Cool Imoge

Stocks tried to rally for a second consecutive week
Stocks tried to rally for a second consecutive week, subsequently giving up those small gains, to end unchanged (though the Nikkei and Shanghai Composite lost 1.85%). Rather than the usual ‘risk on/risk off’ knee-jerk reaction investors seem to have become a little more savvy; they continue buying top-quality bonds, so that US benchmark two-year TNote set a record low yield at 0.58%, UK five-year Gilts matched 2009’s record low 1.985%, while ten-year BBB+ rated Mexican ones set a new record low at 6.64% as did Brazil’s BBB- at 4.34%. Peripheral Eurozone Treasuries remain under pressure trading at or close to record spreads with the ECB’s reluctant quantative easing in place. While buying yen, taking it to 86.50 per USD, they sold dollars against most currencies taking the Euro to $1.3008 and Cable $1.5473, an increase of 2.5% in five days leaving consensus opinion (for a stronger greenback) head-scratching calling this a ‘technical short-covering rally’; previous ‘darlings’ are lagging well behind. CBOT Wheat rallied strongly again for a third consecutive week, caused by the heat wave in Europe and parts of North America, reaching 598.5 cents per bushel and its most expensive in a year, dragging Corn up to 397 cents.


Political and Economic Developments

The Bank of Thailand raised it key rate by 25 basis points from a record low 1.25%. Moody’s downgraded Portugal’s sovereign rating to A1. UK inflation remains stubbornly high, CPI +3.2% Y/Y to June and RPI +5.00% (the higher figure which no longer will be used for index-linking payouts) though no rate hikes are currently in sight. US CPI far more benign, +1.1% Y/Y to June, Core +0.9% almost as low as 1961’s record low +0.7%. Minutes from the Fed’s FOMC meeting saw 2010’s GDP forecast trimmed to 3.0%-3.5% saying it might need to ‘consider whether further policy stimulus might become appropriate’. Sentiment surveys from New York, Philadelphia and Michigan were rather downbeat this month and nationwide Retail Sales dropped 0.5% after May’s 1.1% decline.

HEIDI KLUM's raunchy new TV commercial for the Guitar Hero video game left her with a stiff neck and carpet burns on her knees.

In the ad, the German model sets male fans' pulses racing by stripping to her underwear and playing air guitar to Bob Seger song Old Time Rock and Roll. But while it may look sexy, the commercial it was far from fun to shoot. Klum says, "I head banged for five hours straight. There was a lot of jumping and running around. I jumped off the table onto my knees and took a layer of skin off."