Market Review By TraderXP:
Gold futures fell for the third consecutive session on signs that the Federal Reserve policy of manufacturers could end monthly purchases of U.S. debt this year.
Drop today followed the longest weekly drops since May 2004. January 3 minutes from the Federal Reserve showed $ 85 billion in monthly purchases of bonds, the third round of so-called quantitative easing is likely to be completed sometime in 2013. Gold gained 5.1 percent in September, the central bank announced stimulus measures.
"The market is dull, because people want some clarity from the Fed," Adam Klopfenstein, senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview.
Market News
U.S. stocks retreat from five-year high, euro gains
Wall Street stock prices retreated from five-year highs on Monday, while the euro rose against the dollar on bets the European Central Bank may refrain from signaling more interest rate cuts on Thursday.
Weakness in the securities market, in part because forward tocaution companies begin to report on fourth-quarter earnings, which the sale of oil, gold and other risky investments. This stoked a safety bid for U.S. government debt, and Germany.
Investors turned their attention to corporate profits in the last three months of 2012, when the growth of the U.S. holiday spending andcorporate investment was cool, as buyers and the company won back to worries about the United States transition "financial cliff" - a series of automatic tax hikes and government spending cuts that could down if the budget deal in Washington were not achieved in the last week.
"There is little doubt that the concern about the financial cliff created fluctuations in the conduct of both consumers and businesses in the fourth quarter, and it is likely, which could adversely affect earnings season," said Randy Frederick, managing director of active trading and derivatives at Charles Schwab in Austin , Texas.
Earnings are expected to be slightly better than in the third quarter in lackluster results and current analyst estimates have fallen sharply, than they were in October.
"I think it would be a disappointment this time around," Peter Cardillo, chief market economist at Rockwell Global Capital in New York, said of the upcoming earnings season, which unofficially kicks off with aluminum producer Alcoa reporting market close its results afterTuesday author.
Concern about corporate profits were even after data on Friday showed U.S. employers constantly modest rate of hiring in December and a huge service sector expanded.
Hopes for global recovery gained new impetus after the Basel Committee on Banking Supervision agreed to give banks another four years, and greater flexibility than previously to build a protective buffer funds. This means that they can use more of their reserves to lend and help the economy grow.
In the United States, more news schedule for banks to manage their capital, was marred by 10 banks, agreeing to pay $ 8.5 billion to settle a federal review of their questionable collection practices.
Index Dow Jones Industrial Average closed down 50.92points, or 0.38 percent, to 13,384.29. 500 Index Standard & Poor finished 4.58 points, or 0.31 percent, lower at 1,461.89. The Nasdaq Composite Index finished down 2.84 points, or 0.09 percent, to 3,098.81.
Among the biggest day of engines were Nationstar Mortgage Holdings, whose shares jumped 16.9 percent to $ 38.83 after the Bank ofAmerica entered into a deal to sell the rights to service more than $ 300 billion in loans ofhome Nationstar and Walter Investment Management.
Walter shares rose 8.2 percent to $ 47.68.
After touching a 22-month peak last week, FTSEEurofirst index of leading European shares ended 0.49 percent lower at 1,161.57, while the banking sector in the region, as measured by the index STOXX euro zone bank. SX7E bucked the trend of the market, receiving 1.5 percent on news of Basel bank capital.
Ample stocks world MSCI index fell 0.2 percent to 347.01, but was still not far below the 18-month peak scaled, as investors returned to the market after direct U.S. financial crisis was averted last week.
GAINS euros to the ECB meeting
In the currency markets, the euro was up 0.31 percent in late trading at $ 1.3115, erasing earlier losses. He spent over a three-week low of $ 1.2998 hit on Friday.
Analysts predicted that the single currency will remain around these levels until after the meeting of the ECB. Some expected the ECB points to prospects for reducing rates in the beginning of this year from the current 0.75 percent, contrasting with the signals from the Federal Reserve policy makers that the U.S. central bank may continue to less adaptive policy in the future.
Bank of Japan to take major steps to stimulate the economy of the country at the end of this month, the new government to end deflation and recession.
The dollar weakened against the yen, last down 0.49 percent at 87.73 yen. On Friday, the dollar rose to 2-1/2- year high of 88.12 yen, based on Reuters data, which some traders believe was exaggerated.
Wait less loose monetary policy by the Fed this year relaxed renewed application for asylum to the U.S. national debt. Treasury yield on benchmark 10-year notes was 1.90 percent, little changed from Friday, when it ticked up to eight-month high of about 2 percent.
