was at 1440. Over the next few days the S+P 500 sold off to a low of 1425 (just 3 points above the key level) and then bounced back to where it is now at 1455:

S+P 500 Daily Chart

Click to enlarge

So the key level of 1422 has held. For now.

The fact that the stock market bounced from 1425 has actually added to my conviction that the next test of this level could see a sharp move to the downside. Think of it like shaking up a coke bottle. The more you shake it up the higher the energy release when the bottle is finally opened.

But the situation is such that I need to wait for this confirmation before acting aggressively from the short side. The intermediate trend is still up because the 10 day moving average is holding above the 35 day moving average. While that remains the case higher prices are possible.

But be careful.

Trading volumes in the Australian stock market remain nothing short of pathetic at around $3.5 billion a day, when I would usually expect to see levels above $6 billion.

The institutional traders are not convinced by this rally and they’re not chasing it higher. If the big end of town is sceptical that this rally has legs then I think you should remain a little sceptical too.

But I do have to say I remain in awe of the ability of the central bankers to keep asset prices rising. I have been a bear for many years and I have consistently called each correction in the stock market over the past few years. The only thing is the market blindsides me by quickly shrugging off bad news and marching higher to the beat of the US Feds drums.

These volatile moves have forced stock market bears into hibernation. 90% of hedge funds are currently underperforming the S+P 500. That means 90% of the smartest guys in the room are not able to beat the market index. That’s quite a shocking figure.

People who have been analysing markets for years are left scratching their head while equity markets go in the opposite direction to most macroeconomic figures. This situation can’t go on forever. But John Maynard Keynes said it best when he noted that markets can stay irrational longer than you can stay liquid.

My gut feeling after watching and trading in markets for twenty years is that we’re very close to a multi-month market top. We may see another few weeks of upside before turning back down, but the line in the sand remains 1422 in the S+P 500.

So Where Will the Selling Come From?

I’m not sure what the catalyst will be for the selling to begin, because we remain firmly in the twilight zone where good news is good news and bad news is better.

The stock market just can’t wait for Spain to ask for a bailout. Every time a rumour begins that Spain will admit it is bankrupt the stock market rallies! Can you imagine that being the case a few years ago?

Perhaps we need the whole world to go bankrupt so that the markets will go through the roof!

I suspect that a Spanish bailout is already priced in to their bond market, since rates have fallen so dramatically of late. Everyone wants to front run the ECB into buying Spanish debt so they can offload their holdings onto the ECB for a profit.

Perhaps an initial rally in Spanish bonds after a Spanish request for a bailout will quickly reverse into a major sell-off as every man and his dog offers their bonds to a money printing ECB. Unlimited bond buying equals unlimited money printing. Just like their friends at the US Fed.

Gold will probably start to catch a strong bid in these circumstances.

Also we should keep our eyes on the situation in Greece. It looks like a meeting between Troika officials and Greece’s Labor minister Yiannis Vroutsis have broken down for a second time in a matter of days.

The Guardian Eurozone crisis running blog stated that:

‘A second meeting between the heads of the EU-IMF troika mission in Athens and Greek Labour Minister Yiannis Vroutsis on Tuesday afternoon ended abruptly a few minutes ago, after the two sides hit deadlock for the second time in the same day.

‘Sources in the labour ministry cited “complete disagreement” between the two sides on the issue of three-year wage maturation periods. They said that the labour ministry had been prepared to continue the talks but the representatives of Greece’s creditors had departed.’

I’m sure the current negotiations are just a bit of argy bargy and a compromise will be reached before the wheels fall off, but you never know.

The Poor Pay While the Rich Evacuate

As an aside I think it is scandalous that the lowest paid Greeks are being forced to take huge pay cuts to try and bring the books back into balance while the very wealthiest Greeks have siphoned off billions of dollars to foreign countries.

I have no qualms about people getting their money out of the country but it’s a bit rich when the wealthy have been declaring annual income to the tax department of less than 30,000 euros while transferring over 50 million euros abroad, as one individual did.

