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January 2014

Commodity Markets Outlook - January 2014

John Baffes's picture
The World Bank just published its January 2014 Commodity Outlook. With the exception of energy, all the key commodity price indices declined significantly in 2013. Fertilizer prices led the decline, down 17.4 percent from 2012, followed by precious metals (down almost 17 percent), agriculture (-7.2 percent), and metals (-5.5 percent).

Prospects Daily: Emerging market sell-off easing, Euro Area economic outlook continues to brighten: Conference Board, India’s central bank raises key interest rates by 25 basis points

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Financial Markets…Developing-country market sell-off eased on Tuesday after three days of intense selling as investors speculated the central bank of Turkey would hike interest rates significantly at emergency policy meeting later today to defend its battled lira. India’s unexpected move to raise policy rates also weighed positively on market sentiment.  Emerging markets have been shaken in the past two weeks amid worries over the reduction of U.S.

Prospects Daily: Developing-country currencies continue to tumble, Polish unemployment rate at seven-month high, Brazil’s consumer confidence falls to lowest level since June 2009

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Financial Markets…Developing-country currencies continued to tumble on Friday, extending their worst sell-off in five years, as growing concerns over Chinese growth sparked great anxiety about the prospect of developing countries’ economies, compounded by country-specific political and financial problems. Notably, the Turkish lira plunged to a fresh record low of 2.3360 per dollar even after the country’s central bank’s intervened directly in foreign exchange markets for the first time in more than two years.

Prospects Daily: Turkey’s central bank intervenes in foreign exchange markets to defend the sliding lira, U.S. weekly jobless claims inch higher but remain near recent lows, China’s manufacturing sector contracts

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Financial Markets… Turkey’s central bank intervened directly in foreign exchange markets on Thursday for the first time since 2012, selling U.S. dollars to support the lira. The move came after the lira fell to a fresh low of TL2.2931 against the dollar. Mid-morning the lira was trading at TL2.2660 to the dollar, down 0.24% from the previous day.

Prospects Daily: Spanish government 10-year bonds attract record bids, Eurozone government debt narrows for first time in 6 years,Thailand’s central bank leaves policy rate unchanged at 2.25%

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Financial Markets… Spanish government sold €10 billion ($13.6 billion) of 10-year bonds after receiving record bids of almost €40 billon. The record demand for Spanish debt seemed to underscore growing investors’ confidence on the country and the strong appetite for high-yielding government securities. The new bond was sold at a yield of 178 basis points (bps) over the mid-swap rate, down from a yield of 278 bps at a similar sale in May.

Prospects Daily: World Bank sees stronger global growth as rich economies expand

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The world economy is projected to strengthen this year, with growth picking up in developing countries and high-income economies appearing to be finally turning the corner five years after the global financial crisis, according to the World Bank’s newly-released Global Economic Prospects (GEP) report.

Global GDP growth is projected to firm from 2.4% in 2013 to 3.2% this year, stabilizing at 3.4% and 3.5% in 2015 and 2016, respectively, with much of the initial acceleration reflecting stronger growth in high-income economies.

Prospects Daily: U.S. Treasuries rally on slow job growth, China’s export growth slows in December

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Financial Markets…US. Treasuries prices rallied while the dollar pared gains on Friday as much weaker-than-expected U.S. job growth in December curbed speculations the Federal will accelerate the pace of its tapering plan. The benchmark 10-year yield tightened 9 basis points (bps) to a two-week low of 2.88% in morning session, and the thirty-year yield dropped 6 bps to 3.82%. The 10-year yield jumped to 3.05% on January 2, maintaining the momentum following the Fed’s tapering decision last month, which was the highest level since July 2011. The U.S.

Prospects Daily: Developing-country stocks rise for the first time this year, Brazil’s industrial production slows

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Financial Markets… Developing-country stocks gained for the first time this year amid signs of improving global growth prospects, but Turkish stocks extended their slumps on lingering political unrest. The benchmark MSCI Emerging Market Index advanced 0.3% on Wednesday, its first gain since December 31, as investor sentiment was benefiting from encouraging economic reports out of the U.S. and Europe yesterday. The gauge declined 3% in the first four trading sessions of 2014, extending a 5% loss accumulated in 2013.

Prospects Daily: Global equities remain under pressure on China concerns, US factory orders rise more than expected, Service sector growth slows in Brazil, China, and India

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Financial Markets…Lingering concerns over a slowdown in the Chinese economy prompted a third straight day of declines for global stocks on Monday, while U.S. Treasuries advanced in the wake of some mixed economic reports. The benchmark MSCI world equity index touched a three-week low following a sharp overnight sell-off in Chinese stocks. Overall declines, however, were somewhat limited as European and U.S. shares have bounced back from earlier losses.

World Bank published latest commodity prices: January 2014

John Baffes's picture
In December of 2013, energy prices climbed up by 3.2% while the non-energy commodities rose by 0.5%. Food prices were off by 0.6%, while beverages rebounded by 4%, raw materials by 1.1% and fertilizers by 1.7%. Metals also increased by 1%, while precious metals continued their declines dropping 4.3%.

Prospects Daily: Indian rupee and Thai baht lead depreciations against U.S. dollar among Emerging Asian currencies, UK house price inflation fastest since 2009, China’s non-Manufacturing Purchasing Managers’ Index dips in December

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Financial Markets… The Indian rupee and Thai baht led depreciations versus the dollar in Emerging Asian currencies this week as weaker economic data prompted speculation that some of the region’s largest economies are cooling. A government report showed China’s manufacturing and service sector growth slumped in December, while an industry report showed India’s manufacturing Purchasing Manager’s Index weakened last month. The rupee fell 0.9% from last week to 62.405 per dollar, after dropping to a 1-month low earlier today.

Prospects Daily: Global stocks start New Year on relatively weak note, U.S. manufacturing ends 2013 on a high note, Manufacturing sector growth rebounds in Brazil but slows in China, India, and Turkey

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Financial Markets… Financial Markets…Global stocks started the year on a relatively weak note amid disappointing Chinese manufacturing data with developing-country stocks leading the decline. Market valuations for global equities surged more than $9 trillion in 2013 as Federal Reserve’s quantitative easing helped the U.S. economy gain momentum and Eurozone economy rebound from its longest recession. European and U.S. stock markets fell slightly after ending 2013 on a very strong note, while emerging-market stocks drop the most in six weeks on Thursday.