Oil dropped after a government report showed that U.S. crude inventories unexpectedly increased last week.

West Texas Intermediate fell as much as 3.6 percent in New York. Stockpiles climbed 7.27 million barrels to 387.2 million in the week ended Dec. 19, the Energy Information Administration said. The report was projected to show a 2.5 million-barrel decline, according to the median estimate in a Bloomberg survey of nine analysts.

Futures surged yesterday after Commerce Department data showed that the U.S. gross domestic product rose at a 5 percent annual rate from July through September, the most since 2003. Oil is heading for the biggest annual drop since 2008 amid a global glut exacerbated by the highest U.S. output in more than three decades. Prices have dropped about 20 percent since the Organization of Petroleum Exporting Countries decided Nov. 27 to maintain its output ceiling at 30 million barrels a day.

WTI for February delivery fell $1.80 to $55.32 a barrel at 10:31 a.m. on the New York Mercantile Exchange. The contract traded at $55.56 before the release of the report at 10:30 a.m. in Washington.

Brent for February settlement dropped $2.16, or 3.5 percent, to $59.53 a barrel on the London-based ICE Futures Europe exchange.

The price of gold fell after the Labor Department figures reflected the decline in applications for unemployment benefits to a 7-week low for the week of December 20.

The number of Americans who first applied for unemployment benefits fell last week, signaling a further improvement in labor market conditions in the final stretch of the year.

Initial claims for unemployment insurance, the sensor layoffs, reduced by 9000 and reached a seasonally adjusted 280,000 in the week ended December 20 as The Labor Department said on Wednesday. Economists had expected 291,000 new claims.

Moving average for the four weeks of initial claims, which smooths out weekly volatility, fell by 8500 - up to 290,250.

The report also showed that the number of people continuing to receive unemployment benefits rose by 25,000 (up to 2 400 000) for the week ended December 13th. These data are presented with a week delay.

Initial claims fell sharply this year, as companies seek to retain employees and hire new addition.

On the eve gold futures fell due to evidence of a larger-than-expected US GDP growth in the third quarter. Strengthening of the US dollar against a basket of major currencies also affected the precious metal. The dollar index jumped to a new 4-year high on Tuesday.

However, the decline in gold prices has been somewhat limited because of the report, which reported an unexpected drop in orders for durable goods in the US in November, as well as by data demonstrating an unexpected drop in new home sales.

The cost of the February gold futures on the COMEX today fell to 1172.70 dollars per ounce.

U.S. stock-index futures were little changed after a five-day rally in equities that sent the Dow Jones Industrial Average above 18,000 for the first time.

Global markets:

Nikkei 17,854.23 +219.09 +1.24%

Shanghai Composite 2,973.76 -58.85 -1.94%

FTSE 6,609.93 +11.75 +0.18%

CAC 4,295.85 -19.12 -0.44%

Crude oil $55.94 (-2.08%)

Gold $1175.00 (-0.29%)

(company / ticker / price / change, % / volume)

EUR/USD: $1.2300(E351mn), $1.2320(E743mn)

USD/JPY: Y120.00($4.5bn), Y121.00($1.6bn)

USD/CAD: C$1.1490($550mn), C$1.1500($1.8bn)

European indices were little changed in quiet trading after a six-day rally driven by a rebound in energy shares, the FED's "patient" approach to raising interest rates and the U.S. economy expanding more than anticipated.

In today's session the FTSE 100 index added +0.07% quoted at 6,603.05 points extending its gains for a seventh day, whereas France's CAC 40 lost -0.37% in shortened trading quoted at 4,299.12. In Germany bourses are closed today. Yesterday the DAX30 added +0.57% closing at 9,922.11 points. The London Stock Exchange will close at 12:30 GMT; Euronext will close at 13:05 GMT half an hour later.

Brent crude and West Texas Intermediate are trading lower today after yesterday's short term recovery on solid U.S. GDP growth but markets are concerned that the growing U.S. economy won't be sufficient to boost demand enough to support prices.

Oil is set for the biggest annual loss since 2008 amid the highest U.S. output in more than three decades and signs of slowing global demand growth. Prices have almost plunged by 50% in 6 months and have dropped 20 percent since the Organization of Petroleum Exporting Countries decided to maintain output at 30 million barrels a day at their November-meeting in Vienna.

Today investors are looking ahead to the official U.S. Crude Oil Inventories due at 15:30 GMT.

Brent Crude declined by -1.51%, currently trading at USD60.76 a barrel. West Texas Intermediate lost -1.66% currently quoted at USD56.17.