The politicians have got in on the act as well. As Spiegel online reported:

‘Greek tax authorities are currently investigating the assets of some 60 politicians, and the probe apparently extends beyond suspicions of tax evasion alone. The speaker of the Greek Parliament, Evangelos Meimarakis — a member of the governing conservative Nea Dimokratia, or New Democracy party — recently stepped down due to corruption allegations, and he is not the only one implicated. A number of high-ranking former ministers are also suspected of involvement in sham transactions and money-laundering schemes.

‘Corruption allegations still don’t necessarily interfere with a political career in Greece, as exemplified by the case of the former prefect of Thessaloniki, Panagiotis Psomiadis. He allegedly personally received nearly €1 million for public works projects that were never built. Psomiadis is also suspected of being connected with a mafia ring of loan sharks. None of this has apparently damaged him. In May, Prime Minister Samaras made him his election campaign organizer for northern Greece.’

The above quotes were taken from Mish’s Global Economic trend analysis website.

So as always of late there are plenty of issues that can derail the current stock market rally, and you can never guess beforehand what the reason will be. But the charts are right in the sell zone so I’ll continue to tread very carefully.

Murray Dawes
Editor, Slipstream Trader

From the Port Phillip Publishing Library

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The Stock Market is Up, What’s Next?

By MoneyMorning.com.au

America’s central bank, the Federal Reserve, will eventually destroy the world economy, says respected Swiss investor Marc Faber.

The only consolation is that its crazy policies give investors an easy way to get rich.

In an interview with Bloomberg, shortly after the Fed launched its third bout of quantitative easing (QE), the 66-year old Faber warned that ‘eventually we will have a systematic crisis and everything will collapse’.

QE damages the economy and creates bubbles, says Faber. ‘There is a huge misconception and fallacy that money printing can actually improve the rate of employment because the money flows down into the system.’

But what really happens, says Faber, is that the extra money ‘goes first into the banking system and into financial institutions, into the pockets of well-to-do people’.

Another side effect of QE is ‘increased government involvement in the economy and we have the government growing with its regulation and legislation that stifles economic development’.

More Money Printing a Certainty

Faber, who writes the Gloom, Boom and Doom newsletter, believes that more money printing is a certainty. Even if Ben Bernanke – the Federal Reserve chairman – was to leave, his replacement would also be a ‘money printer’ while central banks in other parts of the world are just as bad.

‘The Europeans will print money. The Chinese will print money. Everybody will print money and the purchasing power of paper money will go down.’

The plus side of all this, says Faber, is that it is easy for investors to back the right assets. He thinks ‘equities are a better space to be in than bonds’, and within equities he favours the cheapest.

‘I bought equities in Portugal, Spain, Italy and France because they were unbelievably distressed.’ He also thinks the Chinese stock market looks depressed. But he warns investors to steer clear of America noting that it ‘has massively outperformed European markets [and] Asian markets’.

Gold should be another beneficiary, says Faber. ‘That the trend for gold prices will be steady, but the trend for the dollar and other currencies will be down. In other words, in dollar terms the price of gold will trend higher. How high it will go? You have to call Mr Bernanke.’

James McKeigue

Contributing Writer, Money Morning 

 Publisher’s Note: This article originally appeared in MoneyWeek

From the Archives…

The Biggest Graphite Find in Decades Comes With a Catch

12-10-2012 – Dr. Alex Cowie

Don’t be Fooled by Banker’s Remorse

11-10-2012 – Kris Sayce

Why the Australian Stock Market Could Fall 400 Points in ‘Weeks’

10-10-2012 – Murray Dawes

Why the Hunt for Strategic Minerals took me to Holden in Port Melbourne

09-10-2012 – Dr. Alex Cowie

What’s so Important about Gold?

08-10-2012 – John Stepek

Marc Faber: The Fed will Destroy the World

By Central Bank News
Here’s today’s Central Bank News link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news.

