Record high oil prices at a barrel deepened worries about inflation on Thursday and weighed on some Asian stocks although Japanese shares ended slightly higher, as dealers trimmed their bets on further weakness. The dollar trudged higher against the euro after earlier hitting a one-month low after the Federal Reserve slashed its United States 2008 growth forecast
Movements in the rand currency are more likely to be linked to volatility of the United States dollar than other factors, such as recent attacks on migrant workers, South African Finance Minister Trevor Manuel said on Wednesday. ”I think that we’re living through a period now where there is a lot of volatility in exchange rate markets everywhere,” he said.
Despite a number of ongoing risks and structural imbalances in South Africa, the rand has a very good chance of strengthening impressively for the rest of this year and into 2009, say market analysts ETM. They say, however, that levels approaching 6,50 to the dollar — should they be reached — would probably be difficult to sustain.
Oil retreated below a barrel on Monday in volatile trade that saw it briefly hit an all-time high earlier in the session. United States light crude, down more than at one point, rallied to a new record of ,40 a barrel, but by 4.17pm GMT it was ,04 down at ,92. London Brent crude futures, whose nearby contracts have moved into contango, fell ,78 down to ,62.
Increasing confidence that the worst of the credit crisis is over boosted world stocks on Monday while inflation concerns grew with oil prices heading towards a barrel. Investors have stopped taking it for granted the United States Federal Reserve will cut interest rates later in the week, although most still expect such a move.
Oil hit a new record near a barrel on Monday, boosted by a string of bullish factors that include a United Kingdom refinery strike and disruptions to Nigeria’s output that highlight the market’s anxieties over threats to supply. Prices held firm below earlier highs, despite a rally in the US dollar versus the euro and yen.
Germany’s Finance Minister, Peer Steinbrück, blamed the Bank of England on Friday for the collapse of Northern Rock and the loss of 2 000 jobs, savaging the central bank for not pumping enough liquidity into money markets last year. Unlike the central banks of the United States and European Union, the Bank of England failed to support the banking sector with vital loans, Steinbrück said.
Fed up with the flaws of Barack Obama, Hillary Clinton and John McCain? Here’s your chance to set things right. An innovative website using Wikipedia-like collaborative software has given people around the world to design the perfect — if sadly fictional — candidate for the United States presidency.
The United States mortgage crisis has spiralled into ”the largest financial shock since the Great Depression” and there is a one-in-four chance that it will cause a full-blown global recession, the International Monetary Fund (IMF) warned on Wednesday.
Oil prices rose on Monday in Asia as prospects for further cuts in United States interest rates seemed more likely after poor US jobs data at the end of last week. The US Labour Department said on Friday that employers cut payrolls by 80 000 jobs last month, many more than analysts had expected.
United States employers cut a surprisingly large 80 000 jobs in March, marking the biggest decline in employment in five years, a government report showed on Friday. The mounting job losses swelled the national unemployment rate to 5,1% last month, compared with 4,8% in February.
The head of the crisis-hit investment bank Bear Stearns has blamed short sellers and market manipulators for spreading negative financial rumours to induce a collapse of the 85-year-old Wall Street institution. Bear’s chief executive, Alan Schwartz, told the senate’s finance committee in Washington that his firm had been as well-capitalised as its rivals.
China is too far down the road toward a market economy to turn back from reforms now, even if United States financial market turmoil is causing it some qualms, US Treasury Secretary Henry Paulson said on Thursday. Paulson told reporters the biggest threat to continued reforms came from firms in China that want to be protected against competition.
Gold, oil, diamonds, metals: commodities have been booming. But as prices hit record highs, is the bubble about to burst? Turmoil in financial markets has, some analysts say, pushed prices well above fair market value across energy, metals and agricultural goods as investors take flight to supposed ”safe plays”.
Democratic hopeful Barack Obama on Wednesday dismissed Republican White House candidate John McCain’s economic plan as an insult, which left homeowners to face a mortgage crunch alone. In his first campaign appearance since a short vacation, Obama fired a new volley at the Arizona senator in a battle that is sure to intensify.
The JSE remained firm by midday on Tuesday as overnight gains in the United States triggered good buying interest among global equities. By noon, the JSE’s broader all-share index was up 2,22%. Banks gained 3,1% and financials lifted 3,06%.
