Month: December 2012

By OilPrice.com

Starting Tuesday, U.S. regulators will hold regular meetings on oil and natural gas pipeline safety standards. A series of pipeline issues, ranging from a deadly gas pipeline explosion in California, to a massive oil spill in Michigan, have brought pipeline safety to the forefront of the American energy debate. The safety meetings, scheduled in Virginia, come days after environmental regulators in Nebraska end a public comment period for Keystone XL, one of the most contentious U.S. pipeline issues.

The U.S. Pipeline and Hazardous Materials Safety Administration scheduled hearings beginning Dec. 11 in Virginia. During those meetings, safety committees are expected to review proposed rules related to pipeline damage prevention. PHMSA described the committees as ” statutorily mandated advisory committees that advise PHMSA on proposed safety standards, risks assessments, and safety policies for natural gas pipelines and for hazardous liquid pipelines.”

In October, the Nebraska Department of Environmental Quality announced it was finished with its draft evaluation report for the proposed reroute of the Keystone XL pipeline through the state. In its 600-page draft, the NDEQ found that TransCanada’s new proposal “avoids the region that was identified as the Sandhills by NDEQ, which is based on extensive research conducted by various state and federal agencies several years ago.”

NDEQ closed the period for written testimony on the reroute Friday. Bold Nebraska, an advocacy group opposing the pipeline, said this week that TransCanada’s route remains problematic, however.

“TransCanada (NYSE:TRP) is still risking our aquifer and still risking the fragile sandy soils of our state,” said Bold Nebraska’s Executive Director Jane Kleeb in a statement. “When TransCanada first submitted their route to the U.S. State Department, their designation of the Sandhills was much larger and much more accurate to the reality of the Sandhills region.”

Nebraskans get about 85 percent of their drinking water from regional aquifers, a November report published in the journal Environmental Science and Technology states. The study found few published groundwater case studies on the fate of tar sands oil, the type of crude designated for Keystone XL, but noted there may be a residual impact. The report recommended for the pipeline a “risk-managed route.” That route targets a section of the state that was “intensely spray-irrigated, row-cropped (and) underlain by contaminated groundwater.” This route, the report finds, would provide easier access should any emergency response be needed for Keystone XL.

Supporters of Keystone XL say the project is needed to ensure U.S. energy security and support jobs. U.S. Rep Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee, said the pipeline could “create an estimated 100,000 or more direct and indirect jobs” for American workers. Detractors, like Bold Nebraska, however, said any potential benefits far outweigh the risks.

The journal report finds that pipeline spills have declined considerably during the past 10 years. While it’s unclear what action the PHMSA may consider in its safety review, it’s clear that, despite high-profile concerns like the so-called fiscal cliff, regulators are taking pipeline issues seriously as the North American energy boom gains steam.

Source: http://oilprice.com/Energy/Crude-Oil/Will-Regulators-Damn-Keystone-XL.html

By. Daniel J. Graeber of Oil Price

By The Sizemore Letter

There are still a few weeks left in 2012, but focus has already shifted to 2013.  The next year will be a “make or break” one for some of the investment themes we’ve been tracking, but in others it will be more of the status quo.

I’ll start with Europe.  I spent much of 2012 attempting to buy the dips in the markets most affected by the ongoing sovereign debt crisis.  In my Covestor Tactical ETF Model, my primary trading vehicle was the iShares MSCI Spain ETF (NYSE:$EWP), and my record on this trade was very much a mixed bag.  I underestimated how truly terrified investors were of a Eurozone breakup, and I entered the trade far too early.  The losses I took earlier in the year on EWP are a big reason for the Tactical ETF Portfolio’s underperformance vs. the S&P 500.

In the Covestor Sizemore Investment Letter Model, I took positions in Spanish banking giants Banco Santander (NYSE: $SAN) and BBVA (NYSE:$BBVA), and my timing on these trades was better.  Both positions have thus far worked out nicely in 2012.