GBPUSD is facing the resistance of the downward trend line on 4-hour chart, a clear break above the trend will indicate that the downtrend from 1.6309 has completed at 1.5976 already, then further rise towards 1.6309 previous high could be seen to follow. On the downside, as long as the trend line resistance holds, the rise from 1.5976 would possibly be consolidation of the downtrend from 1.6309, and one more fall to 1.5900 is still possible.

Daily Forex Forecast

By OilPrice.com

Following record droughts across the United States the benefits of the ethanol subsidy were once again hotly debated and biofuels in general found themselves generating quite a few unflattering headlines. But as always the mainstream media overreacted and we wanted to help put the record straight as to whether biofuels are an expensive folly or if they really do offer an affordable source of liquid fuel that can help us lower our reliance upon gasoline.

To help us look at these issues and much more Oilprice.com spoke with Jim Lane, theEditor & Publisher of Biofuels Digest.

In the interview, Jim discusses:

• Why there will be a massive drop in gasoline demand.
• Which biofuels hold the most promise for the future.
• Investors should be looking at marine biofuels.
• The truth behind the Air Force paying $59 per gallon of jet fuel.
• Which biofuel companies investors should be keeping an eye on.
• Why electrofuels are such an exciting opportunity.
• Why peak phosphorus is a major concern.

Interview by. James Stafford of Oilprice.com

James Stafford: The drought across the U.S. has led to many pundits predicting a second ethanol crash due to the under supply of feedstock like corn. Some estimates say that the US will likely lose nearly 40% of its corn crop, and possibly more, which means that the price of corn will continue to rise. How do you see the situation developing in the U.S. for ethanol producers?

Jim lane: The global corn crop this year was the 2nd biggest ever, and the US crop the 8th biggest. Whatever disruptions that will occur are already priced in – we’ll continue to see lower production levels from US producers, but that will likely bring down ending stocks rather than cut into sales.

James Stafford: Where do you stand on the debate over the RFS?

Jim lane: The industry favors maintaining RFS2 in its current structure. Here in Digestville we see the new 54.5 mpg CAFE standards creating a massive drop in gasoline demand. That’s going to put intolerable pressure on RFS2 in our view. We’d rather see either state or federal public utilities for fuel – keeping a free market in supply and demand but having the utility in place to provide long-term supply contracts for renewables. Offtake contracts offer better source of financeable stability for advanced biofuels, in our view.

James Stafford: What is your favourite source of biofuel? There have been numerous articles and reports released about potential super biofuels such as Agave, Jatropha, Sorghum, switchgrass, etc… Which do you think hold the most promise for the future?

Jim lane: It comes down to what is best for that locale – most cost effective and sustainable. It will vary. Having said that, marine biofuels looks interesting (e.g. seaweed) and direct conversion of brackish water, sequestered CO2 and water into biofuels are very exciting to contemplate.

James Stafford: Are there any new technologies/developments taking place that people may not be aware of, which stand a real chance of transforming the biofuels sector?

Jim lane: The aforementioned direct conversion technologies. Plus, electrofuels – which are similar but use electricity as an energy source rather than sunlight.

James Stafford: World rock phosphate production is set to peak by 2030. Since the material provides fertilizer for agriculture, the consequences are likely to be severe, and worsened by the increased production of biofuels. Do you see phosphate shortages as a threat to the biofuel industry?

Jim lane: Phosphorus is a material necessary to make the backbone for DNA, so it’s a real concern if not addressed – and even if fertilizers are sourced elsewhere. Recovering and aggregating other sources of phosphorus is a must.

James Stafford: Biofuels are well known for using a great deal of energy in their production – could you talk a little about the energy returns from the different types of biofuels?

Jim lane: I think you are referring to first-gen biofuels. Cellulosic biofuels offer 8-1 and 9-1 net energy returns. Passive algae farming offers even more.

James Stafford: Which biofuel companies should investors keep an eye on in the future?

Jim lane: The cellulosic biofuels companies like INEOS Bio and Mascoma are just now commercially deploying – right after that is a generation of thermochemical technologies like KiOR. After that, post-biomass companies like Joule are going to be heading for scale.

