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Commentary: Stocks slip heading into FOMC minutes, weather drives commodity trading
00:00, 19 February 2014
US indices have been trading lower again this morning following their European counterparts to the downside today. Although US housing numbers came in below expectations, once again this would likely impacted by particularly poor winter weather this year and discounted by the street. The bigger concern for traders appears to be that the soft data seen so far this year may not be enough to deter the Fed from taking away the punch bowl and continuing its tapering program through the year. FOMC minutes this afternoon may give a better indication of how committed the Fed is to the tapering project. Energy commodities have been climbing for the most part again today. With Natural Gas soaring over 6% to a new 52-week high and heating oil up as well, traders clearly remain fixated on the impact of bad weather on heating demand. Meanwhile US crude and copper remain on the rise as traders look past the winter impact toward the prospects for increased demand for resources as global economies improve. Gold and silver are having another day of consolidation following big breakout rallies. USD appears to be stabilizing near a channel bottom. GBP has been giving back some of its recent gains as a softer than expected but still decent UK employment report takes some of the pressure off the Bank of England to raise interest rates. JPY has been clawing back some of yesterday’s losses in a normal trading correction. Corporate News Devon Energy has agreed to sell some of its conventional Canadian properties to Canadian Natural Resources for $3.1B. Yamana Gold $0.05 vs street $0.07, cuts dividend by 46% Analog Devices $0.49 vs street $0.48, raises dividend by 8% Economic News Economic reports released overnight and this morning include: US housing starts 880K vs street 950K US building permits 937K vs street 980K US producer prices 1.2% s expected UK BoE meeting Minutes 9-0 vote for unchanged as expected UK jobless claims (27K) vs street (20K) and previous (24K) UK unemployment rate 7.2% vs street 7.1% UK 3M employment change 193K vs street 250K and previous 280K Eurozone construction output (0.2%) vs street (1.7%) Australia leading indicator 0.8% vs previous 0.2% Economic reports due later today include: 2:00 pm EST US FOMC minutes