Grim sentiments impact markets

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Asian and Australian stocks dropped for the fifth day in row Wednesday as concerns over Italy’s debt, profit warnings and US corporate earnings damaged regional sentiment. Dow Jones Industrial average closed down 0,78 % on fear that the global economic slowdown will erode corporate earnings.

The EURO/USD fall yesterday, but has recovered trading at 1.2257 in Asia. The Japanese yen continues to strengthen: USD/JPY at 79,3227. The strong yen put pressure on Japanese exports and the Nikkei. Gold dropped from 1600 yesterday, trading at 1573. Oil prices are slightly down. Brent at 98,35. There are no major changes in the overall currencies picture.

Europe returned to the forefront of investors concerns when Italian Prime Minister, Mario Monti, indicated that he will ask European governments to permit that the bailout fund to buy Italian bonds. Monti insisted, however, that Italy do not need a bailout in the scale of Greece. His comments come, however, just weeks after claims that Italy would not ask its European partners to buy Italian debts.

US experienced a new broker scandal when the Iowa-based PFGBest was the latest future broker to collapse. Regulators accused PFG and its owner for over the last two years misappropriating customer funds. In England, new aspects of The Barclays scandal are revealed, portraying a banking culture of greed and mutual accusations.

Copyright: United World Capital

Oil prices increase on stimulus expectations

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Oil prices jumped 2 % yesterday on hopes for stimulus measures and falling US storages. Brent rose above the 100 dollar mark pr. Barrel, and NYMEX traded at 85,50. Euro/USD is continuing its downward trend at 1.224. Higher unemployment figures from Australia put the Aussie dollar under pressure. The South Korean Central bank has written down interest rate in an effort to encourage growth.

While the direction of future Federal Reserve initiatives remains unclear, investors seem to expect that China shall undertake new measures to boost its economy. China is expected to release new GDP numbers on Friday. Preliminary figures indicate that GDP expansion would be the weakest in 3 years. China has reduced interest rate twice during the last month, and new stimulus measures are expected.

Minutes from Federal Reserve’s meeting in June suggest that the US economy has to worsen before FED is going to consider a third round of bond buying. Such a step would weaken the dollar and re-energize the appetite for risk and dollar nominated commodities. The European debt crisis and the grim outlook for the world economy have dramatically decreased the demand for most commodities.

Oil has been hit hard falling 25 – 30 % from its high in the beginning of the tear. The positive movement in oil prices over the last days help by shrinking US-storages, a Norwegian oil strike and Iranian worries, might indicate a turnaround in other commodities. US quantitative easing would surely contribute to such a rebound.

The euro zone crisis starts to take new tolls. The CEO of Bank of Cyprus, the biggest bank in the island, resigned yesterday amidst increasing criticism for his bank’s strong exposure to Greece. It is simultaneously announced that state coffers are running out of funds. There is no money left to pay civil servants salaries for August.

Copyright: United World Capital

Short relief after China’s 3Q GDP

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Chinese last GDP figures fall to its lowest level in three years. After a long period of double digit growth, China had in last quarter a GDP growth on 7,6 %. The numbers came in slightly better than analyst expectations, and created a short-lived relief rally on Asian stock exchanges, which turned up after six days of losses. The GDP numbers also gave a boost to the Australian dollar.

A weaker real estate market and slowing exports had a negative impact on the GDP numbers. Investments are, however, positive and rose expectations for stronger growth in the last half year of 2012. The government policies change to pro growth and stronger emphasize on the domestic market, has led investors to believe that China shall continue to stimulate growth.

The Euro zone received a new blow yesterday when the international rating agency Moodys downgraded Italy to the same level as Kazakhstan and Bulgaria. The downgrading put the EURO under renewed pressure. Euro/USD falls below 1.22. It has recovered and trades at present at 1.2207. EURO hit 1.2166 during Thursday’s trading. The Yen is again up against the dollar, USD/JPY trading at 79,28. American and European stock markets were down yesterday.

