Oil prices extend the overnight rally further recovering from recent lows. Brent Crude added +3.46%, currently trading at USD58.53 a barrel. On January 13th Crude hit a low at USD45.19 and began to rise on reports on declining rig numbers in the U.S. and capital expenditure cuts. West Texas Intermediate rose by +3.61% currently quoted at USD52.30.

Worldwide supply still exceeds demand in a period of low global economic growth and the OPEC refusing to cut output rates to stabilize prices. Smaller OPEC members want to cut production but the organisation, responsible for 40% of worldwide production focuses on its fight for market share. Rising U.S. stockpiles are contributing to a global glut that drove prices almost 50 percent lower last year. Supply will exceed demand by 2 million barrels a day in the first half of 2015, said Iranian Oil Minister Bijan Namdar Zanganeh.

Gold further declined on Friday with important U.S. employment data on tap. Later in the day U.S. data on Average Hourly Earnings, Nonfarm Payrolls and the Unemployment rate (13:30GMT) followed by FOMC member's Dennis Lockhart's speech (17:45GMT) will be in the focus.

Analysts predict that in January the US economy added 231,000 jobs, while the unemployment rate is projected to remain unchanged at 5.6%. Strong employment rates in the non-agricultural sector are likely to increase speculation about the timing for hiking rates by the Federal Reserve. A future interest rate hike adds pressure on gold. Higher interest rates make gold less attractive as the metal is not yield-bearing. A stronger greenback recently also weighed on the dollar-denominated metal as it makes it more expensive for holders of other currencies.

Yesterday gold declined on mixed U.S. data. Concerns over the developments in Greece were in the focus too after the European Central Bank said it would no longer accept Greek bonds as collateral for lending.

In January gold prices increased by almost 8% as the precious metal was sought after as safe-haven asset.

The precious metal is currently quoted at USD1,263.90, -0,11% a troy ounce. On Thursday the 22^nd of January gold reached a five-month high at USD1,307.40.

BLOOMBERG

Deflation Risk in U.S. Seen Rivaling Euro Area: Chart of the Day

(Bloomberg) -- Deflation would be as much of an issue for the U.S. as it is for the euro region if consumer prices were tracked the same way, according to Albert Edwards, a global strategist at Societe Generale SA.

The CHART OF THE DAY helps illustrate how Edwards drew his conclusion, presented in a report yesterday. He tracked changes in the core U.S. consumer-price index, which excludes food and energy, and the CPI for shelter.

Core inflation in December was 1.6 percent, according to the Labor Department. That's 0.9 percentage point more than the euro region's comparable figure, as compiled by Eurostat. This gap disappears after bringing the U.S. figure into line with Eurostat's definition of housing, Edwards wrote.

"The deflationary fault line on which the U.S. sits is every bit as precarious as that of the euro zone, but is being disguised," the London-based strategist wrote. "The scales will soon lift from the market's eyes."

Source: http://www.bloomberg.com/news/articles/2015-02-06/deflation-risk-in-u-s-seen-rivaling-euro-area-chart-of-the-day

REUTERS
In oil price war, Gulf producers grab market share in Asia

(Reuters) - Saudi Arabia's move to slash the price it charges in Asia for its oil this week to the lowest in more than a decade is the latest aggressive action by Gulf states to defend market share in the world's top oil consuming region.

A price war between producers has raged since Saudi Arabia and its Gulf OPEC allies last November chose to keep their taps open in a bid for market share over price, sending oil prices down more than a third to under $50 a barrel in just two months.

Since then, Gulf producers - including Saudi Arabia and the United Arab Emirates - have steadily increased shipments to Asia, helped by low production costs that allow aggressive discounts, at the expense of West African and Latin American supplies.

Source: http://www.reuters.com/article/2015/02/06/us-asia-gulf-crude-idUSKBN0LA0J720150206

REUTERS

With currency war threatening, speculators focus on Swedish crown

Feb 5 (Reuters) - Speculators are turning their attention to the Swedish crown, expecting it to weaken as Sweden reacts to the threat of a widening currency war in Europe.

Sweden's Riksbank might open fire as early as next week by cutting interest rates to less than zero and setting the stage for quantitative easing. But if those efforts fall short, analysts say, the central bank may need to intervene directly to weaken the crown.

The European Central Bank's 1.1 trillion-euro quantitative easing programme, announced last month, pushed the euro lower against a host of European currencies. In response, the Swiss National Bank abandoned its cap on the value of the franc and Denmark's central bank intervened in record amounts.

Source: http://www.reuters.com/article/2015/02/05/markets-forex-swedish-crown-idUSL6N0VD2TG20150205

(raw materials / closing price /% change)

Light Crude 50.48 +0.39%

Gold 1,262.70 +3.60%