Oil Tumble Sends U.S. Trade Gap to Four-Year Low: Economy

A plunge in oil imports pushed the trade deficit in November to the lowest level in four years, showing the U.S. economy is becoming more energy independent.

The gap narrowed 12.9 percent to $34.3 billion, smaller than projected by any economist surveyed by Bloomberg and the least since October 2009, figures from the Commerce Department showed today in Washington. Petroleum imports were the weakest in three years as advances in domestic extraction put the U.S. on track to become the world’s largest oil producer by 2015.

The fuel-driven drop in purchases from abroad overshadowed record demand for foreign autos, parts and capital goods that indicate spending by American consumers and businesses is strengthening. Exports also were the strongest ever as improving economies in Europe and Asia benefit companies like Boeing Co. (BA), contributing to a pickup in manufacturing.

(Source: Bloomberg)                   

Central Banks Split on Stimulus in 2014 as Fed Tapers

The united stimulus front of central banks is starting to splinter as 2014 dawns.

The Federal Reserve -- soon to be led by Janet Yellen, confirmed today by the Senate as the next chairman -- begins pulling back on its quantitative easing amid stronger U.S. growth, and the Bank of England is trying to cool its housing market. The European Central Bank and Bank of Japan lean toward more monetary action to fight weak inflation. The ECB and BOE both hold policy meetings this week.

The erosion of the mostly synchronized stimulus that supported the world economy for the past six years has investors anticipating a stronger U.S. dollar and weaker Treasuries. That’s not to say the era of easy money is over, as the need to guard against deflation -- as well as the fear of unsettling markets or upending economic expansion -- leaves the Fed and its counterparts pledging to keep interest rates at record lows.

Thiel predicted last month that investors will see the Fed’s decision to taper its $85 billion in monthly bond purchases as the beginning of the end of central-bank support and will push the U.S. 10-year note toward 3.25 percent by the end of this year from 3 percent at 5 p.m. in New York Jan. 3, outpacing the projected rise in Germany’s 10-year bund yield.

(Source: Bloomberg)

Euro Falls Most in 2 Months as Rally Overheats; Yen Snaps Losses

Berita Jalatama : The euro fell the most against the dollar in two months amid speculation its six-month rally was due for a pause even as data signaled improvements in the European economy.

The yen snapped nine weeks of losses as Japanese Prime Minister Shinzo Abe said Jan. 1 the nation was halfway to escaping deflation. New Zealand’s dollar advanced against all 16 major counterparts on bets for an interest-rate increase. Federal Reserve Chairman Ben S. Bernanke said the U.S. is poised for faster growth before a Jan. 10 report forecast to show 195,000 jobs were added in December.

The euro dropped 1.2 percent to $1.3589 this week in New York after reaching $1.3893 on Dec. 27, the strongest level since October 2011. The greenback fell 0.3 percent to 104.86 yen after rising to 105.44 on Jan. 2, the weakest level since October 2008. Japan’s currency climbed 0.6 percent to 142.48 per euro.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, rose 0.3 percent to 1,026.23, the third-straight weekly rally.

(Source: bloomberg)