The US Department of Commerce has authorized exports of minimally processed crude oil, which could help reduce unprecedented levels of crude oil stocks in the U.S. and may narrow the 7 percent discount that U.S. oil trades to international (Brent) prices. In South Asia, weak economic growth has taken a toll on corporate and bank balance sheets. Tighter monetary and regulatory policies in the larger economies in East Asia have contributed to the slowdown in credit growth.|
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U.S.Treasuries prices dropped for a second day on Wednesday after a private report showed stronger-than-expected private-sector jobs figures in June. Robust U.S. private-sector employment report increased expectations for tomorrow’s nonfarm payrolls report from the U.S. government. The benchmark 10-year yield climbed 5 basis points (bps) to 2.61%, the highest level since June 24, while the 30-year bond yield traded flat at 3.44%.
Bulgaria’s banking crisis alleviated on Monday after the European Union approved the country’s request to provide 3.3 billion levs ($2.3 billion) in state aid for lenders as a precautionary measure. The government appealed for calm and arrested people suspected of trying to disrupt the country’s banking system. Led by banking shares, the country’s benchmark stock index (Sofix) climbed 4.2% today, posting the biggest gain in the world and recovering from a six-month low level reached last week.
Investors are returning to developing-country exchange traded funds (ETFs) as emerging market assets are among the main beneficiaries of a renewed rush for riskier assets. Asset managers have put nearly $11 billion into developing-nation ETFs listed in the U.S. in Q2 after pulling $31 billion from them in the first quarter amid the end of easing U.S. monetary policy and global risk aversion.
European stock markets retreated on Tuesday after a survey showed German business confidence was dwindling. The Stoxx Europe 600 Index fell 0.2% with Germany’s DAX and U.K.’s FTSE 100 index sliding at least 0.1%. But the benchmark Stoxx index is gearing for a third monthly gain, supported by the European Central Bank’s unprecedented stimulus measures that were unveiled in early June.
The rate banks in the Eurozone charge one another to borrow overnight, known as Eonia, fell to a record low as the European Central Bank decided to charge a negative interest on overnight bank deposit in an effort to boost the cash liquidity into the economy and curb the threat of deflation. The Eonia index rate was set at an all-time low of 0.01% after markets closed yesterday, compared with an average for this year of 0.19% and a record high of 5.75% reached in April 2001.