U.S. Navy Deploys Third Aircraft Carrier To Persian Gulf MANAMA (Reuters) - The U.S. Navy said on Tuesday it had sent a third aircraft carrier to its Fifth Fleet area of operations, which includes waters close to Iran, whose row with the West over its nuclear plans has stoked regional tensions.

Quick Overview

• Standard and Poor's said that $12 billion of securities are on negative watch because of the poor performance of subprime loans.
  

• The Federal Reserve Board should lose some if its consumer protection powers if it does not craft tougher rules on mortgage lending, a senior House Democrat said.
  

• U.S. wholesale sales rose 1.3% MoM
  U.S. inventories rose 0.3% MoM
  

• Canada housing starts in were at an annual rate of 225,500 units in June, down 4% MoM.
  The Bank of Canada raised interest rates from 4.25% to 4.50%.
  

• The Vietnam Coffee and Cocoa Association expects Robusta coffee crop to total 15 million (60-kg) bags in 2007-2008, down 3% YoY.
  
  

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• Japan's machinery orders were up 5.9% MoM.
  

• U.K.'s producer prices were up 0.2% MoM and up 2.4% YoY.

• Ethanol Poised to Reverse Plunge as Demand Lifts

In London’s Financial World, Carbon Trading Is the New Big Thing
“Carbon will be the world’s biggest commodity market, and it could become the world’s biggest market over all,” said Mr. Redshaw, the head of environmental markets at Barclays Capital.

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• U.S. Unemployment rate was unchanged in June at 4.5%.
  

• Canada’s unemployment rate remained at 6.1% in June
  

• Industrial production in the U.K. was up 0.6% in May.
  
  

• July 6 (Bloomberg) -- Sugar, corn, wheat and cotton may be among
  the best commodity investments in the next one to three years driven by biofuel demand and rising incomes in China and India, according to UBS AG, the world's largest money manager.
  
  

• Newmont Mining rose by more than 5% after that company announced it was eliminating its hedging program.
  
  

• A private forecaster pegs the 2007/08 winter wheat crop at 1.583 billion bushels, versus the June 11th USDA forecast of 1.61 billion bushels. The hard red wheat production is forecast at 989 million versus the USDA figure of 1.03 billion.
  
  

Plague of bioweapons accidents afflicts the US There are now 20,000 people at 400 sites around the US working with putative bioweapons germs, says Hammond, 10 times more than before the terrorist attacks of 9/11. Some scientists have warned for years that more people handling dangerous germs are a recipe for accidents.

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• The Institute of Supply Management's index of U.S. services rose from 59.7 to 60.7
  

• The Bank of England increased its interest rate from 5.50% to 5.75%,
  

• Retail sales volume was up 0.4% in the Euro zone.
  

• The U.S. Department of Energy said that:
• Supplies of crude oil rose 3.1 million barrels to 354.0 million barrels.
  Supplies of gasoline rose 1.8 million barrels
  Supplies of heating oil rose 300,000 barrels.
  Gasoline demand was up 1.2% YoY
  Distillated demand was up 3.4% YoY.
  

Updates resume July 5

Quick Overview

• U.S. Personal incomes rose 0.4% in May and consumer spending was up 0.5%.
  

• U.S. Construction spending rose 0.9% MoM, but fell 2.2% YoY.
  

• The National Association of Purchasing Managers' Chicago index fell from 61.7 to 60.2 in June.
  

• The University of Michigan's consumer sentiment index fell from 88.3 to 85.3 in June.
  

• Canada’s GDP rose 2.1% YoY.
  

• U.K.s GDP rose 3.0% YoY.
  

• YoY Japans consumer prices were unchanged.
  

• New Zealand's GDP rose 2.5% YoY
  

• The USDA estimate for planted acres:
  Corn at 92.9 million acres, up 19% YoY-- the most since 1944.
  Soybeans at 64.1 million acres, down 15% YoY -- the lowest since 1995.
  Wheat at 60.5 million acres, up 6% YoY.
  Cotton at 11.1 million acres, down 28% YoY -- the lowest since 1989.
  

• The USDA estimates June 1, 2007, stocks at:
  Corn totaled 3.53 billion bushels, down 19% YoY.
  Soybeans totaled 1.09 billion bushels, up 10% YoY.
  Wheat totaled 456 million bushels, down 20% YoY.
  

• The International Grain Council has lowered its outlook for world wheat harvests due to droughts in Russia and the Ukraine. The current estimate is 614 million tonnes against the previous guess of 620.
  

