Crude Oil Prices

Crude oil prices continued to drop and reached 27-month lows. This will possibly push gasoline prices below $3 for every gallon.

Yardstick West Texas Intermediate oil for delivery this December decreased 2.4 percent to $80.49 per barrel. This was the lowest level since June of 2012. The plunge came following the revelation of the United States Energy Information Administration that supplies of crude were up to the highest levels since three months ago. The unanticipated increases of stock supply came when demand for after-summer travel also declined.

Wholesale gasoline futures for delivery in the middle part of November plummeted three percent to $2.15 per gallon which is a key indicator for another decrease of retail fuel prices. Price of regular unleaded gasoline is $3.08 per gallon. This is down from $3.34 in September.

Bear market reduction of oil prices is over $25 per barrel from the peak in June. It could propel the national average cost below $3 within next week, according to an analyst for the Oil Price Information Service.

The economy of Russia reeled from the slump of crude oil prices.

The plunge also affected shares of energy-producing stocks as well as the broad markets. Dow Jones industrial cut down a three-day upward movement and finished 153 points to 16,461. Low prices translated to billions in savings for gas consumers.

Asia’s Stocks Fall

asian stock marketStocks in Asian markets waned as the regional index fell from a peak of two weeks after US equities stopped its rally. Oil dropped while the New Zealand currency fell following the slowdown of inflation more than what was predicted.

Measures of manufacturing from Europe and China are both expected today. Market investors will definitely scrutinize economic data for hints regarding the health of the world economy. Equities continue to fluctuate with the United States right on track to finish bond purchases in October in the midst of indications that a slowdown will take place elsewhere. The Asia-Pacific index gained an average 0.9 percent daily in October. It was up from 0.5 percent during the first three quarters of 2014. Meanwhile, oil stocks rose more than the projection last week. It strengthened concerns that supply outgrew demand.

The same Index squandered 0.5 percent in Tokyo trading after striking the highest finish since October 9 yesterday.

The ECB acquired notes from Spain to propel growth and ward off devaluation. It also got notes from Germany and Italy.

Index of STOXX Europe 600 achieved second day growth by 0.7 percent yesterday to the maximum level since the second week of this month.

The NZ Kiwi weakened due to rumors of mild inflation. It gives the Reserve Bank of New Zealand more reason to maintain interest rates. It will review rates again at the end of this month.

GBP/USD Pair Update

Tumbling 13 points, the GBP/USD is trading at 1.6154; meanwhile, the US dollar is gaining momentum far ahead from housing the US data due later in the NA session. Yesterday saw the pound giving back some of its gains. The sterling went up versus the green bucks last Monday; while traders were buying it following their sharp lose last week, setting its near-term direction to be determined by data growth of UK.

The third-quarter domestic of product numbers last Friday provided the currency some support; as this currency has been plagued by increasing suspicion on the reliability of Britain’s economic recovery in facing the degenerating outlook in Europe.

Judging by other surveys already released; the retail sales numbers, maybe supportive of the milder growth outlook that has led investors to expect a first increased in interest rates for the 2nd half of next year.

It is the most significant loss of sterling within eight months versus the euro for last week following back the re-pricing of expectations on rates

ECB to Purchase Italian Bonds

ECBThe ECB acquired covered bonds from Italy under its program of purchasing assets.

Debt from Intesa San Paolo SPA Banking Group in Turin was part of the acquisitions.

The ECB purchased short-dated currency notes from France at BNP Paribas SA as well as Societe Generale SA. It also got securities (Spain) from other lending facilities yesterday.

The ECB got involved in the 2.6 trillion-euro bond market after the central bank president divulged plans to shore up access of private corporations and households to such financing. The ECB also included asset-backed securities in said program. Central Bank President Mario Draghi seeks to increase the bank’s balance sheet by up to 1 trillion euro to hold off deflation in the euro region.

It is widely believed that these bond purchases are designed to utilize quantitative easing in the EU and augment the ECB’s own balance sheet. These purchases are not complicated compared to acquiring government bonds.

The governing council of the European Central Bank is not thinking about purchasing corporate bonds, according to anonymous officials of the institution. The spokesperson of the ECB did not make any reaction to this claim.

The standard profit on euro-denominated covered bonds went down two basis points which was 0.54 percent. It approached a record low of 0.49 percent which was set last October 15.