Notes From My Desk – April 5, 2012

By FXEmpire.com

On quiet news days, when there is nothing exciting to write about, and the day has been made up of snippets of news from here and there, I like to share my desk diary, the notes that I have jotted down all day.

Throughout the day, I am watching and researching the news and markets. As I find things of importance or interest I jot them down in a random sort of way. They are usually sectioned into geographic regions, but not for sure. I can usually find what I need.

Some days these notes take up several pages and other days like today they are relatively short.

I do not remember the sources of these notes, as I only write them down for their research value, so I hope their authors or sources do not care that I am sharing them. A lot of readers, comment when I publish these, that I should do it more often.

So here are my notes from today, April 5. Also all the best during this holiday weekend to my readers. Please share your comments if you are so inclined.

The number of Americans who filed requests for jobless benefits fell by 6,000 last week to 357,000, the U.S. Labor Department said Thursday. Economists had projected claims would total 360,000,

The euro traded at 1.2017 Swiss francs in recent action on Thursday, a loss of 0.1% on the day, after earlier falling below the CHF1.20 floor set by the Swiss National Bank last year. The SNB has previously said it would defend the floor with “utmost determination,” indicating it was prepared to intervene in forex markets to cap the strength of the Swiss franc.

The French government sold 8.439 billion euros ($11.1 billion) of various government bonds Thursday, near the top end of its range of 7 billion to 8.5 billion euros, but saw borrowing costs rise. France’s debt agency said it sold 1.31 billion

Spanish and Italian bond yields continued to rise on Thursday, as the broader European equity market declined. Yields on 10-year Spanish government bonds added 5 basis to 5.71%, the highest level since December last year

Spanish 10-year yield rises 8 basis points and rise to the highest level since December on Thursday, as the effects from the European Central Bank’s cheap lending program start to wear off, analysts said

The Bank of England, as widely expected, left its key lending rate unchanged and made no alterations to its 325 billion pound ($516.8) program of asset purchases. The central bank’s key lending rate has stood at a record low 0.5% since March 2009

Office for National Statistics said manufacturing production fell by 1% in February, slipping below analysts’ expectations of a 0.1% increase.

The Society of Motor Manufacturers and Traders, or SMMT, said Thursday the March new car market beat expectations with a 1.8% rise to 372,835 units, making a a rise of 0.9% over the first quarter

Natural-gas futures added to losses Thursday after a weekly government report showed higher-than-expected supplies for the week ended March 30. Natural gas for May delivery declined 3 cents, or 1.2%, to trade at $2.12 per million British thermal units. It had traded at $2.14 before the data.

The Australian dollar has been a star performer in recent times, spending most of the past year comfortably above the 100 US cent level.

However, the currency has run out of steam lately, dropping more than five cents in the past month.

Silver’s wild days may be behind it.

The so-called devil’s metal raced up a mere 33% in the first two months of 2012, before giving up almost half of the gains. But for silver, this is relatively smooth sailing. Last year, it chalked up a 57% rally between January and April, before finishing 2011 down 9.8%.

High collateral requirements are helping keep price volatility at bay. Initial margin paid on benchmark Comex 5,000-ounce silver futures is $21,600, which equates to about 13% of the notional value of a contract. The equivalent figures for gold and crude oil are $10,125, or 6%, and $6,885, or 6.6%, respectively.

Silver’s fortunes are more exposed to the global economy. Industrial applications, photography, electronics and jewelry accounted for about 86% of total demand in 2011, according to CPM. Being bullish on more industrial demand for silver is difficult with Europe’s economy in the mire, slower growth seen in China and a fragile recovery in the U.S. Hence, silver futures are down 10.5% from their February peak of $37.14 a troy ounce.

Silver would likely get a boost in the event of a decisive economic upturn or further monetary easing. Unfortunately, these two outcomes represent scenarios at the extremes of optimism and pessimism about the economy. And the Federal Reserve’s latest minutes dented hopes for more quantitative easing. The current reality of sluggish but persistent economic recovery amid multiple headwinds is less striking–with all that this implies for silver prices.

Gold futures rebounded Thursday after investors bought into metals beaten down in the previous session on dashed expectations of further U.S. monetary stimulus.

Although gold prices may soon bottom if macro hedge funds or other investors sense that the market is becoming oversold, analysts believe that bullion prices rebound only on emerging-market demand or fresh official-sector buying. A gold price drop below $1,600/ounce could attract such buying,

Originally posted here