Participants Cautious, Crude Up, Gold Higher
New York (Dec 11) US financial markets were weighed down Tuesday as well as Asian session Wednesday by the US budget deal and speculations that the Fed would announce paring to begin in the meeting next week.
Wall St declined with the DJIA and the S&P 500 indices losing 0.33% and 0.32% respectively.
Commodities firmed as US$ weakened.
The front-month contract for WTI Crude Oil climbed to a 6-wk high of 98.74 before settling at 98.51, up +1.20%.
Brent Crude Oil contract fluctuated between gains and losses and finished the day flat.
Gold strengthened to a 3-wk high at 1267.5 before settling at 1261.1, +2.18%.
US Senate Budget Committee Chairman Senator Patty Murray and House Budget Committee Chairman Representative Paul Ryan introduced a bipartisan budget plan worth of US$ 85-B Tuesday, hoping to end 3 yrs of impasse and fiscal instability in the world’s biggest economy.
US President Barack Hussein Obama, urging the Congress to approve the plan, stated that it is a “good first step”.
The plan, rather than automatic “sequestering” spending, allows federal agencies and discretionary programs to spend US$ 63-B more over 2 yrs.
Spending cuts would be made in other areas.
For instance: there would be a US$6-B cuts in federal workers’ retirement benefits and another US$ 6-B in cuts to military pensions. It would also provide an additional US$ 20-23-B in deficit reduction over 10 yrs.
Republican House speaker Boehner noted that “while modest in scale, this agreement represents a positive step forward”.
Following BOE Governor Mark Carney’s comment that economic growth in the UK would likely accelerate in Y 2014, the country’s RICS housing survey for November suggested that a net 58% of surveyors had noticed higher house prices over the past 3 months while a net 59% noted that they expected prices to rise over the next 3 months.
UK manufacturing activities showed improvement with industrial production expanding +3.2% y/y in October, following a +2.2% rise a month ago, and manufacturing production rose +2.7% in October after a downwardly revised +0.7% gain in the prior month.
Oil news
The industry-sponsored API estimated that US Crude Oil inventory declined 7.5-M bbls on the week ended 6 December.
For fuels, gasoline and distillate stocks gained +6.3-M bbls and +1.2-M bblsrespectively.
The official DOE/EIA might probably report that Crude Oil inventory dropped -2.8-M bbls. Gasoline stockpile might have gained +2.1-M bbls, while distillate slipped 1.3-M bbls.