• The USDA estimates 62.75 million head of hogs and pigs in inventory on June 1st, up 1.7% YoY

Quick Overview

• The Federal Reserve kept the federal fund rate unchanged at 5.25%, as expected.
  

• U.S. GDP was up 0.7% in the first quarter of 2007.
  

• U.S. personal consumption expenditures rose 2.3%.
  

• U.S. bank regulators have agreed on new standards for subprime mortgage loans .. to be announced tomorrow.
  

• Germany's unemployment rate improved from 9.2% to 9.1% in June,
  

• U.K. house prices rose 1.1% in June.
  

• Japan's core consumer price index for May fell 0.1 % YoY.
  

• Japan's jobless rate for May unchanged at 3.8% MoM.

Clinton Surpasses Obama in Site Traffic Race, Paul Rockets to First
Hillary Clinton overtook Barack Obama in May, John Edwards and Rudy Giuliani held steady and Ron Paul rocketed from fifth place to first. That's according to Hitwise data showing the ebb and flow of traffic to the official sites of the Democratic and Republican presidential primary candidates.

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• U.S. Durable goods orders were down 2.8% in May, weaker than expected.
  

• YoY Retail sales in Japan were up 0.1% in May.

• Japan's industrial production unexpectedly fell 0.4% in May, raising concern that the world's second-largest economy may stall.
  

• The U.S. DOE said:
  Supplies of crude oil rose 1.6 million barrels last week to 350.9 million barrels.
  Supplies of gasoline fell 700,000 barrels
  Supplies of heating oil supplies fell 200,000 barrels.
  Gasoline demand was up 1.4% YoY
  Distillate demand was up 3.5% YoY.
  
  
  

China Industrial-Company Profits Climb 42 Percent Soaring profits help to fund the construction of factories and mines, raising the risk of overcapacity. Premier Wen Jiabao on June 14 highlighted the risk of a rebound in fixed-asset investment and signaled the central bank may raise interest rates or curb bank lending.

Quick Overview

• The U.S. Census Bureau said new home sales were down 1.6% from April's pace, and down 21% YoY. This is the fourth drop in the past five months, providing further evidence of a continued slump in housing.
  

• U.S. Index of consumer confidence fell from 108.5 to 103.9 in June -- more than expected.
  

• Shares of COSCO, Asia's largest container line, as much as doubled Tuesday on their Shanghai trading debut.
  
  
  

• Stats Canada said Canada's farmers planted:
  21.7 million acres of wheat, down 10.5% from a year ago.
  14.6 million acres of canola, up 17% from a year ago.
  3.5 million acres of corn, up 29% from a year ago.
  2.9 million acres of soybeans, down 3% from a year ago.
  

Bee Disease May Destroy Hives Worldwide, Ruin Crops Bloomberg) -- A malady that has decimated millions of honeybees and is threatening $14.6 billion of U.S. crops is also harming hives in Asia, Europe and South America, said a scientist scheduled to testify before Congress tomorrow.

Quick Overview

• Growing concerns about the subprime mortgage market dragged down shares of Bear Stearns and Goldman Sachs
  
  
  

• The National Association of Realtors said that U.S. existing home sales were down 0.3% MoM -- better than expected.
  
  

• Peru said their silver production was down 11.4% YoY, and gold production was down 28% YoY. Peru is the worlds largest silver producer.
  
  
  

Quick Overview

• The Ifo Institute's index of business confidence in Germany fell from 108.6 to 107.0 in June.
  

• The USDA said that there were 11.272 million head of cattle on feed as of June 1st, up 0.8% YoY.
  

• There were 57.2 million pounds of frozen bellies in storage, down 3% YoY.
  

• Frozen pork in storage totaled 491 million pounds, up 3% YoY.
  

• There were 851 million pounds of frozen orange juice in U.S. cold storage, down 17% YoY.
  

``The problem is not what we see happening, but what we don't see,''
said Joseph Mason, associate professor of finance at Drexel University in Philadelphia and co-author of an 84-page study this year on the CDO market. ``We don't know the price of these assets. We don't know which banks are exposed to this sector. These conditions are the classic conditions for financial crises across history.''
The bailout of the fund would be the largest since Long- Term Capital Management LP, which received $3.625 billion from 14 lenders in 1998.

Yen Reaches 4 1/2-Year Low Against Dollar; Carry Trades to Rise
Japanese finance companies will market more than 1.5 trillion yen ($12.1 billion) of foreign-currency investment trusts before the end of June, according to data compiled by Bloomberg. The funds are aimed at individual investors who want to seek out assets with higher yields.