Gold prices recovered after being flat yesterday. Recently the precious metal is under pressure as global stock markets rally, the U.S. dollar strengthens, the U.S. economy is growing faster than expected and the FED is moving closer to raise benchmark interest rates. The U.S. economy grew at a 5 percent annualized rate in the third quarter, the biggest advance in 11 years, data showed yesterday. Falling oil prices make gold less attractive as inflation hedge. Gold is heading for the first annual decline since 2010 as demand for a haven declines.

Investors await U.S. Initial Jobless Claims due 13:30 GMT. Trading volumes are expected to be low this week which could lead to volatile and erratic markets. The precious metal is currently quoted at USD1,179.10, +0,11% a troy ounce.

GOLD currently trading at USD1,179.10

EUR/USD: $1.2300(E351mn), $1.2320(E743mn)

USD/JPY: Y120.00($4.5bn), Y121.00($1.6bn)

USD/CAD: C$1.1490($550mn), C$1.1500($1.8bn)

REUTERS

Ruble weakens on S&P warning of downgrading Russia

(Reuters) - The ruble weakened in early trade on Wednesday, giving up its slight gains seen at opening, after Standard and Poor's rating agency warned it could downgrade Russia's rating to speculative in January.

At 0725 GMT, the rouble was 0.7 percent weaker against the dollar at 54.88 after opening 0.7 percent up. It lost 0.8 percent versus the euro to 67.00.

Late on Tuesday, S&P revised Russia's credit ratings to creditwatch negative from negative, warning the country's monetary flexibility deterioration could lead to putting its sovereign rating into junk territory as soon as mid-January.

Source: http://www.reuters.com/article/2014/12/24/us-russia-crisis-markets-rouble-idUSKBN0K20EG20141224

BLOOMBERG

PBOC Uses Hidden Hand as China Seeks to Stem Slowdown: Economy

The People's Bank of China is turning to a hidden hand as it seeks to stimulate the world's second-largest economy without worsening debt risks.

Contrary to the Federal Reserve's forward guidance, the Bank of England's increased transparency and a Group of 20 Nations vow to clearly communicate policies, China has added liquidity by stealth at least four times in the past four months. One proxy it has been using is China Development Bank Corp., the nation's biggest policy lender.

Source: http://www.bloomberg.com/news/2014-12-23/pboc-turns-to-hidden-hand-as-china-seeks-to-stem-growth-slowdown.html

BLOOMBERG

Libyan Islamists Pushed Back From Attack on Oil Ports

The force defending oil ports in eastern Libya pushed back an onslaught that Islamist militias had started 11 days ago to capture the facilities.

"We pushed them back and it's we who are now attacking them," Ali al-Hasy, a spokesman of the Petroleum Facilities Guard, said by phone from Es Sider, Libya's largest oil port. "The oil ports are safe and they suffered no damage. All the fighting took place well outside the ports."

The Tripoli-based Libyan News Agency yesterday reported the death of Tareq Shnena, the commander of the Islamist force tasked with capturing the eastern oil ports. He succumbed to wounds sustained in the fighting near Es Sider, it said, without saying where it got the information.

Source: http://www.bloomberg.com/news/2014-12-23/libyan-islamists-pushed-back-from-attack-on-eastern-oil-ports.html

European indices trade mixed in a shortened session amid a global end-of-year rally with U.S. indices closing at record highs on better-than-expected U.S. GDP data. The London Stock Exchange will close at 12:30 GMT today; Euronext will close at 13:05 GMT. The DAX 30 is closed for the whole day. In the U.S. Initial Jobless Claims are due at 13:30 GMT.

The FTSE 100 index is currently trading +0.23% quoted at 6,613.05 points, France's CAC 40 lost -0.22%, currently trading at 4,305.42 points in thin holiday trading conditions.

U.S. markets closed higher on Tuesday for a fifth consecutive session on a solid set of U.S. data published yesterday. The DOW JONES added +0.36% closing at 18,024.17 above 18,000 points for the first time ever. The S&P 500 added +0.17% with a final quote of 2,082.17 closing at new records too after the unexpectedly strong report on economic growth.

Hong Kong's Hang Seng was almost flat at +0.07% closing at 23,349.34 points. China's Shanghai Composite closed at 2,973.76 points, a slump of -1.94%.

Japan's Nikkei , after being closed on Tuesday due to a holiday, rose to 17,854.23 points, a plus of +1.24%. It was the fifth straight day of gains. Exporter stocks rose on the weakening yen and solid U.S. data.