I continue to be a bull on European stocks in general and Spanish stocks in particular.  At current prices, I consider European blue chips to be very attractive, and I like several as ways to get “back door” exposure to emerging markets.  For European blue chips to be a profitable investment over the next 1-5 years, the Eurozone simply needs to avoid blowing up.

Unfortunately, that may be asking a lot.  Political forces are quickly pushing the UK to the exit door, and the return of Silvio Berlusconi puts Italy’s reform agenda at serious risk.  And Spain may be facing a bona fide secession crisis from Catalonia, which would likely mean a meltdown in the Spanish sovereign debt market.

So, while I remain bullish on Europe, I acknowledge that 2013 will be a “make or break” year.  If Europe survives 2013 intact, then chances are good it will muddle through.  But this is by no means certain.

Dividend-paying stocks were a major investment theme for Sizemore Capital in 2012.  In addition to comprising a large allocation of both the Tactical ETF Portfolio and the Sizemore Investment Letter Portfolio, we created a new model to focus specifically on dividends and dividend growth: the Covestor Sizemore Capital Dividend Growth Model.  The Dividend Growth model is currently concentrated in dividend paying stocks, master limited partnerships, and conservative real estate investment trusts.

Investors have been concerned that higher taxes on dividend income will be coming down the pipeline if President Obama gets his way on tax hikes for high-income Americans.  This is a legitimate worry, but I don’t see higher taxes having much of an effect on the long-term shift in investor preferences for income.

There are multiple, overlapping trends at work.  First, with rates on bonds and traditional savings instruments crawling along near record lows, investors have little incentive to dump dividend-paying stocks.  Yes, they will likely be paying more in taxes on the dividend income.  But what is their alternative for income?  Bond interest will likely be taxed at an even higher rate.

Demographics also play a role here.  As the Boomers approach retirement, they are developing a strong preference for income-producing securities.  And as the largest and wealthiest generation in history, the Boomers tend to get their way.  Dividend tax hike or no dividend tax hike, the demographic-driven demand for income is not likely to change.

Furthermore, current income is only one reason to buy dividend-paying stocks.  Companies that pay a reliable dividend are rightly viewed as being more stable and conservatively managed.  They are also less likely to be engaged in accounting shenanigans.  All of this matters more today than in years past to investors who have gotten burned by scandal after scandal over the past decade.

With all of this in mind, Sizemore Capital intends to continue its focus on income-producing securities such as dividend-paying stocks.

Finally, I expect a good year for emerging markets.  On this count, I was flat-out wrong in 2012 (as a value investor, I prefer to say “early”).   I underestimated how badly the markets would react to slowing in China and Brazil.  But after spending much of the past year in a correction, I expect to see emerging markets have a break out year in 2013.

Disclaimer: Sizemore Capital is long EWP, SAN and BBVA.  This article first appeared on MarketWatch.

SUBSCRIBE to Sizemore Insights via e-mail today.

The post Investing Outlook for 2013 appeared first on Sizemore Insights.

By www.CentralBankNews.info     Global banking regulators have proposed a new framework for banks to calculate potential losses on asset-back securities that aims to reduce their automatic reliance on credit ratings agencies whose  assumptions proved far too optimistic and contributed to the severity of the global financial crises.
    The Basel Committee on Banking Supervision said the proposal – “Revisions to the Basel Securitisation Framework – did not include a specific text but was a revision to the framework. The Committee is now asking for industry feedback and will carry out an impact study of the proposals before deciding on the “definite way forward.”
    The popularity of securitised debt, such as mortgage-backed securities, exploded in the last decade but the financial crises revealed that banks and ratings agencies severely underestimated the expected loss in underlying exposures and the concentration of systemic risk. They were also far too optimistic in their view of the benefits to banks of such diversification.
    As the crises started to unfold in 2007, it became clear that capital requirements assigned to both highly-rated and low-rated securitised products were too low. So when ratings agencies downgraded the products as credit quality deteriorated, banks suddenly had to come up with additional regulatory capital and often sought to get rid of their securitisation exposure, further depressing their value.

