Market Overview by Windsor brokers Ltd

Herve · #1 (**permalink**) 02-21-2008, 06:12 AM

Market overview for the 21th February 2008.

Currencies

The dollar rose on Wednesday but gains were constrained amid indications that the Federal Reserve would likely continue cutting U.S. interest rates to heal an ailing economy even as inflation pressures mount.

Minutes of the Federal Open Market Committee's Jan. 29-30 policy meeting showed most officials saw risks to growth as weighted on the downside. The Fed also lowered its 2008 growth forecast to between 1.3 percent and 2 percent, from a forecast of between 1.8 percent and 2.5 percent in November.

News that underlying inflation accelerated at a faster-than-forecast pace in January had earlier cooled expectations of steep rate cuts by the Fed, sending the Euro tumbling to a session low of $1.4615.

The dollar gained half a percent versus the Swiss franc to 1.0996 francs, while sterling dropped to a one-month low at $1.9356. The pound last traded at $1.9412, down 0.3 percent from late on Tuesday.

Oil's surge above $100 per barrel, marking a record for a second straight day, pushed the dollar to a session low of C$1.0107. The dollar last traded down 0.4 percent at C$1.0126.

Energy

U.S. crude oil futures ended higher on Wednesday, propped up by a late short-squeeze on March crude that expired at the close.

The front-month contract earlier surged to a fresh record above $100 for a second day in a row before backing down on profit-taking.

On the New York Mercantile Exchange, April crude settled at a record $100.70 a barrel, rising 70 cents or 0.70 percent.

The intraday high erased Tuesday's record of $100.10 and with the settlement is the highest for a front-contract since NYMEX launched crude oil futures in 1983.

In London, April Brent crude dropped 14 cents or 0.14 percent to settle at $98.42 a barrel, trading from $96.77 to $99.22, a record that eclipsed Tuesday's $98.70.

The U.S. Energy Information Administration inventory data due on Thursday is expected to show that crude and gasoline stocks rose last week, poll of analysts showed on Wednesday.

Precious metals

Gold rose to a record high on Wednesday, reversing early losses as a sharp turnaround in crude oil prices and a U.S. report on rising consumer prices boosted bullion's appeal as a hedge against inflation.

Platinum slipped on profit taking, ending a record-setting streak after 14 straight days of gains. But analysts said it persistent supply problems should start platinum back on its upward path after a pause.

Gold rose to $934.80/935.60 by New York's late quote at 19:15 GMT from $927.00/927.80 on Tuesday.

Bullion's gains accelerated in late afternoon trade, reaching an all-time high of $943.20.

Platinum had fallen as much as 3 percent, after surging 43 percent in less than a month on worries the market deficit would widen sharply this year following output losses in top producer South Africa due to an electricity supply crisis.

Platinum fell as low as $2,065 per ounce and was quoted at $2,120/2,130, down from the New York close of $2,140/2,150 on Tuesday, when it hit a record high of $2,160.

Silver edged down to $17.81/17.86 an ounce from its previous New York finish of $17.36/17.41.

Stock Indices

U.S. stocks rose on Wednesday as a strong profit outlook from Hewlett-Packard Co lifted technology shares and the Federal Reserve signaled its intention to keep cutting rates.

Hewlett-Packard shares jumped nearly 8 percent while International Business Machines Corp rose 2.7 percent as investors bet strong overseas sales will sustain profits in the computer industry. HP shares led the major advancers in both the Dow and the S&P 500.

The broader market slipped in early trading after data showing a surge in consumer prices last month, raising concern that the Fed may have to hold back on further rate cuts.

Later, minutes from the Federal Reserve's latest policy-setting meeting revived optimism that the central bank will stay aggressive to keep the economy from falling into recession.

The Dow Jones industrial average shot up 90.04 points, or 0.73 percent, tot 12,427.26. The Standard & Poor's 500 Index gained 11.25 points, or 0.83 percent, to 1,360.03. The Nasdaq Composite Index advanced 20.90 points, or 0.91 percent, to 2,327.10.

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Analytic-Eye · #2 (**permalink**) 02-21-2008, 06:19 AM

Hi,

indeed the signals are mostly positive for North American stock markets after gold and platinum jumped to record highs overnight and oil is testing the US$100 a barrel.

Jump on the waggon but remember to jump out at the right time...

Rgds,