Oil prices are demonstrating some strength. Brent reached 101 yesterday and is presently trading at 100,77. US crude, NYMEX, is trading at 85,88 a barrel. Gold is 1571 after hitting a low on 1555 yesterday. Silver is up trading at 27,20 after falling to 26,55 yesterday.

Copyright: United World Capital

Asian shares extend rally

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Asian shares extended their rally on Monday on increased hopes for a smooth Chinese landing. Visiting the Southern, Western province of Sichuan, the Chinese Premier Wen Jiabao raised the prospect of more stimuli if needed. The composite Asian stock index, MCSI, continues 0,3 % up after jumping 1 % on Friday. Euro/USD is inching up at 1.2242 after trading at 1.2169 on Friday. Japan is closed for holidays, but the Yen is, nevertheless, gaining ground, trading up 0,2 % against USD at 79,0955. Brent crude stays above 102 Gold is flat at 1589.

With worries about China off the boil, market concerns are shifting back to the United States and the Federal Reserve’s next policy move. The attention this week is on quarterly results. A slew of US corporate earnings are expected. The main focus is, however, on FED Chairman, Ben Bernanke’s semi-annual testimony to the US Congress on the economy set for Tuesday and Wednesday.

After central banks in Europe, China, South Korea and Brazil all have lowered their interest rates to stimulate growth, markets will seek clues on the Fed’s stance over a stronger monetary policy to support US recovery. Bernanke has earlier stated that the FED will take further easing measures only if necessary.

After the international rating agency Moody’s downgraded Italy to near junk status last week, the outcome of the Italian bond auctions on Friday were better than expected. Three years bond yields were at lowest levels since May. 10-year yields rose to near 6 %. Reflecting investor’s jitters over the Euro, currency speculators last week raised their bets in favor of the US dollar, boosting their positions against the Euro to their highest in one month.

Copyright: United World Capital

Grimmer outlook for global economy

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Both Brent crude (103,57) and NYMEX (88,57) rose for the fourth straight session Monday. Oil is up on expectations on stimulus measures for a slowing world economy. Tension on Iran creates increased worries for oil supplies and crude storages in the US is down.

Stocks rise and the dollar eased as investors await Fed Chairman Ben Bernanke’s testimony to Congress. EURO/USD trading at 1.2292 as investors covered short positions and hunted for bargains. Australian dollar is up on expectations (1.0300 vs USD) that further Chinese stimulus shall increase demand for coal and other commodities exported to China.

US retail sales numbers came weaker than expected yesterday. Together with the International Monetary Fund’s (IMF) new low forecast for global growth in 2013, the weaker retails has increased investors expectations for FED monetary stimulus. IMF is predicting 8,5 % economic growth for China and reduces India’s growth to 6,5 %. IMF has a grim outlook for both the US and Euro zone.

In its midyear “health check” on the global economy, IMF said that emerging markets were dragged down by the economic turmoil in Europe. IMF has reduced their global forecast for 2013 from 4,1 to 3,9 %. Its outlook for 2012 is kept at 3,5 %.

Copyright: United World Capital

Mixed message fails to impress markets

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Ready, but not yet, was the FED’s Chairman Ben Bernanke’s mixed message in a Congressional hearing yesterday. Bernanke offered a gloomy view of the economic prospects, but gave no concrete clues on whether FED is moving one-step closer to a fresh round of monetary stimulus.

Bernanke’s testimony failed to make any impact on global markets. US exchanges mainly concentrated on companies’ earnings where several blue chips came in with better results than expected. Both Coca Cola and the banking group, Goldman Sachs, beat profit forecasts. Tin Asia the Japanese Nikkei was up 0,3 % mainly due to a slight fall in the Yen. USD/JPY is trading above 70 this morning at 79,005.Other Asian exchanges are mixed with no clear direction. Copper prices, a sensitive barometer for growth, are up after four negative days on expectations for growth stimulus.