James Stafford: In a recent article we covered sweet sorghum as a biofuel investors should keep an eye on as the Environmental Protection Agency (EPA) prepares for its final approval of the grain for ethanol production. Unlike corn, it does not compete with food crops, while environmentally, its footprint is rather small. What are your thoughts on sweet sorghum?

Jim lane: It’s an excellent rotation crop with sugarcane, highly suitable for Brazil for example – it can grow during the off-season for cane.

James Stafford: What is the environment like for biofuel investments? What biofuels are receiving the most investment and which countries are the biggest investors.

Jim lane: All sectors have been doing pretty well of late, though companies that make intermediates have market flexibility and have been doing especially well. Ditto for those who can make chemicals as easily as fuel. US by far is the biggest investor, though China is coming along.

James Stafford: An innovative study by Zah et al. which was commissioned by the Swiss government found that most (21 out of 26) biofuels reduce greenhouse-gas emissions by more than 30% relative to gasoline. But nearly half (12 out of 26) of the biofuels—including the economically most important ones, namely U.S. corn ethanol, Brazilian sugarcane ethanol and soy diesel, and Malaysian palm-oil diesel—have greater aggregate environmental costs than fossil fuels. How do you respond to this?

Jim lane: We need more data and less assumption-based modeling. It all comes down to how you count indirect land-use change. The models are hugely sensitive to untested assumptions. What is needed is a credible data-set of land use, and a model that can predict real outcomes.

James Stafford: What is your opinion on electrofuels? Do you believe that they are the future of biofuels?

Jim lane: They are a fascinating opportunity to get around the limitations and inefficiencies in photosynthesis. Right now we are going through a promising round of investments from ARPA-E – we’ll have to wait and see if the data looks good.

James Stafford: Do you believe that the new process developed by researchers at the Michigan State University, which claims to increase the energy recovered from corn in the production of ethanol by 2000%, could prove a hero of the biofuel industry and see its rise to become a major source of transportation fuel?

Jim lane: I doubt there will be much more corn ethanol capacity building.

James Stafford: A lot of people are talking about algae biofuels and how researchers should be focusing their attention here. A recent study put out by the respected energy research firm SBI predicts a compound annual growth rate of 43.1% and a $1.6 billion market in 2015 for algae biofuels. That is double digit growth for the emerging industry. What are your thoughts on algae biofuels? Should more research be focused on algae than crops like corn, sorghum, switchgrass, etc..?

Jim lane: The DOE has a funding opportunity next year focused on algae yields, and that’s welcome, and for now that is what is needed. With respect to other feedstocks – they all deserve research on stress tolerance, pest resistance, and yield improvement .

James Stafford: Some start-up companies are abandoning biofuels and are instead using the same processes to make higher-margin chemicals for products such as plastics or cosmetics. Do you see this as a growing trend amongst biofuel producers?

Jim lane: The poorly-financed ones will have to go this route – and why not? It’s all the same barrel of oil they are replacing, whether it is the top of the barrel, economically, or the bottom.

James Stafford: The US Navy recently paid $26 a gallon for the biofuel it used in the RIMPAC exercises, and the Air Force paid $59 a gallon. What are your thoughts on such extravagant spending?

Jim lane: They need to test and certify the fuels, and the quantities are small. Remember, they need marine military spec fuel, this isn’t stuff you can draw off the same pump used for land transport. If you ordered the same quantity of fossil fuels, it would cost the same as they are paying for advanced biofuels. When it goes to commercial volume, the costs will be the same as fossil fuels.

James Stafford: Do you believe the shale revolution and improvements in oilfield extraction technologies will affect investments in biofuels?

Jim lane: Two things we are already seeing. There’s a tremendous uptick in interest in GTL/biofuels and CTL/biofuels mixes – where you get the price attributes from the one and environmental attributes from the other. We’re also likely to see more effective distribution of CO2 for enhanced oil recovery, and that’s a feedstocks delivery system for biofuels as well.