German Bund futures ended by 34 basis points to 143.09, recovering from a one-month low hit last week.
Weakness in stocks dragged oil prices lower, but the signs of improvement in the world economy revived application for futures, erasing its losses in late trading.
Gold prices fell again and got stuck near their session lows.
Brent crude futures ended 9 cents or 0.08 percent at $ 111.40 a barrel, after rising 0.6 percent last week, while U.S. oil futures settled down 10 cents, or 0.11 per cent higher in $ 93.19.
Spot gold fell by 0.56 per cent at $ 1,646.96 an ounce, although higher Friday $ 1,625.79, the lowest price since August. Reuters.com
Currencies
Euro is rising against the dollar ahead of ECB meeting, the yen recovered
The euro rose for the second straight session against the dollar on Monday, buoyed by expectations that the European Central Bankwill refrain from cutting interest rates at its meeting later this week.
The U.S. currency, however, retreated from 2-1/2 year high against the yen as a safe appreciation for the past month, were investors prefer to book profits, despite the forecasts of further bank stimulus in Japan later this month.
With little U.S. economic data reported ThisWeek currency is likely to be driven by the ECB meeting on Thursday, comments from an array of Fed speakers, as well as the mood in other asset classes such as stocks.
"Euro / dollar is provided by expectations that the Fed will maintain easy monetary policy that drives the currency pair higher," Sebastian said Gali, a currency strategist at Societe Generale in New York.
"Attacks of risk aversion are more likely to hit the yen crosses through sentiment, considering how much they have moved in recent weeks," he said.
Minutes of the December meeting of the Fed released last week raised expectations that the central bank can stop bond buying program, known as quantitative easing, this year, but the lackluster non-farm payrolls report last Friday, some expect the U.S. central to maintain the status quo.
Euro last traded at $ 1.3108, down 0.3 percent on the day, and well above last week's three-week low of $ 1.2997. Volatile trading activity defined the day, with a session low of $ 1.3016 and a peak of $ 1.3119.
Movement of the euro above also gained strength with headers that Silvio Berlusconi will not stand as a candidate in the Italian Minister forprime elections next month in accordance with the terms of the deal with the Northern League coalition.
George Davis, chief technical analyst at RBC Capital Markets, in Toronto, said the euro / dollar last Thursday issued a bearish trend reversal below $ 1.3100.
"I'm not sure if this is due to discuss the debt ceiling at this stage, as many think that it will heat up and get lost in February and March," he said. "However, if this is so, and it's frustrating the stock markets, the resulting" risk on "environmentwould be one that is positive for the dollar."
"So, I would keep an eye on this topic for the next 2-4 weeks," he said.
Trade must be more volatile in weeksahead, heated American political debate on raising the government borrowing limit, or debt ceiling, and absorbed to reduce costs, to be held in early March can bring the dollar due to its status as a safe haven.
Analysts warned the euro was more likely to remain under pressure as markets shift to the euro zone gloomy economic landscape and the ECB meeting. Any indication that monetary stimulus or comments on the economic weakness could push it even further.
"While the Bank has stated its readiness to cut interest rates this year we do not expect a rate cut at the meeting this week, as price pressures increased from core inflation picking up a bit," said Eric Viloria, senior currency strategist at Forex.com . "As economic activity continues to decline, we believe that the ECB will eventually cut rates in the coming months."
Investors are also looking for Spanish and Italian bonds auction at the end of the week. If sales are strong demand, theeuro may receive in relation to the dollar.
Expectations of aggressive easing of monetary BOJ led to the dollar to rally more than 8 percent against the yen since the beginning of December. The Bank of Japan is going on 21-22 January.
Audrey Childe-Freeman, head of currency strategy at BMO Capital Markets in London, said there was a risk that the Bank's operations in Japan can keep up with market forecasts, which led to the dollar to weaken.
"There is a risk that the market got a little carried away, and we do not see as much as we had hoped (from BOJ), and we see a pullback in the dollar / yen."
Traders also said that the yen was supported on fears that the deal Japanese mobile operator Softbank Corp to buy 70 percent of the U.S. carrier Sprint Nextel Corp could face complications.
The euro fell 0.1 percent to 115.12 yen, well below the 18-month high of 115.99 yen last week.
Against the yen, the dollar fell 0.4 percent to 87.78 yen, off peak 88.40 yen on Friday, which was its strongest since July 2010, according to Reuters. Reuters.com
