Capital Markets, Financial

BGC Partners eyes new platform to trade US Treasuries

BGC Partners plans to launch a new platform to trade US Treasuries early next year, in a bid to return to a market in the middle of evolution, according to people familiar with the plans.  The company, spun out of Howard Lutnick’s Cantor Fitzgerald in 2004, sold eSpeed, the second-largest interdealer platform for trading Treasuries, […]

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Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Categorized | Currencies

Gold miners under pressure

Posted on October 4, 2016

Gold miners were poised for their biggest one-day drop in more than a month on Tuesday, as more hawkish expectations on US rate rises saw the dollar strengthen and prices for the yellow metal weaken.

The precious metal fell more than 2 per cent to $1,282.07 a troy ounce as upbeat US economic data and hawkish remarks from Cleveland Fed president Loretta Mester — a member of the monetary policy setting Federal Open Market Committee — pushed the greenback higher.

    The dollar index, a gauge of the US dollar against a basket of peers, rose 0.8 per cent. As gold is dollar-denominated, strength in the currency makes it more expensive for foreign buyers.

    Moreover, investors again began to eye the prospects of a rate rise by the Federal Reserve this year, which would make gold less attractive because it offers no yield. “Fed commentary has become more hawkish over the past few days, and combined with better than expected manufacturing data that has helped push December rate hike odds above 60 per cent,” said Dennis DeBusschere, strategist at Evercore ISI, referring to data released on Monday that showed the factory sector revved up more than forecast last month.

    Federal funds futures imply a 62.7 per cent chance of a rate rise in December.

    “This is very much a technical move (for gold) where we’ve breached the 100-day moving average,” said Bart Melek, strategist at TD Securities, pointing to a few other factors in play. He added: “There has also been a ramp up in short-term and long-term yields on the back of the polls that show [Republican presidential candidate] Donald Trump is further away from the presidency.”

    The NYSE Arca gold miners index, consisting of 39 global miners, was down 5 per cent.

    Barrick Gold shares fell nearly 8 per cent to $16.03, Kinross Gold shares tumbled more than 10 per cent to $3.69, Goldcorp shares fell 7 per cent to $14.65 while Newmont Mining shares slid 7 per cent to $35.40.

    Meanwhile, the S&P 500 US utilities sector fell 2 per cent. AES Corp was the biggest decliner, falling 3.9 per cent to $11.99. Shares in American Water Works fell 2 per cent to $72.51, NiSource shares fell more than 3 per cent to $22.87.

    Utilities declined for the eighth consecutive day in what would be the longest losing streak in a month and a half. The fall has coincided with several upbeat economic reports that have left some strategists feeling more confident the Federal Reserve will raise its benchmark interest rate in December.

    But the sector, which benefits in a low interest rate environment and had rallied in the first six months of 2016 driven by yield-hungry investors seeking its fat dividends, has given up those gains as investors eye the upcoming Fed meetings.

    The sell-off in shares of gold miners and utilities arrived as US stocks fluctuated between gains and losses. By midday, the S&P 500 was 0.2 per cent lower at 2,157.43, the Dow Jones Industrial Average slid 0.1 per cent to 18,228.40. The Nasdaq Composite was flat at 5,303.75.