Economic Highlights

The Federal Reserve voted to leave the target range unchanged at 0 to ¼ percents. The committee noted that economic activity continues to improve but household spending remains constrained by a weak labour market. Inflation is expected to remain subdued for some time.

FOMC Statement 09.23.09

Press Release

Release Date: September 23, 2009
For immediate release
Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn. Conditions in financial markets have improved further, and activity in the housing sector has increased. Household spending seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.
With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.
In these circumstances, the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt. The Committee will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010. As previously announced, the Federal Reserve’s purchases of $300 billion of Treasury securities will be completed by the end of October 2009. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
2009 Monetary Policy Releases

Last update: September 23, 2009

FOMC Interest Rate Decision and Statement on Economic Condition 08.12.09

Press Release

Release Date: August 12, 2009
For immediate release
Information received since the Federal Open Market Committee met in June suggests that economic activity is leveling out. Conditions in financial markets have improved further in recent weeks. Household spending has continued to show signs of stabilizing but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing but are making progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability.
The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.
In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve is in the process of buying $300 billion of Treasury securities. To promote a smooth transition in markets as these purchases of Treasury securities are completed, the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.

EIA Petroleum Inventory Report

SUPPLIES

Product......Weekly Chg .....Year-ago Chg
CL ...............+1.7 (0.5%)...... +54.3 (18.4%)
RB.............. -0.2 (-0.1%) ......+6.1 (2.95%)
HO.............. -1.1 (-0.7%),,,, +30.9 (23.7%)
Jetfuel....... +1.4 (3.1%.......... +5.2 (12.6)\%)

DEMAND........Weekly Chg......Year-ago Chg
All Products........ +3.07%........... -6.1%
MoGas....................+0.3% ...........-0.9%
Distill .......................+4.9% ........-10.6%
Jetfuel..................... +3.5% .........-13.0%

Data for distillate components was the main market mover in today's EIA report. Distillate supplies fell 1.1m bbls last week and traders had been expecting a 1.5m bbl build in that fuel

Demand for distillates was up 4.9% for the week and jetfuel demand rose 3.5% for the same period.

CFTC COT Report for week ending .07.21.09

______Spec Post__Net Change____

CL...Long 2,218........Sold 13,939

RB...Short 396..........Sold 814 New Short

HO...Long 22,734..Bought 5,485

NG ..Short 158,436 Bought 6,246

EIA Petroleum Inventory Levels

Changes in oil inventories were inline with pretrade estimates:
Crude fell 1.8m bbls (0.52%) last week and is 15.97% above year-ago levels.
Gasoline rose 0.8m bbls (0.4%) last week and is 3.2% above year-ago levels.
Distillates rose 1.2m bbls (0.8%) last week and is 26.9% above year-ago levels.

Total oil demand rose 0.4% last week and is down 6.3% from last year.
Gasoline demand rose 1.0% last week and is down 1.0% from last year.
Distillate demand rose 0.5% last week and is down 9.5% from last year.
Jet-fuel demand fell 4.7% last week and is down 12.6% from last year.

EIA Oil Inventory Estimates

____API____EIAe____EIAa
CL__+3.1___-2.0
RB__+1.3___+0.7
HO________+1.5

Oil prices weakened in Asian trading after API data showed that oil supplies increased by 3.1mbbls. Traders were expecting 2.0m bbl drop in supplies.

Word that Chinese oil imports for June were 2.8% below the prior month added to
the downward pressure.

EIA Oil Inventory Report Estimates

______API___EST_____EIA___
CL…-1.20.........-2.00.........____
RB…-0.07.........+0.90.........____
HO…+0.63.......+2.00.........____

CFTC COT Report for the week ending 7.7.09

METALS
Large Spec _Net______Chg Change in OI in Juhe
GC____164,144____-42 >>>>>>>>>> -4.5%
SI_____24,126____-652 >>>>>>>>>>+6.6%
HG____-20,961___-897 >>>>>>>>>>-3.2%

ENERGY
Large Spec__Net____Chg
CL____15,357___-25,420 >>>>>>>>>>+5.8%
RB___43,483_____-8,083 >>>>>>>>>>-14.4%
HO___28,612_____-4,216 ...................+6.1%
NG_ -160,481_____-7,212 <<<<<<<<<<+4.5%

FINANCIALS
Large Spec__Net_____Chg
ED____764,585____92,286
FF____108061_____-6589
TU___105,935_____27,130
FV____-31,930_____6,919
TY___-124,849____-12,456
US____-60,393____23,834

FX
Large Spec___Net____Chg
AD____31,886_____-3,104
BP____-9,150_____-5,049
CD_____6,552_____-2,720
DX____-6,631______-314
EC____10,312_____-6,907
JY____17,117______18,164

Weekly Nat Gas Storage Report (for week ending 7.3.09

(Graph from EIA website http://www.eia.doe.gov/oil_gas/natural_gas/ngs/ngs.html )

