Market Overview for Tuesday 17th April 2012

Currencies The low-yielding U.S. dollar and yen faltered on Tuesday, weighed down by an improving global economic backdrop that spurred investors to seek higher returns in riskier commodity-related currencies. Solid demand at a Spanish bill auction and upbeat German investor sentiment gave investors a green light to leave the relative safety of the dollar and yen. That gave the euro support against the greenback. The Canadian dollar was the best performing currency, jumping more than 1 percent after the Bank of Canada said it may need to start hiking rates due to firmer-than-expected growth and inflation. Sterling, the Australian dollar and New Zealand dollar also posted gains against the greenback, reflecting investors' increased appetite for risk. In mid afternoon New York the euro was 0.1 percent lower at $1.3131 after surpassing Monday's high to hit $1.3172. The session low posted at $1.3088. The euro was up 0.6 percent at 106.20 yen, recovering from Monday's trough where it fell to a level not seen since mid-February.   The Canadian dollar, meanwhile, posted steep gains against the U.S. dollar, with the greenback falling 1 percent to C$0.9900 with the session low at C$0.9861, a one month low.

Energy Brent crude edged up on Tuesday as an upcoming pipeline reversal, aimed at alleviating oversupply in the central United States, bolstered U.S. oil futures at the expense of the higher-priced European benchmark. A well-received Spanish debt auction and a better-than-expected German economic sentiment reading helped support Brent, added lift to U.S. crude and pushed European and Wall Street share prices higher. Brent's premium to its U.S. counterpart narrowed to below $14 a barrel intraday after Monday's news that the Seaway pipeline's crude oil flow will be turned around toward the Gulf Coast as early as mid May. Brent June crude edged up 10 cents to $118.78 a barrel, having swung between $117.98 and $119.34. U.S. May crude futures rose $1.27 to settle at $104.20, the highest close since April 2, after reaching $105.07. The May contract expires on Friday.

Precious metals Gold ended nearly flat o n Tuesday after a Wall Street rally lifted the metal off lows hit earlier in the session, halting a two-day bullion drop brought about by euro-zone debt jitters. Bullion, which has tended recently to follow equities, rose nearly $20 from its morning low after a slew of encouraging U.S. corporate results led by Goldman Sachs Group Inc's fuelled a 200-point jump in the Dow. Spot gold was off 0.1 percent at $1,650.75 an ounce, recovering from the early low at $1,634.44. U.S. gold futures for June delivery settled up $1.40 at $1,651.10 an ounce. Trading volume was weak for a second day at about 30 percent below its 30-day average, preliminary Reuters data showed. Among other precious metals, silver was up 0.8 percent at $31.69 an ounce, spot platinum climbed 0.8 percent at $1,581.49 an ounce and spot palladium rose 1.6 percent to $658.72 an ounce.

Stock indices U.S. stocks scored their biggest gains in a month on Tuesday after Coca-Cola led a round of strong earnings and as concerns about Europe's debt crisis eased as Spanish bond yields fell. Apple Inc shares ended a five-day losing streak with a rally of 5.1 percent, helping the Nasdaq Composite close above 3,000. The stock closed at $609.70 and booked its best day in almost three months after it dropped 8.8 percent in the previous five sessions. The Dow Jones industrial average rose 194.13 points, or 1.50 percent, to close at 13,115.54. The S&P 500 Index gained 21.21 points, or 1.55 percent, to 1,390.78. The Nasdaq Composite climbed 54.42 points, or 1.82 percent, to 3,042.82. In Tuesday's rally, each of the three major indexes booked their largest percentage gains since March 13.