Hillary Clinton on Monday pitched a plan to stop a mortgage crisis degenerating into a full-blown recession as new vitriol spilled over in her Democratic White House struggle with Barack Obama. Obama’s camp said Clinton would do anything to win, while her aides accused him of stooping to gutter politics.
Masaaki Shirakawa, the Bank of Japan’s acting governor, has warned that the country’s economy faces an uncertain future. It comes at the end of a week in which the Nikkei share index sank to its lowest level for almost three years. Shirakawa took up the post after Parliament failed to agree on a long-term appointment.
Central banks on both sides of the Atlantic are in talks about the feasibility of mass purchases of mortgage-backed securities in a bid to solve the global credit crisis, the Financial Times said on Saturday. The newspaper, without citing sources, said the talks were at an early stage and part of a broader exchange on how to battle the turmoil in financial markets,
JPMorgan Chase is offering bankers at Bear Stearns bonuses to stay and support the controversial takeover, a person familiar with the situation said on Thursday. Those employees who stay at the close of the deal would receive a bonus that will include JPMorgan shares.
The JSE remained in the black by noon on Wednesday, with a trader explaining that the United States Federal Reserve’s rate cut was adding buoyancy to the market. "The Fed’s rate decision, which saw rates decline from 3% to 2,25%, is still adding buoyancy to the JSE," he said.
The Federal Reserve slashed United States interest rates by a hefty three-quarters of a percentage point on Tuesday, giving a lift to stock markets already jubilant over stronger-than-expected investment bank earnings. Trying to avert a deep recession and financial market meltdown, the central bank cut less than many traders had expected but left the door open to additional reductions.
The JSE was little changed at its softer levels by midday on Tuesday as investors took to the sidelines ahead of the United States Federal Open Market Committee’s rates decision later in the day. By noon, the JSE’s broader all-share index was down 0,86%. Resources fell 2,26%, the gold mining index dropped 1,76% and the platinum mining index shed 0,76%.
Global stocks fell and the dollar tumbled on Monday as a fire sale of Bear Stearns and an emergency Federal Reserve cut of a key lending rate sparked fears that a worldwide credit crisis will claim more casualties. European shares sank more than 3%, following a sell-off in Asia where Japan’s leading indexes shed more than 3,5%.
An emergency move by the United States Federal Reserve to cut its discount rate has continued to weigh on markets, sending the JSE below the 30 000-level by midday on Monday. The Fed’s move to cut its discount rate, its lending rate to financial institutions, to 3,25% from 3,5%,
JP Morgan Chase set a deal to buy stricken rival Bear Stearns for a rock-bottom price, while the United States Federal Reserve expanded lending to securities firms for the first time since the Great Depression to prop up the financial system. The shock news, the biggest sign yet of how devastating the credit crisis is for Wall Street, slammed the US dollar to a record low against the euro,
The global credit crunch claimed its biggest victim yet on Friday when the United States Federal Reserve orchestrated an emergency bail-out for Bear Stearns after a cash crisis prompted a run on the US’s fifth-biggest investment bank. President George Bush sought to calm fears of a deep recession in the world’s biggest economy.
Stocks tumbled on Thursday as investors recoiled following a further decline in the dollar, spikes in gold and oil prices and a warning that a Carlyle Group fund is near collapse. The major indexes each lost more than 1%; the Dow Jones industrial average at times fell more than 200 points.
Gold rose to all-time high on Thursday as investor buying speeded up after the dollar sank and oil hovered near lifetime peaks. Gold rose to .70 an ounce before easing to trade at ,60/992,0 at 11.08am GMT, against ,90/982,70 late in New York on Wednesday.
Asian and European stock markets plunged on Thursday as investor sentiment was hammered by resurgent credit concerns, the plunging dollar and record high oil prices, dealers said. Global financial markets were also roiled after a troubled fund backed by United States private equity giant Carlyle said it expected its creditors to seize its remaining assets.
Banks and financials helped the JSE advance further by midday on Wednesday as they cheered the move by the United States Federal Reserve to raise liquidity in financial markets. At noon, the JSE’s broader all-share index had gained 1,35%. Financials collected 1,94%, while banks were up 1,67%.
Asian and European equities surged higher on Wednesday, mirroring an overnight rebound on Wall Street after major central banks announced a massive cash injection for stressed financial markets. However, dealers voiced scepticism over whether the concerted central bank action would head off the global credit crunch and bring stability to choppy world stock markets.