Argy Dockworker Strike Temporarily Halts Grain Loadings

March 2, 2012 12:21 AM

What Traders are Talking About:

* Argentine dockworker strike seen as no big deal. Argentine dockworkers went on temporary strike Thursday, halting the loading of two grain ships at the main port at Rosario. Dockworkers are seeking better working conditions and higher pay. A union leader says dockworkers are planning another strike March 7 if their demands are not met by that time.

The long and short of it: Dockworker strikes are common in Argentina (and Brazil) ahead of the main grain shipping season and typically last just a few days.

* Saudi denies pipeline sabotage. Saudi Arabia's government is denying there was any sabotage to one of its oil pipelines after Iranian television reported an explosion on the pipeline Thursday. The initial reports caused front-month crude oil futures to spike above $110, but oil futures are pulling back this morning amid the Saudi denial.

The long and short of it: It's likely going to take a legitimate geo-political uprising to push front-month crude oil futures above $110 for a sustained period. Otherwise, that area is a near-term ceiling, with spikes of it seen as a selling opportunity.

* EU leaders sign fiscal pact. Leaders of 25 of the European Union's (EU) 27 member countries today signed a fiscal discipline treaty. Britain and the Czech Republic opted out. Ratification by parliaments in EU countries signing fiscal treat is the next step. EU leaders also released statements on a variety of issues facing the bloc. German Chancellor Angela Merkel on the signing of the fiscal pact: "For the first time we are committing ourselves to put into place what is in the stability and growth pact. We are committing ourselves to the extent that we are allowing the European Court of Justice to verify whether the debt brakes are applied correctly. I think it's a strong signal that we have learned from the crisis and understood the signals and that we are banking on the future of a politically united Europe." On the European Stability Mechanism (ESM) permanent bailout fund and the European Financial Stability Facility (EFSF) temporary fund: "We reaffirmed our pledge to accelerate the payment of capital for the ESM, beginning with the payment of two tranches in (2012), and we will revaluate the ceiling for the ESM and EFSF during the month of March, and that will be at the level of the Eurogroup finance ministers." On Greece: "We don't have a plan B because we have a chosen a way to deal with the crisis and now Greece has a very good opportunity to do what they have to do. They have the austerity measures and now confidence will follow."

The long and short of it: The EU fiscal pact is similar to that earlier signed by the 17-member euro-zone. The big news will be if the pact actually works and leads to more fiscal responsibility in Europe.


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