Europe Falls On US Rate Prospect

Ivaylo
20 Jun, 2006
Frankfurt

Feds officials reaffirmed their tough position on inflation, saying that US core inflation, excluding volatile food and energy costs, has moved up to, or beyond, the upper end of the range. Concerns over a slowdown in US demand with interest rates now seen rising by possibly two quarter point increases struck metals and decreased oil prices below $69 a barrel.

[R]6:30AM European stocks drop slightly in mid morning trade.[/R]
European shares fell slightly in mid morning trade. The FTSE 100 in London lost 0.3% at 5,610.6, the Xetra Dax in Frankfurt was down 0.3% to 5,422.66 and the CAC-40 in Paris was off 0.3% to 4,715.06. On the corporate front, Deutsche Börse on Monday launched a new effort to take Euronext away from a deal with the NYSE Group, making key concessions on operations that would give its Paris-based rival more power than the Germans had been prepared to give away. The French government delayed till September the full privatisation of Gaz de France. Its plans to merge Gaz de France and Suez to create the world’s second-largest energy group overcame at least one political hurdle on Monday as the French government put a timetable on crucial legislation to privatise the gas group. Veolia Environnement advanced 2.4% as the French utility, which abandoned its plan for a merger with French construction and concessions grup Vinci, was upgraded to “neutral” by UBS. The Swiss broker reduced its target price, but noted the shares had fallen 15% during the past week and were now fairly valued.

Light, sweet crude oil for July delivery was unchanged at $68.98 a barrel. July Brent crude futures on the ICE Futures exchange shed 5 cents to $68.06 a barrel. Gold edged down at $569.0 an ounce on Tuesday, down $3.0 an ounce from Monday''s close of $572.0. The U.S. dollar was trading at 115.05 yen, down 0.32 yen from late Monday in New York. The euro advanced to US$1.2592, from US$1.2572. The British pound chnaged little was buying $1.84.

[R]5:00AM Gold futures fall on dollar strength.[/R]
Gold for August delivery settled down $9.30 at $572.40 an ounce on NYME. Silver ended down 16 cents to $9.97 an ounce, while platinum shed $6.80 at $1,137.8 an ounce and palladium slumped $10.95 to $295.10 an ounce. Copper also declined 13.90 cents to $3.1525 a pound.

Crude oil for July delivery also recorded losses early Monday and was last down 93 cents at $68.95 a barrel. Heating oil futures fell slightly to $1.8930 per gallon, while natural gas futures shed 17 cents to $6.720 per 1,000 cubic feet. Gasoline futures slid slightly to $1.9880 a gallon.