``It's an industry issue,'' What are their true prices?
Investors from hedge funds to pension funds and foreign banks have snapped up CDOs, securities backed by pools of assets, as a new way to invest in debt, making it the fastest-growing market and pushing the amount outstanding to more than $1 trillion.

Quick Overview

• U.S. Leading indicators rose 0.3% in May
  

• Retail sales in Canada were up 0.4% MoM and up 4.7 YoY.
  

• The DoE said that underground supplies of natural gas were up 89 billion cubic feet to 2.344 trillion cubic feet.
  

Sakakibara Says Bank of Japan Must Lift Rates to Strengthen Yen
``Japan's interest rates are absurdly low and creating a carry trade bubble, and this is quite dangerous,'' said Sakakibara

Bear Stearns Fund Collapse Sends Shock Through CDOs A sale would give banks, brokerages and investors the one thing they want to avoid: a real price on the bonds in the fund that could serve as a benchmark. The securities are known as collateralized debt obligations, which exceed $1 trillion and comprise the fastest-growing part of the bond market.

Quick Overview

• Leading indicators in Australia rose 6.7% YoY.
  

• Japan's merchandise trade surplus rose 15.1% YoY.
  
  

• The U.S. DoE said that:
  Supplies of crude oil rose 6.9 million barrels to 349.3 million barrels
  Supplies of gasoline rose 1.8 million barrels
  Supplies of heating oil fell 400,000 barrels.
  Gasoline demand was up 1.5% YoY
  Distillate demand was up 2.8% YoY.

Excluding Ron Paul After our call, I got to thinking about this Failor character: what kind of person running a "tax relief" organization would exclude the presidential candidate with – and this is no exaggeration – possibly the best record on taxation in all of American history, someone who favors the abolition of the income tax and the drastic reduction or elimination of nearly all other federal taxes? Should this be the Iowans For a Little Tax Relief, But Not Too Much?

Quick Overview

• U.S. Housing starts were down 2.1% MoM and down 26% YoY. Building permits were up 3% MoM.
  

• China sold $5.8 billion of U.S. T-bonds in April, the biggest monthly sale in seven years.
  

• Canadian CPI rose 2.2% YoY
  

• Investor confidence in Germany dropped from 24 to 20.3 in June, more than expected.
  

• Australia’s wheat crop will total 22.5 tons, down from a previous estimate of 25 tons due to dry conditions.
  

• Liaoning province in northeast China is having its worst drought in 30 years. Some 7% of China's corn and 5% of its wheat come there.
  

Quick Overview

• YoY Swiss industrial production rose 7.3%.
  

• Standard and Poor's raised credit ratings for three large Japanese banks, citing improved balance sheets and an improved economy.
  

• The National Association of Homebuilders sentiment index fell from 30 to 28 in June. The lowest level in more than 16 years.
  

• Brazil, the world's biggest producer of the sweetener and sugarcane-based ethanol, will increase the required blend of the biofuel in domestic gasoline to 25 percent from 23 percent starting July 1.
  
  

• Shanghai is set to overtake Singapore as the world's busiest port in 2008.

Housewives Outmaneuver UBS, Deutsche Bank in Yen Carry Trading
In Japan, individuals have opened 600,000 so-called margin trading accounts at brokerages that lend money for currency bets, 80 percent more than a year ago, according to Yano Research.

• U.S.. Consumer prices rose 0.7% in May and 2.7% YoY.
  

• U.S. Industrial production was unchanged in May.
  

• U.S. Capacity utilization was 81.3%, down from 81.5% MoM.
  

• The New York Federal Reserve's index of manufacturing rose from 8.0 to 25.8 in June, the highest level in a year.
  

• The University of Michigan’s consumer sentiment index dropped from 88.3 to 83.7 in June.
  

• The International Cocoa Organization expects world production to fall short of consumption by 145,000 tons.
  

• The yen dropped to a fifteen year low against the pound and a fresh four-and-a-half-year against the dollar after the Bank of Japan left interest rates on hold at its monthly policy meeting.
  
  
• Concerns about dry weather in the eastern and southeastern U.S. continue to support grain prices. Some weather forecasts increased the moisture in next week's outlook, but traders weren't biting. They've been bitten too many times when similar forecasts dried up.

Quick Overview

• U.S. producer prices rose 0.9% in May and up 4.1% YoY.
  

• U.K. Retail sales rose 0.4% in May and up 3.9% YoY.
  

• Consumer prices in the Euro area rose 1.9%
  

• Retail sales in New Zealand were down 1.2%.
  
  

• China's May industrial production at 18.1% YoY, up from 17.4% in April.
  
  

• The Swiss want to sell 250 tons of gold over the next couple of years.