Finance World

By: Head of Commodity Strategy at Saxo Bank Ole Sloth Hansen

 

February may have marked a first rise in eight months for commodities, but it was back to type in the first week of March with weakness across most sectors. 

This was driven by the adverse impact of the dollar rising to a fresh 11-year high against the euro while China downgraded its growth target for 2015 to just 7%, the lowest in more than decade.  

 

The resumption of dollar buying occurred as the market prepared for the beginning of quantitative easing from the European Central Bank. 

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China returned from their week long new year celebrations while the dollar resumed its ascent on a combination of stronger US data and the soon-to-begin period of quantitative easing in Europe.

The Bloomberg Commodity Index traded sideways as stimulus speculation supported industrial metals, most noticeably copper, but against this we saw losses in energy (Natural gas and WTI crude oil) and softs (coffee and sugar).

The cost of crude oil on either side of the Atlantic continues to diverge with the spread between WTI crude and Brent crude reaching a 13-month high at around $12/barrel.

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A premium added to the price of properties overlooking Dubai Fountain has paid for the popular Downtown Dubai attraction 10 times over, according to the chairman of Emaar Properties.

In an interview with Nigerian press, Mohamed Alabbar revealed that the $180 million cost of Dubai Fountain had been recouped by the developer 10-fold through the sale of nearby homes.

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