Bigger Problem For Prices

(Reuters) - Oil fell on Wednesday on growing hopes of a deal between Iran and the U.N. nuclear watchdog, which eased fears of oil supply disruption, while concerns over the debt crisis in the euro zone and a slowing Chinese economy weighed on demand. The U.N.'s International Atomic Energy Agency expects to sign a deal with Iran soon to unblock investigations into suspected work on nuclear bombs in the oil-producing country. This improved the prospects for talks with Tehran to stop a drift towards conflict. Brent crude fell $1.39 to $107.02 per barrel. U.S. July crude fell $1.08 to $90.77. Brent crude oil has fallen from a peak of $128.40 at the start of May and is down 12.9 percent this quarter, its biggest such drop since the fourth quarter of 2008. Analysts said they believe there ...

Brazilian mining company Vale SA (VALE5.SA) remains confident the price of iron-ore, its main product, will rise in the second half of 2012, relieving environmental and economic pressures on the company which have hurt growth and delayed new projects. Iron ore .IO62-CNI=SI fell to its lowest level in nearly six months on Friday, slipping 1.7 percent to $131.30 a metric ton (1.1023 tons). The medium- to long-term price, though, should be in the range of $120 to $180 a metric ton, Jose Carlos Martins, Vale's head of ferrous metals and strategy, said at a lunchtime gathering with reporters in Rio de Janeiro. Demand for steel remains strong in China, thanks to housing, Vale Chief Financial Officer Tito Martins added. At the same time, declines in prices push higher-cost Chinese producers out ...

The Week Ahead ■The Bank of England's next move ■Is this the beginning of the end for the Eurozone? ■Fed officials reluctant to signal more easing ■Broader risk environment outweighs Japanese rhetoric The Bank of England's next move The BOE kept rates on hold when it concluded its May meeting last week; it also allowed the asset purchase program to come to an end. Since the UK slipped back into recession in Q1 2012 and the growth figures at the start of the second quarter have continued to look weak, the decision to hold interest rates was mostly down to the sticky outlook for inflation. The attention now turns to Wednesday's Inflation Report. The focus will be on the Bank's growth and inflation forecasts. The growth forecasts are likely to be revised lower. Even ...

(Reuters) - Asian shares edged higher on Friday on firm U.S. data, but a two-notch downgrade of Spain's credit rating capped gains, while fresh easing measures by the Bank of Japan briefly pushed Tokyo stocks up over 1 percent and the dollar above 81 yen. European shares were likely to fall, with financial spreadbetters predicting that major European markets would open as much as down 0.5 percent. U.S. stock futures were down 0.5 percent. Japan's central bank moved as expected to help fight deep deflation, sparking a jump in the Nikkei stock average which helped temporarily drag the broader Asian stock higher. MSCI's broadest index of Asia-Pacific shares outside Japan last stood up 0.2 percent, set for a weekly drop of 0.1 percent. The technology sector and Korean shares outperformed, ...

The Australian dollar fell today as a government report showed that nation’s consumer prices rose in the last quarter far slower that was anticipated by market analysts, triggering speculation about an interest rate cut. Australia’s Consumer Price Index rose 0.1 percent in the first quarter of 2012, while much bigger growth by 0.7 percent was predicted by economists. The trimmed mean CPI (core CPI) increase 0.3 percent, while forecasters said that it would stay at 0.6 percent as in the the fourth quarter of 2011. The slowing inflation added incentive for the Reserve Bank of Australia will reduce interest rates. The problems in Europe also reduce demand for the Aussie, as well as other currencies with higher yield. AUD/USD fell from 1.0321 to 1.0310 as of 14:35 GMT today, following the ...

The Week Ahead Highlights UK Q1 GDP to put the brakes on more QE French political risk comes to a head Italy and Spain turn attention to fiscal targets BOJ to back up rhetoric with action FOMC still in wait-and-see mode Market Moves UK Q1 GDP to put the brakes on more QE The major data release in the UK this week will be the preliminary Q1 GDP reading. There is considerable uncertainty around this figure due to some strong data in the services sector, especially retail sales, balanced by some disappointments in the manufacturing and construction sectors. Retail sales for March rose 1.5%, more than the 0.4% expected. This was mostly due to the effects of good weather boosting demand for clothes, footwear and gardening equipment. This helped to reverse some of the ...

Fundamental Analysis EUR "The debt crisis is far from over still and I think Spain will be worse before it gets better" - Henrik Drusebjerg, a senior equity strategist at Nordea Bank AB Spain sold 2.54 billion euros of debt dated 2014 and 2022 on Thursday, above the target range of 1.5 to 2.5 billion euros for the auction. USD "Progress in the labor market is not quite as strong as people had hoped, but we are still on a recovery track here" - Scott Brown, chief economist at Raymond James & Associates Inc. The number of Americans claiming for unemployment benefits declined by 2,000 to 386,000 in the week ended April 14 from the week before, said the Department of Labor on Thursday. GBP "Economic data does look like it is showing some stabilization" - Samantha Fitzpatrick, senior ...

(Reuters) - Spanish borrowing costs jumped at a debt auction on Tuesday but the sale went smoothly and German data gave an upbeat reading of the euro zone's largest economy, providing some relief to investors worried about the debt crisis. The euro and European shares rose and Spanish 10-year bond yields fell further below six percent, a key level breached on Monday. Investors fear Spain's economic problems will reignite Europe's troubles; a break in a country's debt yields above 6 percent has in the past accelerated the rise in borrowing costs to unsustainable territory. But Spain sold 3.2 billion euros of 12- and 18-month Treasury bills, slightly above its target, although yields were higher than at the last sale and analysts said the success was largely due to the participation of ...

Fundamental Analysis EUR "Market stresses will eventually force the ECB to restart the bond program" - Market stresses will eventually force the ECB to restart the bond program The European Central Bank is expected to restart government bond purchases rather than proceed with another round of long term refinancing operation. USD "Disposable incomes of consumers are still being squeezed. That does make it difficult for consumption to accelerate from here" - Jeremy Lawson, an economist at BNP Paribas in New York U.S. consumer confidence deteriorated slightly in April. The Thomson Reuters/University of Michigan’s preliminary index of sentiment declined to 75.7 from 76.2 in March. GBP U.K. "has a wealthy, open, and diversified economy" - S&P Standard & Poor's reaffirmed the U.K.'s triple ...