Well, the old saw about selling in May and going away turned out to be pretty accurate after the big sell off in silver on May 7 triggered the market volatility of the past three and a bit weeks.

Not helping of course was a new Wall of Worry which mostly consisted of those 2010 fears; Greece, US growth, global inflation and of course the hard landing in China which has yet to happen.

There were a couple of new worries, major disasters such as the quake in New Zealand in February, the much bigger disasters in Japan on March 11 (and the Fukushima nuclear power station crisis that continues) and credit rating fears or moves on the US, Italy, Greece, Japan, Australian and NZ Banks.

So May was a down month, for many markets, the worst since midway through last year when the Greek crisis was becoming the Irish crisis.

Yesterday and overnight a different story. Those fears and worries forgotten as world markets finished May on a high note.

The MSCI All Country World Index was up 1.3% at the close of trading in New York, which cut the month's loss to 2.5%. In the US the Dow ended the day up 128.21 points, or 1%, to 12,569.79. The Nasdaq Composite rose 38.44 points, or 1.4%, to 2,835.30. The S&P 500 gained 14.10, or 1%, to 1,345.20 The Dow tumbled nearly 2% for the month, while the S&P 500 and the Nasdaq lost 1.3%. The Stoxx Europe 600 Index rose 0.8%, trimming May's loss to 1%.

US Treasury bonds had a good month and the yield on 10 year securities dipped to 3.05% overnight after US consumer confidence hit a six month low and American house prices again fell and are now in a double dip.

The yields touched 3.04%, their lowest level since early December.

Ten year bonds started May around 3.30%, and had hit a high a month earlier of 3.62%, so they have had a significant rally as doubts emerged about the health of the US economy.

In commodities, which led May's volatility, the S&P GSCI Index of commodities sank 6.8% over the month, with the 1.2% rise on the last day of the month easing the fall.

At one stage last week it was off 10%.

New York WTI crude oil for July delivery jumped $US2.11, or 2.1%, to $US102.70 a barrel, the highest settlement since May 10.

But that couldn't stop oil losing almost 10% in May, its biggest monthly fall for a year.

Comex August gold for August eased 50 cents to $US1,536.80 an ounce overnight as the fears about Greece eased.

Gold lost 1.2% over the month.

Comex July silver rose 1.2%, to settle at $US38.31 an ounce.

But over the month, silver lost 21%.

That was the worst month for silver since August 2008.

Copper ended with a tiny gain at $US4.1935 a pound. That left it flat over the month.

LME nickel lost 12% in May.

Silver jumped nearly 30% in April as it charged towards the crash in early May.

Chicago wheat futures fell 2.4% this month.

The price has jumped 71% in the past year off the back of the ban on Russian exports and bad weather in Australia, the US and Europe.

Wheat prices could weaken from now on after Russia lifted its ban at the weekend.

Corn lost 1.2% in May, but has more than doubled in the past year.

Soybean futures lost 1.3% in May in Chicago,

The Australian dollar lost around 2%, falling from $US1.09 on April 29 to $US1.680 in New York this morning.

The Trade Weight Index fell from 78.9 to 77.8 last night.

The US dollar gained roughly 2% and the euro lost about 3% in May.

Markets in Europe were up by more than 1%, taking up the upbeat tone from Asia.

The MSCI Asia Pacific Index rose 1.3% yesterday after a solid day of trading across the region.

In Australia, the ASX200 index was up 40.8 points or 0.9% at 4708.3 at the close yesterday, while the All Ordinaries index was up 42.8 points, or 0.9%, at 4788.6.

The ASX200 fell 2.4% for the month, its worst performance since June last year and the second consecutive monthly drop.

Japan's Nikkei Stock Average advanced 2% to 9,693.73.

India's Sensitive Index rose 1.2%, despite weaker than expected first quarter growth of an annual 7.8%.

South Korea's Kospi Index jumped 2.3%, Hong Kong's Hang Seng Index increased 1.8%, while China's Shanghai Stock Exchange Composite Index added 1.4% after shaking off a bout of early weakness.

Copyright Australasian Investment Review.
AIR publishes a weekly magazine. Subscriptions are free at www.aireview.com.au

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