commodities

The recent weeks have been some of the most volatile ones as the fear of the European financial crisis ripples through the economies of the world, resulting in a massive flight to safety to the USD and funds being drawn out of troubled countries, pushing up the USD and triggering bank runs. The rise in the USD depressed commodity prices, including that of gold, though as at the time of writing this, gold just shot up about US$50 (3%) on news of US jobs data being weaker than expected, thus sparking speculation of possible monetary easing to come. So it seems gold is seen as a safe haven again relative to the USD.

Oil hit aboove US$94 per barrel today. For some time, it hovered around US$88 and refused to go down. USD/CAD went below parity (didn’t hold though) for the first time since Sep 21. SOR rose from under 0.2% to almost 0.35% in a little over a week, even as USD/SGD fell from 1.3 to 1.26 in just over 2 weeks. As mentioned in a previous posting, SOR and SIBOR were expected to be going up. SOR is probably tracking the climb in LIBOR, which increased quite significantly in the past 3 months. Treasury yields have been on an uptrend as well.