Industrial Action And Operational

Wall Street's biggest banks are locked in an increasingly frantic struggle with the Federal Reserve over the right to retain the jewels of their commodity trading empires: warehouses, storage tanks and other hard assets worth billions of dollars. While the battle over proprietary trading and new derivatives regulations has taken place largely in public view since the 2008 financial crisis, the fight by JPMorgan Chase, Morgan Stanley and Goldman Sachs to retain or expand their prized physical commodity operations - most acquired in only the past six years - has remained hidden. The debate is nearing an inflection point: Within 18 months, the Fed will likely either allow banks more freedom to invest in the physical commodity world than ever; or force them to sell off the assets that many ...

(Reuters) - Gold prices bounced back into positive territory on Tuesday, paring earlier losses in line with a rallying euro after a Greek official said the government is drafting an agreement on a second bailout. Spot gold was up 0.3 percent at $1,723.89 an ounce at 1502 GMT (10:02 a.m. EST), having earlier fallen as low as $1,709.29 an ounce, while U.S. gold futures for February delivery were up $1.70 at $1,726.60. A Greek government official said Greece's government is preparing the text of an agreement on a 130 billion euro bailout that will be put to political leaders for approval, suggesting Athens had largely wrapped up talks with lenders on the rescue. A conclusion to the discussions would likely to support gold, although it has struggled to maintain upward momentum as the ...

(Reuters) - Gold prices eased towards $1,710 an ounce on Tuesday in line with a softening euro as traders awaited a breakthrough on talks over a second bailout deal for Greece, with its leaders fighting to avoid a chaotic debt default. Spot gold eased 0.4 percent to $1,712.79 an ounce at 1210 GMT (7:10 a.m. EST), while U.S. gold futures for February delivery were down $10.20 at $1,714.70. While a retreat in stock markets and the euro kept gold under pressure on Tuesday, the precious metal still is up 10 percent so far this year after December's sharp drop, supported by a Federal Reserve pledge to maintain ultra-loose monetary policy. The euro eased 0.2 percent versus the dollar. For Greece, failure to secure the 130 billion euro ($170 billion) rescue would mean it faces a messy debt ...

Weekly Economic and Financial Commentary : 04/11/2011 U.S. Review Slow But Steady Progress Nonfarm employment rose by 80,000 jobs in October and data for the previous two months were revised up. The unemployment rate fell to 9.0 percent. October's ISM surveys remained consistent with modest economic growth. Both the manufacturing and non-manufacturing surveys ticked down marginally in October, but remain slightly above the key 50.0 break-even level. Motor vehicle sales turned in another solid performance in October, running at a 13.2 million unit annual rate. Sales of luxury vehicles were particularly strong. Another Small Step in the Right Direction Much has been written about the problems economies face in recovering in the aftermath of financial crisis. Research by the ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) USD The Eurozone just might be able to stay out of the limelight later today as the Fed decision is due. Our base case remains for some form of ‘Operation Twist’ but we do not believe this will have the dollar debasement effect that QE2 had. Our analysts also note that given the unusual level of dissent within the FOMC, investors should not expect any form of action as a given. More data is needed and the Eurozone crisis and the potential disruption to financial markets has probably factored into the Fed’s overall assessment. In the Eurozone, the Greek Finance Ministry has expressed confidence in obtaining the next tranche of aid as Troika members are expected to return to the country soon. However, developments in other Eurozone countries are ...

EURUSD traded above 1.2700 but lacked the momentum to drive above the 1.2800 level. Part of the reason for the restrained market activity may be the EU Bank Stress test results expected to be released next Friday. While some say the release will be good for risk-correlated trades due to the high level of transparency – we believe this may only be the case if the anticipated cost of recapitalizing about-to-fail banks is manageable. We suspect that much of the optimism surrounding the report has already been priced in while the risk of a negative surprise is comparatively higher. Further, just because European officials have been able to take a single snapshot of the banking sector doesn’t means a bailout solution isn’t necessary nor that further erosion of banks’ balance sheets can be ...

The EURUSD continued to tumble as a unnamed source, said that German Chancellor Merkel stated there will be no decision on a bailout package for Greece by the end of the EU’s two day summit in Brussels. The EURUSD traded below the 1.3425 key support (low May 2008) down to 1.3406, while the GBPUSD traded down to 1.4957 (at the time of writing). The public rift between Germany and EU officials on the Greek situation seems to be increasing daily, dimming markets optimism and weighting heavily on the EUR. There are growing rumors of short term bets against the EUR ahead of what many feel (including us) will be a disappointing close to Brussels. However, there are still EU officials actively searching for a solution, including the President of the EU Council Von Rompuy who was reported trying ...