TRADERS´ Blogs

The People's Bank of China injected CNY 220 billion into the money market through reverse repurchase operations. The central bank added CNY 150 billion using seven-day reverse repos at a yield of 3.4 percent and CNY 70 billion via 14-day reverse repos at 3.6 percent. This huge injection into the banking system has lowered hopes of another reserve requirement reduction from the central bank. China lowered the reserve requirement ratio by 50 basis point in May after taking a similar move in February.

Oil prices rose for a fifth straight day of gains Monday, on the back of rising consumer confidence in the US economy. Benchmark oil for September delivery rose 5 cents to $96.06 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 41 cents to end at $96.01 per barrel on the Nymex on previous trading session. Brent crude rose 67 cents to $114.38 on the ICE Futures exchange in London. The preliminary August index of consumer sentiment is at highest level since May. Most economists had been expecting a decline. That combined with surprisingly strong retail sales and housing data raised hopes that the world's No. 1 economy is gaining traction.

OPEC produced 31.9M barrels in the second quarter compared with projected demand for the group’s crude of 29.8M. OPEC hasn’t overproduced as much since 1998, when supply exceeded demand by 3.4M bpd. Most of the excess oil is probably going into developing-nation storage sites where data is scarce, as only 15% is accounted for in the 28 Organization for Economic Cooperation and Development countries the Paris-based energy agency advises. The flood of supply comes as the euro area struggles to contain a debt crisis now in its third year. Economic growth has decelerated for six quarters in China while the US, the world’s biggest oil consumer, has a jobless rate that hasn’t dropped below 8% for more than three years. US oil consumption fell 1.1% last week, the first drop in four weeks.

Oil hovered above $93 a barrel as concerns about supply disruptions supported a 2-month, 21% rally. Benchmark crude was down 46 cents to $93.21 a barrel on the New York Mercantile Exchange. The contract rose $1.47 on Tuesday to settle at $93.67 in New York. In London, Brent crude was down 56 cents at $111.44 on the ICE Futures exchange. Crude has jumped from below $78 in June despite signs of weak economic growth and no official confirmation of expectations of another round of major monetary stimulus by the US or Europe. Investor optimism has sparked a global stock market rally this week, which has helped carry crude prices higher.

Retail sales in the United Kingdom rose unexpectedly in July as warm weather and Olympics boosted sales of food and drinks. Retail sales values rose 0.1% on a like-for-like basis annually in July. It had forecasted a 0.2% drop. A year ago, sales recorded 0.6% increase. On a total basis, sales were up 2%. The warm weather in the final week of the month, combined with the start of the Olympics, helped support food and drink sales. But the sharp fall in food inflation has dampened top line growth. The three-month average showed the growth of like-for-like non-food sales outpacing food sales for the first time since May 2010. This development was mainly influenced by strong growth in clothing and footwear and toiletries and cosmetics.

Corporate India's net profits are expected to grow by a robust 24.5 per cent in FY 13 due to softening of commodity prices and steady interest rates. It is expected net profits of corporate India to grow by a robust 24.5 per cent in FY 13, after falling by 0.6 per cent in FY 12. The net profit margin of corporate India too is expected to inch up to 7.2 per cent from 6.8 per cent in FY 12. The growth in the income of the banking industry too is expected to slow down to 16.4 per cent in FY 13 from 33.7 per cent in FY 12. This will be mainly because of stable interest rates. Interest rates had risen rapidly last year and had pushed up the income growth.

The Monetary Authority of Singapore (MAS) expectes inflation, set to range between 4 and 4.5% in 2012, up from the prior forecast of 3.5% to 4.5%. The central bank retained growth forecast of 1% to 3% for 2012. The estimate is based on assumptions that there is no recession in the US, no significant escalation of the euro zone crisis and no hard landing in China.

The economy is still on track for a moderate recovery from the March 2011 disasters but faces a threat from slowing growth in China. The Japanese economy is on the way to recovery at a moderate pace due partly to reconstruction demand, although difficulties continue to prevail.

Gold prices to reach its all time high of $2000 an ounce in the first quarter (Q1) of next year. Silver prices to average $42 per ounce in the Q1 of 2013. Global gold prices were up on last trading session but lower for the week. The most-active August gold contract on the comex division of the New York Mercantile Exchange settled at $1,582.80, down 0.58% on the week.

The euro slipped 0.1 percent to $1.2272, trimming its first weekly gain in three. The shared currency fell 0.1 percent to 96.43 yen. The dollar was little changed at 78.58 yen, declining 0.8 percent against the Japanese currency in the five days.