James Stafford: Jim, thank you for taking the time to speak with us.

Source: http://oilprice.com/Interviews/Which-Biofuels-Hold-the-Most-Promise-for-the-Future-Interview-with-Jim-Lane.html

By. James Stafford of Oilprice.com

By Central Bank News

    The boost to financial markets from extraordinary central bank liquidity may not continue if economic fundamentals do not ultimately improve, warned Mark Carney, governor of the Bank of Canada.
    Investors should not be lulled into complacency by the low level of the VIX – a standard measure of market volatility – as a synchronous slowdown is under way in the global economy and financial markets could suddenly turn volatile.
    “The dampening effect of central bank action may not persist if economic fundamentals do not ultimately improve, meaning that there could be a discontinuous shift in volatility at some point in the future,” Carney said in a speech in British Columbia on Oct. 15.
    “Paralysis, not confidence, may better account for the observed declines in actual and implied volatility. This apparent lack of conviction in markets can itself be considered a sign of unusual levels of uncertainty,” he added.
    But while there are real reasons for the deep sense of uncertainty and angst in financial markets, Carney said this should not dictate public policy and the world is in a much better place than 80 yeas ago when Franklin D. Roosevelt told Americans that “the only thing we have to fear is fear itself.”
    “Nonetheless, the spirit of FDR’s comment applies―we must take care not to allow uncertainty to dominate our actions, letting profitable opportunities slip away and, more generally, compounding the very real, but still manageable, challenges facing the global economy,” Carney said.
    In addition to his role as Bank of Canada governor, Carney is also chairman of the Financial Stability Board (FSB), a body that monitors and advises on global financial stability.


    One of the triggers of uncertainty over the global economic outlook is the unfamiliar process in advanced economies of repairing public and private balance sheets. This process is hampering global growth and exposing the challenges facing policy makers, whether in the U.S. or Europe.
    Concern over how these policy-makers will address these challenges triggers additional uncertainty, prompting firms and consumers to retrench, slowing growth further.
    “Thus, the current combination of economic weakness and heightened uncertainty may be forming a vicious circle in the global economy,” Carney said.
    While it is that clear uncertainty has real economic effects, the precise impact is not clear.
    Researchers at Stanford have estimated that the rise in policy uncertainty between 2006 and 2011 reduced the level of real U.S. GDP by approximately 3 per cent and was associated with a loss of about 2.3 million jobs.
    And at the Bank of Canada, researchers estimate that the increase in policy uncertainty observed since the re-intensification of the euro- area crisis late last year may have lowered the level of euro-area GDP by roughly 1 per cent, Carney said.
    Among the steps policy makers in Europe can take to reduce uncertainty is tell citizens that solving the debt crises will take several reforms over a 3 to 5 year period, not just one single summit meeting.
    “By reframing expectations to a realistic timeline, and ensuring that any financing assistance program for countries is sufficient for this period, European authorities could arrest the cycle of crisis summits, and thereby reduce policy uncertainty,” Carney said.
    In the U.S., Carney said there is evidence that uncertainty surrounding the resolution of the so-called fiscal cliff is already having an adverse impact, pointing to a 26 percent drop in new orders for capital goods over the past three months, the area one would expect to see the greatest impact of uncertainty.
    While he acknowledged the need to reduce public debt, he added that American households have recovered more than two-thirds of the $16 trillion in net worth lost in the financial crises, U.S. banks had increased capital and corporate balance sheets were strong.
    But aggregate U.S. debt has not budged much from its peak of about 250 percent of Gross Domestic Product as the burden of deleveraging has been transferred from the private to the public sector.
    The Bank of Canada assumes that the U.S. will step back from the fiscal cliff, bu there will still be some fiscal tightening that reduces growth and maintains the pressure for further debt reduction.
     “A clear, consistent and committed medium-term U.S. fiscal plan, one that demonstrates how this consolidation will be achieved, would be helpful in mitigating a major uncertainty that would otherwise endure.
    www.CentralBankNews.info

London Gold Market Report
from Ben Traynor
BullionVault
Tuesday 16 October 2012, 08:15 EDT

SPOT MARKET prices to buy gold regained some ground Tuesday morning after dropping to a one-month low below $1730 per ounce, gold’s lowest level since the US Federal Reserve announced open-ended quantitative easing last month.

