Oil shifts focus from U.S. budget to normal value drivers

In the emerging country world, China seems to be finally turning the corner and starting to show signs of growing at a faster pace than it had for 2012. Over the weekend the latest energy sensitive Purchasing Managers Index came in at 50.6 for December... which is now in the expansion mode once again. The macroeconomic data out of China over the last month or so has shown a steady improvement suggesting that the main economic and oil demand growth engine of the world may be ready to once again lead the global economy out of its malaise.

2012 was another tumultuous year for most markets with one word best describing the whole year... uncertainty. Uncertainty continued to cloud all corners of the investing and trading world as a result of geopolitical and economic events that are still impacting the markets as we enter 2013. From a geopolitical perspective the Iranian nuclear standoff continues while the civil war in Syria rages on. On the other hand the evolving sovereign debt issues in the EU region as well as the US fiscal cliff continued to impact most risk asset classes especially the global equity markets. 2012 ended with most markets still trading on a macro basis or as many like to refer to as the risk on and risk off trading environment. Most all risk asset markets (both equities and commodities) can best be categorized as short term trading markets in 2012 rather than investment markets. Volatility was high and trends changed with little or no warning many times during the course of the year.

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