    The Basel Committee didn’t put all the blame on credit ratings agencies, saying some banks’ internal risk assessment models “performed equally poorly or even worse.”
    The new securitisation framework seeks to address what regulators have identified as the four main shortcomings of the current method: Mechanistic reliance on external ratings, too low risk weights for highly-rated securitisation exposures, too high risk weights for low-rated securitisation exposures and cliff-effects in capital requirements following deterioration in credit quality of the underlying pool.
    The Basel Committee, which represents banking supervisors from the world’s main financial centers, is proposing two approaches with different hierarchies, depending on whether the banks use a standardised approach to risk measurement or an internal ratings based approach.
    “The two alternative hierarchies would basically use the same approach for assigning capital requirements; however, the application of these approaches would vary, depending on the specific exposure characteristics and other factors,” the Basel Committee said.
    Comments on the revised framework should be submitted by mid-March 2013.
    The new proposed framework is the result of a fundamental review by the Basel Committee of the way banks measure their exposure to securitised products. In July 2009 the committee introduced improvements to the Basel II rules – known as Basel 2.5 – but these mainly addressed immediate shortcomings that became clear during the financial crises.
    At that point, the Basel Committee launched a more thorough review of the securitisation framework alongside the publication of the Basel III rules in December 2010.

    www.CentralBankNews.info

By www.CentralBankNews.info     Morocco’s central bank kept its policy rate unchanged at 3.0 percent and expects inflation to average 1.7 percent over the next 1-1/2 years, in line with the bank’s price stability objective.
     Bank Al-Maghrib, which has held its rate steady since March when it was cut by 25 basis points, said headline inflation should hover around 1.2 percent in 2012, 1.7 percent in 2013 and 1.5 percent in the first quarter of 2014.
    “In this context where the balance of risks is neutral and the central inflation forecast is permanently consistent with the price stability objective, the Board decided to keep the rate unchanged at 3 percent,” the central bank said in a statement, repeating its statement from September.
    Morocco’s headline inflation rate rose to 1.8 percent in October from September’s 1.2 percent, but the bank said this was mainly due to a 5 percent rise in volatile food prices. Core inflation rose to 0.8 percent in October from 0.6 percent.

    Morocco’s Gross Domestic Product expanded by an annual 2.3 percent in the second quarter for first-half growth of 2.6 percent and the bank said 2012 growth was expected to remain below 3 percent, the same forecast as in September.
    Next year, the central bank forecasts that the country’s economy should expand between 4 and 5 percent under the assumption of average cereal production and “persistent unfavorable global economic outlook.”

    Morocco’s government has forecast the economy would expand by 4.5 percent in 2013.
    Money creation in Morocco continued to moderate at the end of October, the bank said, with money supply up an annual 3.6 percent, down from 4.4 percent in the previous quarter, and credit growth down to 5.4 percent from 6.3 percent.

    “Under these circumstances, the money gap is expected to remain negative, suggesting the absence of monetary inflationary pressures,” the central bank said.
    Morocco’s economy is dependent on tourism and exports to Europe. Transfers from some 2 million migrants living abroad shrank by 4 percent to the end of November and travel receipts fell by 2.3 percent, the bank said.
   