Gold prices rose to $1743 per ounce ahead of US trading, while stocks and the Euro also rallied following news that suggested Spain is prepared to request a bailout.

“We see resistance [for gold] now at $1758 with risk for a deeper downside move,” says Russell Browne, technical analyst at bullion bank Scotia Mocatta.

“Longer term [however],” adds Commerzbank technical analyst Axel Rudolph, “gold will remain in its multi-year uptrend while staying above the $1522 December low.”

Bullion holdings backing the world’s biggest gold ETF SPDR Gold Shares (GLD) fell back from record highs yesterday, dropping 6.6 tonnes to 1333.9 tonnes.

Silver prices meantime climbed back above $33 an ounce shortly before the US opened, while other commodities were broadly flat and US Treasuries fell.

Spain is prepared to ask for a bailout from the European Stability Mechanism, although it does not need financial aid and would make the request in order to enable the European Central Bank to start buying its bonds, according to a senior Spanish government official quoted by the Financial Times.

A condition of the ECB’s Outright Monetary Transactions program is that beneficiary nations have entered into a bailout program and agreed to deficit reduction measures before the central bank will buy its bonds on the secondary market.

“The credit line is not fundamental,” the Spanish official told the FT.

“It is circumstantial.”

Spanish prime minister Mariano Rajoy is employing “a very risky strategy” by delaying a request for a bailout in the hope of securing better conditions, says economist Jose Garcia-Montlavo at Barcelona’s Pompeu Fabra University.

“[Rajoy thinks] the worse it gets, the better for Spain…[as it] would make the Germans think more deeply about the cost of letting the southern countries sink.”

“If I was his adviser I’d strongly, strongly suggest changing tack,” says Citigroup economist Ebrahim Rahbari.

“If there’s something inevitable and painful it’s very rare that it pays off in a rational way to defer.”
Yields on 10-Year Spanish bonds have climbed higher since the start of Monday, reversing falls seen last week.

Elsewhere in Europe, the official Eurozone inflation rate remained steady at 2.6% last month, according to consumer price index (CPI) data published Tuesday.

Here in the UK, consumer price inflation fell to its lowest level in almost three years in September, falling to 2.2%, official figures published this morning show.

“The majority of the downward pressure to the change in the CPI came from the housing and household services sector,” says the official release from the Office for National Statistics, “with September 2011’s utility bill rises falling out of the index calculation.”

“[Inflation] could be pushed back above 2.5% in the near term,” says Howard Archer, economist at research firm IHS Global Insight, adding that food, utilities and petrol prices are likely to rise.

Royal Bank of Scotland meantime has suspended its head of rates trading for Europe and Asia, Jezri Mohideen, as part of its probe into allegations of Libor rigging, according to press reports Tuesday.

Mohideen is the most senior RBS employee to be suspended as part of the Libor investigation, the reports add.

Over in India, traditionally the world’s biggest gold buying nation, bullion importers reported increased activity after gold fell through $1740 per ounce yesterday.

India Post meantime announced a 7% discount on gold coins bought from post offices Tuesday, to celebrate the festivals of Dussehra and Diwali.

“For millions of gold lovers, this initiative provides an opportunity to buy gold during these auspicious days at reduced costs,” says Amresh Acharya of the World Gold Council, which partners with India Post and Reliance Money Infrastructure to offer the gold coins.

The discount will stay in place until December 31. India Post ran a similar promotion last year.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben writes and presents BullionVault’s weekly gold market summary on YouTube and can be found on Google+

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By TraderVox.com

Tradervox.com (Dublin) – Safety remained diminished in the market as signs of improvement in China and speculation of progress in the euro region increased the demand for riskier assets. The US dollar and the Japanese currency were weakened against most peers as commodity related currencies increased in demand. The increased risk demand came prior to European Union meeting this week. The leaders are expected to discuss measures that will help contain the fiscal turmoil in the region. The yen and dollar were lower against the Australian dollar after falling last week following the release of economic data in China, which showed improvement in exports.

