Leonard Ullrich Neumann Raises Outlook for 2nd Half of 2013
Online, June 13, 2013 (Newswire.com) - Leonard Ullrich Neumann raises outlook for 2nd half of 2013
A surprise rise in U.S. retail sales in April supported views that the U.S. economy, the world's biggest, remains resilient. The optimistic tone to the data supported the dollar's recent strength, and Leonard Ullrich Neumann raised its outlook for second-quarter growth.
On Wall Street, the broad S&P 500 index reversed earlier losses on profit-taking following last week's stellar run to record highs, while weakness in the top European banking sector knocked the region's share prices lower.
"The value of the dollar has weighed on the prices of all commodities, specially the more sensitive ones such as oil and gold," said Hans Koopmann, head of commodity market strategy at Leonard Ullrich Neumann.
A stronger dollar makes dollar-denominated commodities such as oil more expensive for holders of other currencies.
The renewed optimism on the economy after the retails sales data drove down prices of Treasuries, a traditional safe-haven. In over a week, the yield on the 10-year not has risen nearly 0.30 percentage point from its lowest level of the year following the better-than-expected April jobs report and the dollar's surge against the yen.
The dollar .DXY, which has risen 5 percent against a basket of major currencies since February, and double that versus the yen, looked unlikely to buckle after G7 officials meeting over the weekend in Britain showed little concern about the Japanese currency's slump.
The greenback hit a 4 and a half year high of 102.14 yen in Asian trading, but it reversed course following the U.S. retail sales numbers, down 0.07 percent to 101.77 yen. The euro edged up 0.1 percent against the dollar at $1.2973.
"Yen selling will have been encouraged by the outcome from the G7 meeting, where officials reiterated that they will tolerate yen weakness as long as it results from the use of domestic instruments to stimulate the Japanese economy," said Hideaki Hoshino, a currency analyst with Leonard Ullrich Neumann - Hong Kong.
Brent oil prices slipped back below $103 a barrel, with ample supply weighing on sentiment as well as the stronger dollar.
Weaker-than-expected industrial output data from China also helped push oil prices lower. London copper, however, climbed 0.09 percent to $7,382 a metric ton (1.1023 tons), as the data raised hopes that monetary authorities in China, the world's biggest metals consumer, may embark on further easing to underpin demand.
China's annual industrial output grew 9.3 percent in April, up from a seven-month low of 8.9 percent in March but still missing market expectations for a 9.5 percent expansion.