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Greek decision weighs heavily on commodities markets despite positive US employment data

Date: Mon, 6 Feb 2012 | Author: Paul Sanderson

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Today the Greek Government has to let the European Union know whether it will accept the terms of a €130 billion bailout.

Tense negotiations over the weekend between Greek politicians have, at the time of writing, not resulted in an outcome.

However, if this hurdle is overcome, then it could add to the more generally positive economic outlook for the world economy that is taking hold.

On Friday, US employment data was vastly better than expected. Non-farm payrolls in the US increased by 243,000 – much greater than the 150,000 increase expected by analysts.

China is also gearing back up after its New Year break and there is an expectation that its Government will continue to loosen its fiscal policy to encourage growth.

The official price for copper on Friday was $8,341 (£5,272) with the dollar continuing to strengthen up to 1.5821 against the pound. However, later trading after the official price was published, saw copper reach $8,598 (£5,435). This was starting to fall a little this morning, as traders awaited the news from Greece. But overall sentiment is positive for copper with its two main buyers – the US and China – both looking stronger economically.

After four days of gains, Brent Crude oil was down 43 cents this morning to $114.15 a barrel, although it increased by 2.8 per cent last week close to its three-month high.

The US news also boosted the price of cotton and the overall S&P GSCI index of 24 commodities.

Cotton broke its downward trend and increased to $88.92 per pound on Friday compared to a recent low of  $85.86 seen on Wednesday. While the S&P GSCI index broke 5,000 to 5037.78 compared to 4,971.87 on Thursday.  

Category: Recycling
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