Tomorrow financial markets in the U.S., Europe and most of Asia - Japan and mainland China will be open - will be closed for Christmas holiday.

(Time/ Region/ Event/ Period/ Previous/ Forecast/ Actual

08:00 Switzerland KOF Leading Indicator December 98.7 99.2

09:00 Germany Bank Holiday

The greenback traded weaker to mixed against its major peers in Asian trade. Yesterday a set of key economic data was published and supported the currency. Revised data showed that the U.S. economy grew at annualized 5.0% in the third quarter, the most in 11 years. After yesterday's gains the greenback stabilized against the euro and the British pound. Today investors await data on the U.S. Initial Jobless Claims being published at 13:30 GMT to get further indications on when the FED will hike interest rates next year.

The Australian dollar recouped some of its losses. The Conference Board Australia Leading Index for October improved from a previous reading of -0.3% to -0.2% this month.

New Zealand's dollar gained in Asian session for the first time in 3 days recouping some of its recent losses.

The Japanese yen traded higher against the U.S dollar for the first time in 6 days on speculations that recent declines were exaggerated. Today at 23:50 GMT the Monetary Policy Meeting Minutes will be published.

EUR/USD: the euro added small gains against the greenback

USD/JPY: the U.S. dollar traded weaker against the yen

GPB/USD: The British pound lost against the U.S. dollar

The most important news that are expected (GMT0):

(time / country / index / period / previous value / forecast)

13:30 U.S. Initial Jobless Claims December 289 291

15:30 U.S. Crude Oil Inventories December -0.8

23:50 Japan Monetary Policy Meeting Minutes

EUR / USD

Resistance levels (open interest**, contracts)

$1.2291 (439)

$1.2258 (364)

$1.2234 (220)

Price at time of writing this review: $ 1.2176

Support levels (open interest**, contracts):

$1.2149 (3506)

$1.2117 (2897)

$1.2094 (6099)

Comments:

- Overall open interest on the CALL options with the expiration date January, 9 is 55122 contracts, with the maximum number of contracts with strike price $1,2500 (6357);

- Overall open interest on the PUT options with the expiration date January, 9 is 61051 contracts, with the maximum number of contracts with strike price $1,2000 (6948);

- The ratio of PUT/CALL was 1.11 versus 1.09 from the previous trading day according to data from December, 23

GBP/USD

Resistance levels (open interest**, contracts)

$1.5801 (2070)

$1.5702 (2565)

$1.5605 (968)

Price at time of writing this review: $1.5519

Support levels (open interest**, contracts):

$1.5492 (1725)

$1.5395 (1152)

$1.5297 (1169)

Comments:

- Overall open interest on the CALL options with the expiration date January, 9 is 24490 contracts, with the maximum number of contracts with strike price $1,5850 (4015);

- Overall open interest on the PUT options with the expiration date January, 9 is 19907 contracts, with the maximum number of contracts with strike price $1,5450 (1967);

- The ratio of PUT/CALL was 0.81 versus 0.80 from the previous trading day according to data from December, 23

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

(raw materials / closing price /% change)

Light Crude 57.00 -0.21%

Gold 1,177.50 -0.04%

(index / closing price / change items /% change)

S&P/ASX 200 5,380.92 -61.03 -1.12%

SHANGHAI COMP 3,035.01 -92.44 -2.96%

HANG SENG 23,326.73 -81.84 -0.35%

FTSE 100 6,598.18 +21.44 +0.33%

CAC 40 4,314.97 +60.54 +1.42%

Xetra DAX 9,922.11 +56.35 +0.57%

S&P 500 2,082.17 +3.63 +0.17%

NASDAQ Composite 4,765.42 -16.00 -0.33%

Dow Jones 18,024.17 +64.73 +0.36%

(pare/closed(GMT +2)/change, %)

EUR/USD $1,2172 -0,47%

GBP/USD $1,5518 -0,46%

USD/CHF Chf0,9876 +0,41%

USD/JPY Y120,68 +0,52%

EUR/JPY Y146,87 +0,05%

GBP/JPY Y187,28 +0,08%

AUD/USD $0,8102 -0,38%

NZD/USD $0,7707 -0,26%

USD/CAD C$1,1615 -0,09%

(time / country / index / period / previous value / forecast)

08:00 Switzerland KOF Leading Indicator December 98.7 99.2

09:00 Germany Bank Holiday

13:30 U.S. Initial Jobless Claims December 289 291

15:30 U.S. Crude Oil Inventories December -0.8

23:50 Japan Monetary Policy Meeting Minutes