Curr 2796 +75 Bcf v +85est
Prev 2721
5YrH 2653
5YrA 2344 19.3% above 5Yr Avg
YrAgo 2195 27.4% above last year
5YrL 2062

Summary(Source:EIA)

Working gas in storage was 2,796 Bcf as of Friday, July 3, 2009, according to EIA estimates. This represents a net increase of 75 Bcf from the previous week. Stocks were 601 Bcf higher than last year at this time and 452 Bcf above the 5-year average of 2,344 Bcf. In the East Region, stocks were 114 Bcf above the 5-year average following net injections of 60 Bcf. Stocks in the Producing Region were 245 Bcf above the 5-year average of 768 Bcf after a net injection of 12 Bcf. Stocks in the West Region were 93 Bcf above the 5-year average after a net addition of 3 Bcf. At 2,796 Bcf, total working gas is above the 5-year historical range.

EIA Oil Inventory Report

...........API……Est…….Act Chg….....W%Chg…..Y%Chg
Crude___-1.4 ___-3.2 ____-2.9____ -0.8%__+17.9%Mogas___+0.8__+0.9_____+1.9____+0.9%__+01.7%
Distill __+ 3.4 ___+1.7_____+3.7____+2.4%__+30.4%

Mogas demand rose 1.9% for the week; down 0.8% from ‘08
Jet-fuel demand fell 1.2% for the week; down11.3% from ‘08
Distillate demand fell 6.7% for the week; down 9.4% from ‘08

A negative report for a number of reasons:
A smaller than expected drop in crude inventories. Supplies 18% above last year
Gasoline and distillate supplies rose more than expected
Demand for jet-fuel and distillates dropped last week

http://tonto.eia.doe.gov/oog/info/twip/twip.asp

Oil Inventory Report Estimates & API Data

..................API……..Platt’s Est
Crude ..... -1.4 ........ -3.2
Mogas .... +0.8 ....... +0.9
Distill .......+ 3.4 ....... +1.7

CFTC COT Report for the week ending 6.30.09

............Lrg Spec ......Chg
CL .....40,777 .....1,407
RB.....51,566 .....-3,681
HO .....32,828 .....1,481
NG .-153,269 .....539

GC ..164,186 ..... -2,108
SI.....24,778 ..... -1,427
HG .-20,064 ..... 1,671

(I'm still having formatting issues)

Outlook for Thursday 07.02.09

Double Dose of Employment Data @ 7:30 CT
June '09 Employment Situation Report
Cons: -350,000 vs -345,000 prior Unemployment Rate 9.6% vs 9.4% prior

Weekly Claims:
Cons:619,000 vs 627,000 prior

Factory Orders @ 9:00 CT
Cons: 1.4% vs 0.07% prior

EIA Natural Gas Inventory Report @ 9:30 CT
Cons: +75 vs +104 prior

Holiday Notice:
Markets close and reopen for the next trade date at their regular times today.
On Friday 07.03.09 Trading will halt as follows:
Equities @10.30 CT Financials @ 12:00CT Oils & Metals @ 12:30CT

EIA Weekly Oil Supply Data

EIA Est EIA Actual API Actual Vs Est
Crude -2.0 -3.7 -6.8 -2.0
RBOB +2.0 +2.3 +0.2
Dist +1.5 +2.9 +0.75
Should be a bit negative. Gasoline & distillates up more than expected. Crude fell more than estimates, but not as much as the surprising API numbers last night. Weakening demand in all 3 categories and an increase of Cushing, OK supplies should also serve to keep a lid on prices.

( I am still experiencing problems with the formatting of data.Please bear with me.)

Notes on the 2nd Quarter

At the close of 1Q’09 I sent clients the FIA’s “Annual Volume Survey” to assail doubts they were having over their trading systems. In essence I told them that it was a failure of the “marketplace” itself that was to blame for their trading system’s sub-par performance. I compared volume and open interest from 1Q08 to 1 Q09 to illustrate how the debt crisis was impacting the market place. At that time, corn OI was down 42% from the prior year and volume was 25% below year ago levels. In crude oil, OI was down 16% with volume down 23%...
During this quarter corn OI jumped 25% m-o-m and is now 2% below 2Q08.
While crude oil OI is 20% below same time last year numbers, with volume almost 50% below year-ago numbers. In the financials, both OI and volume levels are about 50% below last year.
But these y-o-y comparisons don’t give an accurate assessment of where the markets are today. If you will remember, last year had two distinct phases: the boom in the first half & the bust in the second half. Investor activity peaked in the second quarter and then quickly disappeared as dire financial news spread through the second half of the year.
Year-to-date activity levels have been mixed so far this year as this table illustrates;
%Y-T-D Change Volume OI
Corn +12% +17%
Crude +1% -5%
Ten Year Note +30% -3%

So for now, a systemic market collapse has been avoided and people still have to eat (grains), drive (crude) and emerging markets will continue to build industrial plants (base metals).