According to Janu Chan, an Sydney-based economist at St. George Bank Ltd, euro region sentiment have improved following speculation that EU Summit will come up with solutions to the crisis in Greece and Spain. In addition, Janu pointed out that following the stronger than-expected Chinese export data, investors are confident that the slowdown in Chinese economy is stabilizing. The yen and dollar remained down as the EU leaders meet in Brussels on October 18-19. During the weekend, international finance chiefs signaled signs of improvement and confidence in the firewall put in place to deal with the crisis in Europe. The IMF had indicated that the world is on the verge of recession if the US and Europe does do not do more to improve their economies.

China’s Custom Administration released a report on October 13 indicating that overseas shipments rose by 9.9 percent last month from a year earlier. The market was expecting a 5.5 percent increase. The market is now turning its focus on the October 18 release of Chinese third-quarter growth data. The US dollar started the week at $1.2949 per euro at the start of trading in Tokyo yesterday after it fell by 0.2 percent to $1.2951 on Friday last week. The greenback was trading at 78.45 against the yen. The Japanese currency was exchanging at 101.56 yen per euro after it fell by 0.3 percent on Friday to trade at 101.61.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

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Article by AlgosysFx Forex Trading Solutions

Increasing signs of a US economic comeback are foreseen to incite risk appetites today, weakening the US dollar in turn. Yesterday, the US Commerce Department reported that improved confidence has stimulated Americans to shop more last month. Today, reports are foreseen to reveal that consumer prices edged up in September, the housing market sustained its improvement and industrial output recovered modestly.

Retail Sales in the US increased at a faster rate than forecast last month in a healthy sign that consumer optimism is on a high heading into the year-end holiday shopping season. Purchases advanced by 1.1 percent in September, easily beating forecasts of a 0.7 percent rise. Meanwhile, sales in August were revised higher to show a 1.2 percent incline. Taken together, August and September marked the best back-to-back showing since October 2010. Sales in most major sectors rose, with electronic goods seeing a 4.5 percent rise amid Apple’s release of the iPhone 5. Car dealer sales were up 1.3 percent while petrol sales grew 2.5 percent. Higher stock prices, a budding housing recovery and ameliorating job prospects have likely helped shore up confidence, boosting prospects for the sector which accounts for about 70 percent of economic activity. As such, the figures have raised hopes that the economy roared back in the third quarter after expanding by a tepid 1.3 percent annualized pace in the June quarter.

Meanwhile, the Bureau of Labor Statistics is awaited to report that inflationary pressures increased in September, likely led by a rise in energy costs. The headline Consumer Price Index is estimated to have inclined by 0.4 percent last month, following up the 0.6 percent jump registered in August. Core inflation is also deemed to have augmented by 0.2 percent last month, doubling the 0.1 percent rise in August, suggesting that other goods and services also saw a modest rise in prices amid increased economic activity. After being a drag to the US economy, the housing market continues to show more signs of life. The National Association for Home Builders is believed to report that its Housing Market Index rose further in October, topping the six-year high it set last month. The index is estimated to have increased from 40 points to 41 points this month, suggesting improving builder confidence. Low interest rates and improved confidence has incited a rebound in demand for properties, which in turn feeds into homebuilder confidence.

Finally, despite views that the slowing global economy has taken its toll on the manufacturing sector, the Federal Reserve is believed to report that industrial output picked up modestly in September. After dropping 1.2 percent in August, Industrial Production is projected to have edged up by 0.2 percent last month, suggesting that manufacturing activity did not falter as much as previously thought. Considering these reports portending brighter prospects for the world’s largest economy, risk-on trades are presumed to debilitate the Greenback. As such, a long position is advised today.

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