But Falling Rapidly

(Reuters) - A damaging global dry spell is wilting wheat crops in Kansas, threatening exports from Russia and slowing sowing in Australia, serving a timely reminder to hedge funds that a new era of surplus grain is far from assured. In their biggest surge since 1996, Chicago wheat prices jumped by more than 17 percent last week and reached a nearly 9-month high of more than $7 a bushel on Monday, a rally stoked by short-covering among big speculators -- a group that had amassed a near-record short position betting on falling prices. By Tuesday, six days of buying subsided as analysts said the immediate weather-induced panic yielded to a more considered view: conditions are not as dire - at least not yet - as they were in 2010, when world trade in wheat was sharply curtailed as growing ...

(Reuters) - Copper fell on Tuesday as the dollar firmed and uncertainty about Europe's ability to resolve its debt crisis outweighed reports that top metals consumer China will fast-track infrastructure investment. Three-month copper on the London Metal Exchange touched a week-high of $7,816 a metric ton (1.1 ton) in the session, before erasing gains to $7,712 at 5:37 a.m. EDT (0937 GMT), down 0.2 percent from Monday's $7,731 close. One of the price supports for copper on Tuesday was a report in the state-backed China Securities Journal that Beijing will fast track its approval of infrastructure investments to combat slowing growth and a sluggish property sector. Copper is used extensively in construction. Premier Wen Jiabao has also called for additional efforts to support growth, ...

U.S. Review To QE3 or Not To QE3: That is the Question - Some market participants are beginning to speculate about another round of quantitative easing. Although recent growth indicators have not been particularly stellar, the economy is still growing. Moreover, core CPI inflation in the neighborhood of 2 percent means that the threshold for more QE is relatively high. - Overall, indicators were positive during the week. Housing starts increased by 2.6 percent in April, the Empire Manufacturing index improved to 17.09 in May from a 6.56 print in April and retail sales printed a 0.1 percent increase in April, in line with expectations. To QE3 or Not To QE3: That is the Question QE3 seems to have more lives that a cat; it comes back into the forefront of the U.S. economy discussion ...

Fundamental Analysis EUR " show that despite the crisis in the euro area, Germany is growing and benefiting from a revival in international trade." - Klaus Baader, senior economist at Societe Generale SA German factory orders rose by more than forecast in March, a sign Europe’s largest economy is weathering the debt crisis. USD "From where we sit right now, we think the economy looks fundamentally stronger." - Marisa Di Natale, an economist at Moody’s Analytics in West Chester U.S. stocks closed mixed on Monday after Francois Hollande was elected as a French president and Greek voters turned to antibailout parties. GBP "… the challenging economic backdrop suggests that a significant acceleration in prices or activity is unlikely in the near term." - Robert Gardner, Nationwide’s ...

(Reuters) - Two key central bank meetings and a string of big data releases in the coming week should sharpen the debate over slowing growth and rising inflation risks, and may shake the markets out of the doldrums which followed a bumper first quarter for asset prices. The U.S. Federal Reserve's monetary policy committee will update its economic forecasts for the first time since January at its mid-week meeting, when no policy change is expected but where recent indicators have disappointed investors. While the Bank of Japan is seen as likely to ease its policy further at a meeting on April 27 after coming under intense pressure to help support the still fragile economy. The meetings come after two other central banks, the Bank of England and Bank of Canada, last week surprised markets ...

(Reuters) - Gasoline prices eased for the second week in a row, as falling oil costs stalled gasoline's march toward $4 a gallon nationwide, the U.S. government said on Monday. The national price of gasoline dipped 1.7 cents to $3.92 a gallon in the week ended Monday, the Energy Information Administration said in its weekly survey of service stations. This is the second weekly decline in prices. After surging to record seasonal highs this year, gasoline prices dropped for the first time in nearly three months last week. 0il prices, which account for more than 70 percent of the cost of gasoline, have fallen about 5 percent from mid-March to levels around $103 a barrel on Monday. Gasoline prices are now up just 7.8 cents from a year ago. In 2011, gasoline costs peaked in May at $3.97 a ...

Fundamental Analysis EUR The jobless rate in Spain advanced by 0.8% or 38,769 in March reaching 4.75 million, government officials said on Tuesday. Annual unemployment level added 9.6% in March. In February Spain's jobless rate of 23.6% was the top level in the European Union. Spain currently works on massive reforms in its labour market. Economists expected the unemployment my surge even more before it will begin to decline. USD US manufacturing PMI expanded more than expected last month, indicating growth for the 32th month in line. The PMI measured by the Institute for Supply Management jumped by 1.0 point attaining 53.4 last month as compared to a February figure of 52.4. Experts had predicted the manufacturing PMI in the US to expand by 0.6 points to 53.0. GBP UK manufacturing ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) WORLD Price action in Asia was dominated by month-end and quarter-end flows into the Tokyo fix, on this the last day of Japan‘s fiscal year. The euro, and Australian and New Zealand dollars received a boost, but USDJPY remains heavy as UST yields continue to drift lower. We are wary of joining the rally in commodity currencies given the likelihood of a weak official Chinese March PMI over the weekend, and we would expect risk appetite to begin next week on a softer tone. The latest US economic data was uninspiring with jobless claims falling to 359k from (a revised up) 364k. Q4 GDP growth was unchanged at a 3.0% annual rate though. Fed Chairman Bernanke completed his four-part economics lecture series noting the pace of recovery has been “ ...

Fundamental News Today’s highlights; •GDP (QoQ) (GB, 08:30 GMT) •French GDP (QoQ) (FRA, 05:30 GMT) •German CPI (MoM) (GER, Tentative) •Core Durable Goods Orders (MoM) (U.S, 12:30 GMT) After reporting a substantial improvement in U.S. consumer confidence for the month of February, the Conference Board said its consumer confidence index fell to 70.2 in March from an upwardly revised 71.6 in February. In addition, Home prices in major U.S. metropolitan areas showed a continued decrease in the month of January, according to a report released by Standard & Poor's on Tuesday, The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index fell by an annual rate of 3.8 percent in January. Bank of Japan board member Ryuzo Miyao said Wednesday that the recent pullback in yen ...