Technically, commodity prices have plenty of room to rebound on the upside after last year’s dramatic collapse

CME Group Statement on PSI Analysis of Wheat Markets

CME Group Statement on PSI Analysis of Wheat Markets

CFTC COT Report for the week ending 6/2309

Energy Lrg Spec Chg
Crude 39,370 12,940
RBOB 55,247 -7,144
H Oil 31,347 971
N Gas -153,808 -445

Metals Lrg Spec Chg
Gold 166,294 -9,249
Silver 26,205 -3,190
Pall 8,085 -345
Plat 9,918 775
Copper -21,735 -3,271

Rates Lrg Spec Chg
Fed Fnd 133,471 -10,003
EuroDlr 573,437 +66,133
2 Yr 76,960 21,506
5 Yr -37,776 -24,122
10 Yr -87,147 6,580
30 Yr -85,539 241

Stk Indx Lrg Spec Chg
Mini S&P 186,464 +7,357
M Nasdaq 26,103 -32,021
(Source: CFTC)

EIA Nat Gas Inventory Report 06.25.09

For Week Ending 6.19.09
Lower 48 Nat Gas Supplies
Act +94 Est +98 Last Week +114 Year ago +85 5Yr Avg +84
Current = 2,651
Last week= 2,557 + 3.70% from last week
5 Yr Max = 2,504 +5.95% from 5 Yr Max
5 Yr Avg = 2,169 + 22.2% from 5 Yr avg
Year Ago = 2,020 + 31.2% from last year
5 Yr Min = 1,858

Summary
Working gas in storage was 2,651 Bcf as of Friday, June 19, 2009, according to EIA estimates. This represents a net increase of 94 Bcf from the previous week. Stocks were 631 Bcf higher than last year at this time and 482 Bcf above the 5-year average of 2,169 Bcf. In the East Region, stocks were 115 Bcf above the 5-year average following net injections of 70 Bcf. Stocks in the Producing Region were 265 Bcf above the 5-year average of 732 Bcf after a net injection of 12 Bcf. Stocks in the West Region were 102 Bcf above the 5-year average after a net addition of 12 Bcf. At 2,651 Bcf, total working gas is above the 5-year historical range.
(Source EIA)

GSH Analysis
The smaller –than-expected build is a slightly positive but the market remains well supplied. The excessive heat may also be providing underlying support. Note that July options expire today and July futures expire at the end of pit trading tomorrow

Text of FOMC Meeting

Press Release

Release Date: June 24, 2009
For immediate release
Information received since the Federal Open Market Committee met in April suggests that the pace of economic contraction is slowing. Conditions in financial markets have generally improved in recent months. Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability.
The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.
In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
2009 Monetary Policy Releases

EIA Petroleum Inventory Levels

EIA Weekly Inventory Report for week ending 6.19.09
(Barrels in millions)

Crude
Stocks 353.9 -3.8 for the week; +52.1 from last year
Price $69.60 -2.53 for the week; -65.18 from last year.

Petrol
Stocks 208.9 +3.9 for the week; +0.1 from last year.
Price 187.3 -13.0 for the week; -141.7 from last year.

Distil
Stocks 152.1 +2.1 for the week; +32.7 from last year
Price 176.8 -5.2 for the week ;-203.7 from last year

Demand for crude was up on the week, while demand gasoline and distillate demand fell.
Refinery use was up 1.15% in preparation for increased holiday driving demand.

The Week Ahead 06.22.09 thru 06.26.09

Mon 06.22.09
Ags
Export Intentions
Crop Progress

Fins
None

Tues 06.23.09
Ags
None

Fins
Existing Home Sales
Richmond Fed
FOMC Meeting

Wed 06.24.09
Ags
None

Fins
Mortgage Appl
Durable Goods
New Homes Data
FOMC Announce

Energy
Oils Invents

Thurs 06.25.09
Ags
Exports

Fins
GDP
Per Con
Weekly Jobs

Energy
Nat Gas Inventories

Friday 06.26.09

Ags
None

Fins
Personal Income & Spending
Consumer Sentiment

CFTC COT Report for the week ending 6/16/09

Large Spec Change
Gold + 175,543 -14,131 Longs reduced by 7.4%
Copper -18,464 +305 Shorts reduced by 1.6%


Crude +26,430 -21,453 Longs reduced by 44.8%
Nat Gas -153,363 -13,710 Inreased shorts by 9.8%


EuroDlr +507,304 +13,957 Increased longs by 2.8%
2 Yr +55,454 -27,429
5 Yr -13,654 -22,222 New short
10 Yr -93,727 3,921 Reduced shorts by 4%


Sorry, this is only a partial recap of the report. I am having difficulty moving the data from excel
to Word format.

False Start

I haven't been able to format things the way I would like. I had envisioned posting data from reports in table format and then verbally analyzing what market impact that the numbers might have. But I haven't found a way to do it quickly and easily. So bear with me while I try to figure this out.

This site is under construction