    www.CentralBankNews.info

By www.CentralBankNews.info      Hungary’s central bank, which earlier cut its benchmark rate for the fifth time this year, said it would consider further rate cuts but underlined this would “only” occur if sentiment in financial markets continues to improve and there is evidence that the inflation target is achievable.
    The statement by the National Bank of Hungary signals the bank’s Monetary Council is likely to pause in its cycle of rate cuts that have reduced the rate by 125 basis points this year to 5.75 percent.
     The central bank said the high level of excess capacity in Hungary’s economy will offset the medium-term inflationary risks and it expects to meet its 3 percent inflation target even if monetary conditions were eased.
    “Given the slack conditions in the labour market, the rate of earnings growth is likely to slow as the effects of administrative measures fade,” the bank said, adding:
    “The Council will consider a further reduction is interest rates only if the improvement in financial market sentiment continues and incoming data confirm that the inflation target is achievable on the horizon relevant for monetary policy.
    Last month the central bank also said it would consider further rate cuts but now it has made further rate cuts conditional on improved financial market sentiment and lower inflation.
    Hungary’s inflation rate fell to 5.2 percent in November from October’s 6.0 percent and the bank admitted inflation has remained persistently above its target despite the recession. But the high rate of inflation mainly reflects the effect of commodity price shocks and higher indirect taxes while the pace of underlying inflation remains moderate, it said.
    “Looking ahead, inflation is expected to slow significantly in the short term, mainly reflecting movements in items excluded from the core measure, ” the bank said.
    Hungary’s economy remains in recession, with Gross Domestic Product contracting by 0.2 percent in the third quarter from the second for an annual decline of 1.5 percent, up from an annual shrinkage of 1.3 percent in the second quarter.
    The economy’s potential growth rate has also fallen significantly, the bank said, reflecting the postponement of investment decisions and financing constraints on companies.

    www.CentralBankNews.info    

By OilPrice.com

There’s been plenty of talk about potentially radical US foreign policy changes as a result of the shale boom. While one shouldn’t expect any dramatic US foreign policy move away from the Middle East, factors are influencing a greater focus on Asia. Only one thing is certain in this transforming world: The shale boom is real and the implications are many and difficult to predict.

In an exclusive interview with Oilprice.com publisher James Stafford, energy security expert Michael Levi, the David M. Rubenstein Senior Fellow for Energy and the Environment and Director of the Program on Energy Security and Climate Change at the Council on Foreign Relations (CFR), discusses:

• Why oil price stability is still all about the Middle East
• Why the oil and gas industry is heading towards transformation
• Why oil prices could drop substantially
• Why the US shale boom is real
• Why the shale oil boom won’t lead to major US foreign policy changes
• Why Keystone XL is pretty much non-essential
• Why we won’t see any radical change in renewables in the next five years
• The best way to achieve meaningful results on climate change

James Stafford: What is the number one threat to energy security today?

Michael Levi: I am not a huge fan of using the word ‘energy security’ because it means different things to different people, and that makes it very easy for people to talk past each other. What I would say the number one risk to the stability of global oil prices–which can have big economic and security ramifications–is the potential for major conflict in the Middle East and instability in oil-producing countries.

James Stafford: Are there any other regions that have this same destabilizing potential?

Michael Levi: The Middle East is always the place where focus is rightly drawn, because it is the place where you can have outsized disruptions. One of the things that I tend to emphasize is the need to focus and prioritize concerns, and it is very easy to get [drawn into] every 100,000 or 200,000-barrel-a- day change somewhere in the world that might have big consequences for one particular country, but does not necessarily have outsized global consequences or national consequences that policymakers need to think about. If I spend my time trying to think through what policymakers should be paying attention to, my focus, when it comes to disruptions to the oil system, tends to come back to the Middle East.

James Stafford: The UK-based think tank Chatham House has published a new report seeking to demonstrate how the oil and gas industry is under significant pressure that will lead to a transformation. How do you see a potential transformation of the industry taking shape?

Michael Levi: I think it is important to start with a distinction, particularly one that is important in the US: the oil and gas sectors, to some extent, are becoming two genuinely separate sectors, rather than one integrated one.

In the past, most natural gas was produced as associated gas together with oil, and that made oil and gas as a single entity very clear, something that made a lot of sense. Now you have a lot of non-associated gas; gas being produced separately, often by companies that do not engage in much oil production. They really have distinct challenges and opportunities, and as a result, different sets of pressures.

For the natural gas industry, at least in the US, the big challenges are low prices in the glut of gas on the market that is not being matched by demand. A big part of this is certainly idiosyncratic; there are people who are drilling to hold leases and cash flow, and they are doing that en masse, which is a problem for the whole industry.

