Weekly Wrap-Up 28 February 2014

February 28th, 2014
in contributors, syndication

U.S. markets mixed at close; Dow Jones up 0.30%

by Staff,

U.S. stocks were mixed after the closing bell on Friday.

At the close of U.S. trade, the Dow Jones Industrial Average rose 0.30%, the S&P 500 index gained 0.28%, while the Nasdaq 100 index declined 0.10%.

Follow up:

Meanwhile, across the Atlantic, European stock markets were mixed at close. France's CAC 40 was up 0.27%; Germany's DAX gained 1.08%; Britain's FTSE 100 declined 0.01%; and the EURO STOXX 50 rose 0.16%.


The dollar was broadly lower against the other major currencies on Friday, as the release of positive euro zone economic reports supported demand for the single currency, while demand for the greenback remained under ahead of a report on economic growth in the U.S.

The dollar was lower against the euro, with EUR/USD up 0.61% to 1.3793.

Preliminary data showed that consumer price inflation in the euro zone remained unchanged at an annualized rate of 0.8% in February, compared for expectations for a downtick to 0.7%.

A separate report showed that the unemployment rate in the single currency bloc remained unchanged at 12% in January, in line with expectations.

The positive data eased speculation that the European Central Bank could cut interest rates at its policy meeting next week.

Earlier in the day, official data showed that German retail sales rose 2.5% last month, exceeding expectations for a 1% increase. Retail sales in December were revised to a 2.1% drop from a previously estimated 2.5% decline.

A report also showed that French consumer spending dropped 2.1% in January, compared to expectations for a 0.2% rise. Consumer spending in December was revised up to a 0.2% increase from a previously estimated 0.1% slip.

The pound was higher against the dollar, with GBP/USD rising 0.34% to 1.6745.

The Nationwide Building Society earlier said that U.K. house price inflation rose 0.6% in February, in line with expectations. In January, house price inflation was revised up to a 0.8% increase from a previously estimated 0.7% rise.

The dollar was lower against the yen and the Swiss franc, with USD/JPYslipping 0.27% to 101.83 and with USD/CHF declining 0.68% to 0.8823.

In Japan, oreliminary data showed that industrial production in Japan rose 4% in January, more than the expected 3% increase, after a 0.9% gain the previous month.

A separate report showed that retail sales in Japan rose 4.4% last month compared to a year earlier, after a 2.6% increase in December. Analysts had expected retail sales to rise 3.8% in January.

Data also showed that household spending in Japan rose at an annualized rate of 1.1% last month, beating expectations for a 0.2% uptick, after a 0.7% rise in December.

Meanwhile, Tokyo's core consumer price inflation, which excludes fresh food, rose at an annualized rate of 0.9% in February, above expectations for a 0.8% advance, after a 0.7% increase in January.

Consumer price inflation in Tokyo rose 1.1% in February from a year earlier, after a 0.7% gain the previous month.

The greenback was steady to lower against the Australian, New Zealand and Canadian dollars, with AUD/USD down 0.04% to 0.8962, NZD/USDclimbing 0.59% to 0.8418 and USD/CAD inching 0.05% higher to 1.1129.

Data showed that the ANZ business confidence index for New Zealand rose to a nearly 20-year high of 70.8 in February, from a reading of 64.1 the previous month.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.54% to 79.86.

Later in the day, the U.S. was to release revised data on fourth quarter growth, as well as a report on manufacturing activity in the Chicago region, revised data on consumer sentiment and private sector data on pending home sales.


Gold futures slipped lower on Friday, after Federal Reserve Chairwoman Janet Yellen said the bank will continue tapering its monthly bond purchases, while investors eyed the release of U.S. economic growth data later in the day. When the day ended gold closed at 1,326.4, down 5.40 (-0.41%) for the day. Gold was down 1.12% from its high on Monday.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,328.70 a troy ounce during European afternoon trade, down 0.23%.

The April contract settled 0.29% higher on Thursday to end at USD1,331.8 a troy ounce.

Gold futures were likely to find support at USD1,307.70 a troy ounce, the low from February 20 and resistance at USD1,345.50, the high from February 26.

Demand for the safe haven precious metal weakened after Federal Reserve Chair Janet Yellen on Thursday said the central bank will probably continue tapering its asset purchases while tracking data to figure how much recent softness in the economy is due to the weather.

Ms. Yellen was speaking in testimony to the Senate banking committee in Washington.

But gold prices still remained supported amid growing tensions in Crimea, after armed men seized the local parliament on Thursday and raised the Russian flag.

The events occurred after Russian President Vladimir Putin ordered 150,000 Russian troops to begin military exercises in central and western Russia, near the border with Ukraine.

Elsewhere on the Comex, silver for May delivery fell 0.27% to trade at USD21.295 a troy ounce, while copper for May delivery slipped 0.21% to trade at USD3.194 a pound.


Crude oil futures edged lower during early European trading hours on Friday, as markets eyed the release of U.S. economic growth data later in the day, while Federal Reserve Chairwoman Janet Yellen said the bank will continue tapering its bond purchases.

On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD102.06 a barrel during European morning trade, down 0.34%.

The April contract settled down 0.19% on Thursday to end at USD102.40 a barrel. On Friday crude eventually closed up 0.28 (+0.27%) at 102.68.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery edged down 0.07% to trade at USD108.89 a barrel, with the spread between the Brent and crude contracts standing at USD6.83 a barrel.

Natural Gas

Natural gas futures plunged on a bearish supply report earlier Thursday, though bottom fishers swept in and brought prices back into positive territory on the view the asset was oversold.

On the New York Mercantile Exchange, natural gas futures for delivery in April traded at $4.550 per million British thermal units during U.S. trading, up 0.19%. The commodity hit session high of $4.565 and a low of $4.447.

The April contract settled down 3.20% on Wednesday to end at $4.541 per million British thermal units but was back up to $4.613 at the close on Friday.

Natural gas futures were likely to find support at $4.205 per million British thermal units, the low from Jan. 19, and resistance at $5.207, Monday's high.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ending Feb. 21 fell by 95 billion cubic feet, short of market expectations for a decline of 107 billion cubic feet.

Total U.S. natural gas storage stood at 1.348 trillion cubic feet. Stocks were 905 billion cubic feet less than last year at this time and 711 billion cubic feet below the five-year average of 2.059 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 361 billion cubic feet below the five-year average, following net withdrawals of 78 billion cubic feet.

Stocks in the Producing Region were 251 billion cubic feet below the five-year average of 775 billion cubic feet after a net withdrawal of 5 billion cubic feet.

Markets were expecting a recent cold snap would have taken its toll on supplies more than it did, which sparked a selloff until bottom fishing kicked in.

Prices also came under pressure after updated weather-forecasting models called for a return of milder temperatures across the eastern U.S.

The U.S. National Weather Service said that higher temperatures than previously forecast were expected in the Midwest from March 6 to March 10.

Prices rallied to over a five-year high of $6.493 per million British thermal units earlier in the week as frigid winter temperatures in the U.S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes.

The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.


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