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Market update, Thursday, 21st November 2013

By Musabbir Mazhar

In Geneva, no positive deal went through about disagreement over Iran’s Nuclear Program. Foreign Minister Javad Zariff and EU Foreign Policy Chief Catherine Ashton were unable to find an overall agreement on Thursday afternoon. Iran holds the fourth largest oil reserves in the world and intends to have trade restrictions lifted. Negotiators from US, Europe, Germany, China, France, Russian and the UK want Iran to have limited to no Uranium Enrichment facility that might be used to make Nuclear weapons. If there are no positive deals reached US will likely enforce additional sanctions on trade of oil. US and Israel can even make military attacks in order to prevent Iran from developing a nuclear weapon.

WTI Crude traded at 95.23 /bbl (for January delivery) which is a three-week high as Unemployment benefits in the US declined, which signals a recovery. The jobless claims fell to 323,000 by 21,000 jobs last week. This is important since US is the largest consumer of oil – about 21% of world oil demand. Brent for January settlement was down at 109/90 /bbl. It was trading at a premium of $14.67 to WTI.

Also as jobless claims fell US treasury yield reached peak in two months as there was selloff. The 10 year yield fell 0.0001 or 1 basis points to 2.78%, at a price of 99 22/32 (Note due November 2023, coupon 2.75%).

Fed Chairman Bernanke said that the benchmark interest rate will likely stay low after the Fed tapers the bond-purchasing program.

The S&P/TSX composite index ended the day higher at13475.33 (+0.34%).

The DJIA climbed 109.17 points to finish at 16,009.99. The Nasdaq was up 47.885 points to 3,969.15 The S&P 500 closed 14.48 points higher at 1,795.85.

Gold at the spot rate is at 1243.28 (+.03%). This is the lowest price in more than 4 months.

The Eurozone Composite PMI (by Markit Economics) fell from 51.9 in October to 51.5. This is a decline in growth for the 2nd month. A score above 50 indicates growth.

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