At the same time, they have not been able to coalesce around the efforts to boost demand.

The oil world is a completely different story and you have pressures from different directions right now. On the one hand, you have a surge in opportunities for development in countries where geopolitical risks are relatively low. In the US, Canada, and Brazil you may need to still worry about regulatory changes, but you are not worried that terrorists will come and capture your workers.

At the same time, for a lot of the companies, that is not enough and they are still looking globally, and they still face challenges from nationalism and unstable regimes. On top of that, they are entering a period in which there is probably more uncertainty in prices than there has been for a long time. You have this collision of growth and supply from
outside OPEC, together with potential Iraqi growth and substantial investment from within OPEC that really opens up the possibility of a big, if temporary, price drop in the next five or
so years. That complicates the outlook for companies, on top of everything else.

James Stafford: Really? You believe that prices could drop in the future?

Michael Levi: I think prices could drop substantially. If you look at the most recent IEA report or the most recent OPEC outlook, you see that if all currently planned investment goes ahead, then at prices resembling current ones, supply would greatly outstrip demand.

Either countries will pull back with production and investment in OPEC and allow supply to match demand at relatively high prices–and I think that is the most likely outcome–or they will not be able to decide who has to pull back, and there will be an excess of supply on the market that pushes prices down quickly. That is self-correcting, because low prices cannot sustain the big gains in North American production. But you can still have temporarily low prices that really shake things up for some producers, depending on the properties of their investment.

James Stafford: Speaking of the IEA report, predictions that the US could pass Saudi Arabia to become the world’s largest oil producer by 2017 have come under a lot of criticism. What do you think of the IEA’s predictive mathematics?
Michael Levi: Predictions are always wrong in one way or another, and I am not going to second-guess those who have thought to a much greater depth in these analyses. There is a range of estimates out there, but the IEA ones are relatively modest.

The bigger issue is: what are the implications? Everyone likes to talk about how their projections show that the world is being reborn anew, and will be fundamentally different from what it was in the past.

There is a temptation to oversell, and I think it is reasonable that people react negatively to efforts to oversell the consequences of the changes going on in energy.

James Stafford: What are your views on the shale boom? Do you believe it can live up to the hype?

Michael Levi: It depends on what hype we are talking about. I think the shale boom is for real. I think that a lot of the criticism that we do not know long-term production rates and so on are important to look at. But even if you assume that returns on wells are substantially lower than most people think they are right now, our projected output is still quite high, because producers’ economics are dependent primarily on what happens in first few years after they drill. We know roughly what happens in the first years after producers drill.

The hype that says that this will all replace coal without any government intervention, gas prices will be $3 forever, or that we will be the dominant exporter in the world, are out of contact with reality. We have temporarily depressed prices, they will rise a bit. Hype always has the ability and the tendency to outstrip reality, but in this case, reality is pretty radical itself.

James Stafford: Could the shale boom lead to a change in US foreign policy priorities, away from the Middle East?

Michael Levi: An economic analyst will typically tell you that the US shale boom will fundamentally change US vulnerability to energy events in the Middle East. But not every policymaker listens to their economic advisors.
I do not think that US policymakers will step back and say, ‘We need to revisit our strategy in the world, because of this oil boom.’ I do think that what is happening will weigh on ongoing
discussions that already exist about future US priorities.

The most obvious one is the discussion from the US Department of Defense over how much to shift from the Middle East to Asia. Within that existing debate, I have no doubt that people who want to see more of a shift will emphasize what is happening in US energy. I think it will have some influence, but ultimately, I do not see a radical change as being likely.
James Stafford: Now that Barack Obama has won a second term, what do you see happening with the Keystone XL Pipeline? Will it go ahead? Is it essential to US energy security?

Michael Levi: I made a prediction once on the Keystone XL Pipeline, so I have lost my license to make future predictions. The Keystone XL Pipeline is non-essential to US energy security; it is also not disastrous to climate change. It has been overblown by both sides in the debate. It is one pipeline that would carry a modest, but non-trivial amount of crude, and that would help create economic incentives to increase production, again, by a modest but not earth-shattering amount.

