Europe Traces U.S. Sell-Off

Ivaylo
24 May, 2006
Frankfurt

Fears of the U.S. Federal Reserve

[R]6:30AM European bourses off to a lower start on Wednesday.[/R]
European stocks started sharply lower on Wednesday. It was a day of merger and acquisition steps with some deals started to unravel. Deutsche Börse must hold a meeting in the wake of Euronext refusal to its latest offer. The New York’s bid is lower than that of Deutsche Börse but Euronext has its eyes on the bigger board as it seems to present better opportunities. Borsa Italiana will also start talks with Euronext of a possible deal. In other news, OMV soared 8.9% in early trade after the Austrian oil company its merger with Verbund was stopped by the government because of political resistance from the country provinces. ThyssenKrupp, the German engineering conglomerate stated its willingness to buy Japanese elevator company Hitachi, offering almost double of its global market share.

Oil prices lost momentum on Wednesday ahead of weekly U.S. inventory data and an international meeting on Iran''s nuclear program. Crude oil was trading down 48 cents at $71.28 a barrel and London July Brent crude oil shed 42 cents to $70.58. Gold traded lower in a narrow band on Wednesday, ttracing movements in the dollar and following closely oil prices. Spot gold was quoted at $668.20/669.00 an ounce by 0952 GMT. The dollar gained against the euro.The euro bought $1.2792 in early European trading, down from $1.2861 in New York late Tuesday. The British pound slipped to $1.8778 from $1.8843. Against the Japanese currency, the dollar advanced to 112.28 yen from 111.32 yen.

[R]5:00AM Gold and silver on the rise again.[/R]
June gold closed $16 higher at $673.70 a troy ounce. July silver soared 74 cents to $13.17 an ounce. July platinum jumped $36.90 to $1,321.50 an ounce, while June palladium advanced $21.60 to $363.35 an ounce. Benchmark July copper advanced to $3.89 per pound then later closed at $3.88 per pound, 42.4 cents higher on the day.

July crude oil rose $1.80 to $71.76 a barrel after dropping as low as $69.85 a barrel. June gasoline finished 5.06 cents up at $2.1080 a gallon. On NYME, July Arabica coffee futures closed 1.8 cents up at $1.01 a pound. July futures of raw sugar in foreign ports closed up 0.23 cent at 16.62 cents a pound.