The more fundamental question is whether the US is going to let economically-rational infrastructure go ahead. I think if you replicate a pattern like the one that some would like to see for Keystone and you start blocking pipelines all over the place, then that becomes a larger economic problem.

In the end, will it make the US more secure in any meaningful way? I doubt it. Prices for Canadian oil rose more during the Libya conflict than the prices for Brent Crude, or WTI. It is hard to say that Canada gives the US potentially more security aside from in extreme circumstances.

James Stafford: One would have thought that the natural gas boom would be good for the environment, but the cheap gas prices have also hit coal prices, and we are seeing Europe sucking up unused US coal. Is this a trend we can expect to continue?

Michael Levi: I think it is a trend we can expect to continue to some extent, particularly if Europe does not make stronger moves away from coal. The state of our knowledge about global coal markets is pathetic. All we can say right now is, directionally, more gas in the US means cheaper coal, which leads to more exports, but we are still far from being able to really put quantitative meat on those bones, and making some meaningful net assessment.

James Stafford: What do you believe is the best way to achieve meaningful results on climate change? How much of an influence will Hurricane Sandy have on this debate?

Michael Levi: I think Hurricane Sandy has put the debates into a prominent place, which is essential to moving it forward.

Ultimately, I still believe that carbon pricing in one form or another is essential to achieving deep cuts in economically-sensible ways. That can come in the form of a tax, resurgent cap and trade, or clean energy standard; there are all sorts of ways to do carbon pricing. In the long haul, I think you come back to that, particularly if you care about doing this is an economically-efficient way.

James Stafford: What changes in public interest on climate change have you noticed over the years? Do you think that at this rate climate change will ever gain the support it needs to be effectively tackled?

Michael Levi: Ever is a long time. I think we are back in a building phase. If you look at the first decade of this century, you had a solid 5 or 6 years that was really about building broad support for action on climate change, about test driving different approaches, and by the time you got to 2008, there was actually pretty broad support, particularly in the Senate for action on climate change. You had 2 presidential candidates competing to see who had the best climate strategy. Then you had the financial crises. You had intense polarization. You had a deep, deep recession, and climate action became a much lower priority.

A lot of people got used to saying in early 2009 that we would come back to climate change when the economy got better. The only mistake that people made in that analysis was thinking that that was only a couple years off. It turns out that it is even further off.

One of the emerging barriers to action on climate change is that doing things to exploit oil and gas have been set up as 100% incompatible with serious efforts to deal with climate change. That stark choice makes it very difficult to build coalitions that will move anything forward. We have actually moved in the last couple of years into a considerably more difficult situation than we were even 4 years ago, when a candidate like John McCain could say, ‘I support oil and gas production, and I support a strong cap and trade system.’ The president talks about things like that today, but gets considerably weaker support for it, and that ultimately needs to change.

James Stafford: How can this change?

Michael Levi: I have a book out next spring, talking about this. The first step is for each side to recognize that accepting a lot of what his opponents want will not fatally undermine what it wants. Oil and gas will need to understand that serious action on climate change will not fundamentally undermine what they want to accomplish in the next decade or two. People who want to take action on climate change need to fundamentally understand that expanding access to US oil and gas production will not fatally undermine their own goals. Compromise is not an oxymoron.

The second thing that needs to happen is there needs to be some rebuilding of trust. That is difficult; you do not just do it by hanging out more at the bar. You need to do small deals that show that you can work together.

You can think of all sorts of ideas; you could tie royalties from increased oil and gas production to financial support for renewable energy. You could provide support for carbon capture and storage demonstrations that support enhanced oil recovery. You can work to improve environmental permitting so it is easier to build pipelines and power lines that take renewable energy to places where they can be used.

There are a host of things that are small (but not trivial) win-wins that might help rebuild confidence. Ultimately, both sides need to accept that a political deal is better than trying to go for an outright win.

James Stafford: What role do you see renewable energy playing in the future?
Michael Levi: In the near future, renewable is cost-competitive in niches, but it is still not broadly competitive in the US economy. It has a potential to be.

Renewables have cost and intermittency challenges. There is important progress that is being made in renewable energy. I think a lot of that story has been buried in the oil and gas discussion in the last couple of years, but we are seeing record-low prices across the board, and we are seeing record-high deployments. It is important to remember that we still need government support in all these areas if you actually want to see costs come down meaningfully.

James Stafford: How do you define the ‘near future’?
Michael Levi: I do not see a radical change in the relative price of renewable energy and fossil fuels in the next 5 years. Ten years is more difficult to predict, but I would be skeptical. When you start to look ahead one or two decades, particularly when you add in policy uncertainty, it is very difficult to predict what will happen.

James Stafford: Can the US afford to turn its back on nuclear energy?

Michael Levi: If you mean by turning its back, you mean a phasing-out of nuclear energy, I do not think that is sensible to do. Nuclear energy provides 20% of our electricity, and the marginal cost of production is extremely low for existing power plants. The real question is can the US afford to turn its back on nuclear in the future as a source of zero-carbon energy growth? The answer is: we do not know, because we do not know what the alternatives will be, or if there will be significant alternatives. So you want to keep nuclear alive as an option; that means trying to figure out ways to bring down costs, particularly financing costs. It means looking for ways to resolve, or at least partly resolve the waste questions, and it means looking for ways to potentially innovate on small modular reactors to provide a different economic model and a different construction model for nuclear power.

By. James Stafford of Oilprice.com

Source: http://oilprice.com/Interviews/Falling-Oil-Prices-and-the-Shale-Boom-An-Interview-with-Michael-Levi.html

Source: ForexYard

Hey Everyone,

Below are some market trends for today.

Good luck!

-Dan

Gold- May see downward movement today
Support- 1689.77
Resistance- 1714.27

Silver- May see downward movement today
Support- 32.15
Resistance- 32.77

Crude Oil- May see downward movement today
Support- 87.16
Resistance-88.90

Dax 30- May see downward movement today
Support- 7577.54
Resistance- 7700.00

EUR/USD May see downward movement today
Support- 1.3078
Resistance- 1.3279

Read more forex news on our forex blog

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

The JPY remained within reach of a 20-month low against the US dollar in overnight trading, as speculations that the Bank of Japan will soon initiate an aggressive monetary easing policy weighed down on the currency. The USD/JPY, currently at 83.90, traded as high as 84.05 last night.

The EUR/USD saw relatively little movement during the Asian session, but remained close to a recent eight-month high as investors eagerly await any developments in ongoing US budget negotiations. The pair is currently at 1.3158.

Both gold and crude oil saw minor bullish movement last night as a weakened US dollar made commodities and precious metals cheaper for international buyers. Gold, currently trading at $1701 an ounce, gained close to $5 during the Asian session, while crude oil prices advanced $0.50 a barrel to reach $88.18.

Main News for Today

Today, a lack of significant global economic news means that the ongoing US budget negotiations are likely to be the biggest factor impacting the marketplace. Any signs that Congressional leaders and President Obama are closer to reaching an agreement to avoid the upcoming “fiscal cliff” of automatic tax increases and spending cuts, may encourage risk taking, which would benefit the euro, gold and crude oil.

Read more forex news on our forex blog

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By The Sizemore Letter

Listen to Charles Sizemore discuss the “Christmas Tree Indicator,” the impending fiscal cliff, the Fed’s gameplan and more on Straight Talk Money with Mike Robertson.

If you cannot view the attached media player, please click on the following link.

The post The “Christmas Tree Indicator” and More on Straight Talk Money appeared first on Sizemore Insights.

London Gold Market Report
from Ben Traynor
BullionVault
Tuesday 18 December 2012, 07:45 EST

U.S. DOLLAR gold prices fell back below $1700 an ounce Tuesday morning, having briefly risen above that level following news of possible progress in the ongoing fiscal cliff negotiations in Washington.

“Investors [are] seemingly wary of taking positions in a time of thin liquidity and still waiting to see whether legislators will avert the automatic spending cuts and tax hikes in the US,” says a note from Swiss precious metals group MKS.

Silver also eased lower after trading above $32.50 an ounce, while European stock markets were up slightly on the day by lunchtime.

On the commodities markets, oil prices edged higher while copper fell slightly. The Euro meantime held near seven-month highs against the Dollar above $1.31.

US president Barack Obama has said he is willing to extend tax cuts currently due to expire at the end of this month for those earning $400,000 or less a year, raising his previous threshold of $250,000. Obama is now looking to raise an additional $1.2 trillion in tax revenues over the next decade, press reports say, down from the $1.4 trillion he was previously seeking.

Over the weekend, Republican House of Representatives speaker John Boehner dropped his outright opposition to tax increases, saying he would consider allowing tax cuts to expire for those earning more than $1 million annually.

Obama has also said he will settle for a two-year increase in the US federal debt ceiling, rather than ask for the power to raise it to be transferred from Congress to the Oval Office, the Financial Times reports. The US is expected to hit its $16.4 trillion borrowing limit in February.

“[The White House is] talking about how close Obama’s position is to what Boehner is willing to accept,” points out Brad DeLong, professor of economics at Berkeley.

“They are not talking about how close Obama’s position is to what [House majority leader Eric] Cantor and the right wing of the House Republican caucus are willing to accept…If Obama makes a deal with Boehner, the next stage is for Boehner to say that while the deal is fine with him, he cannot control his members, and that Obama needs to make additional concessions.”

“It is all very tight and it is still possible that [the fiscal cliff issue] runs into next year,” says Steve Barrow, head of G10 research at Standard Bank.

“But what does seem clear is that some sort of deal will be done and that’s clearly helping to support markets, although the optimism is quite guarded.”

“We expect subdued gold-trading action until the market is clear on the fiscal cliff negotiations,” says VTB Capital analyst Andrey Kryuchenkov.

“We see US lawmakers striking an uneasy late deal over spending reductions and tax hikes.”

UK inflation meantime held steady at 2.7% last month, according to consumer price index data published Tuesday.

“Although unchanged overall…there were significant upward and downward pressures on CPI annual inflation between October and November,” the Office for National Statistics says, adding that prices for food, nonalcoholic beverages and domestic energy rose while the cost of items such as motor fuel and furniture fell.

The Bank of England’s Quarterly Bulletin published this morning says that “early signs have been encouraging” that its Funding for Lending Scheme is boosting the amount of credit provided to the economy, although it adds that “given the usual lags from credit being offered to loans being made, the FLS is unlikely to materially affect lending volumes until 2013”.

“Easier access to bank credit should boost consumption and investment by households and businesses,” the bulletin says.

“In turn, increased economic activity should raise incomes.”

The FLS was launched back in July with the aim of providing funds to banks and building societies for the specific purpose of being used to provide credit to households and non-financial businesses.

Over in China, the world’s second-biggest gold buying nation in the third quarter, a growing number of China’s bankers expect to see looser monetary policy, according to a quarterly survey published by China’s central bank Tuesday.

Although 75% of respondents said they believe the current policy stance is the right one, 19.8% said they expect to see some form of easing in the first quarter of 2013. By contrast, only 5.9% of respondents to the Q3 2012 survey said they expected to see monetary easing in Q4.

India’s central bank meantime left its main policy interest rate on hold at 8% today.

“The inflation picture is still not comforting enough for the central bank to let down its inflation guard,” says HSBC chief India and Southeast Asia economist Leif Eskesen in Singapore.

Indian inflation as measured by its wholesale price index fell to 7.24% last month, down from 7.45% in October. India’s central bank has said it wants to see inflation fall to 5%.

India is traditionally the world’s biggest gold buying nation.

Ben Traynor
BullionVault

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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+

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