Bernanke’s statement had no impact on the Euro/USD which continues to hover close to 1,23 at 1.2281. The Australian dollar is still strong close to four weeks high. The British pound, GBP is also showing a stronger trend. Oil prices are falling from yesterdays high, but still steady. Brent crude stays above 103 with NYMEX close to 89. Gold and Silver are striving to find a clear direction. Gold trading at 1579 after reaching 1598 and falling back to 1573 yesterday.

The financial news is dominated by the British parliamentarian hearings on Barclays Bank and the libor scandal. Adding to the bad image of banks internationally, American regulators have accused one other of the world banking giants, HSBC, for comprehensive money laundering of Mexican drug cartel money and for involvement in shadowy terrorist weapon deals.

Copyright: United World Capital

Shares rally on US earnings

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Asian shares rallied on Thursday on better than expected quarterly results from heavy weights IBM and stronger US-housing numbers. The MSCI, Asian Pacific Index, is up 1,6 % and the South Korea’s Kospi bounced nearly 2 %. Japan’s Nikkei is up 1 % in spite of a stronger Yen. USD/JPY is trading at 78,65. Oil prices are high on increased tensions in the Middle East. Brent reached above USD 105 pr. Barrel and NYMEX is for the first time in weeks trading above 90.

US stocks are at highest levels since May helped by IBM, Bank of America and Honeywell. Analysts had expected negative figures from the leading chip-maker Intel. Results were weak, but not shocking. That helped sentiments, which also received a boost from housing figures raising hopes that the market is flattening out. There are still strong expectations that the Federal Reserve shall take active measures to stimulate growth. These expectations contributed to yesterday’s rally.

During his Congressional testimony, FED head Ben Bernanke kept the door open for measures if needed, but downplayed the risk a double-dip recession. The prospect for possible FED actions weakened the dollar and made investors look for riskier assets like the Australian dollar, which yesterday rose to a 11 week high. Economic growth stimulus shall give a boost to the commodity sector with Australia one of the biggest commodity exporters.

A similar upward trend as investors see in the commodity market with oil and copper on the raise is apparent in light commodities. Corn has skyrocketed over the last weeks on the drought in the US and a rapid increasing global population hungry for food.

Copyright: United World Capital

US-data and earnings fight for upper hand

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

After a string of good corporate quarterly results, US- factory activities contracted for a third straight month in July as new claims for jobless aid surged last week. The tech sector with companies as IBM, eBay and Google presented strong earnings and lifted the S&P to a two and a half month high. Nasdaq gained 0,80 %. Dow Jones ended also slightly up after a mixed session where earnings were fighting dismal economic macro news for attention, raising new hopes for an injection of economic stimulus.

Asian shares were down this morning after a strong week posting its biggest weekly gain since January. Oil prices reached a 8-week high as Middle East tensions stoked supply concerns. Brent crude traded close to USD 108 barrel and NYMEX jumped to 92 on fear that the serious internal situation in Syria might spill over and tempt an Israeli/American strike on Iran. The rally in soft commodities as corn and soybean continues. Copper prices, which have traded upwards this week, fall in Asia trade. Gold is steady on 1582.

The Euro zone crisis was back in focus as the German Bundestag discussed emergency aid for the Spanish banks. Spain has tried to distinguish between their 100 Billion Euro bail-out package for their struggling banks and the country’s sovereign debt. The debate made abundantly clear that the Spanish state in the end is fully responsible for support given to its bank through different EU emergency mechanism. The demands for austerity measures have created strong reactions in Spain with mass demonstrations in Barcelona and Madrid.

The Euro is under continued pressure falling towards the USD to 1.2258. The Euro fall to a record low level against the Australian dollar. USD/JPY is keeping up its high levels trading at 78,605. The Libor scandal continues. A group of banks investigated for interest-rate rigging, are looking to pursue a group settlement with regulators. This rather than to face a Barclays style backlash. Barclay settled with British regulators paying a USD 453 million penalty.

Copyright: United World Capital

EURO/YEN at 12 years low

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Euro fell to 12 years low against JPY in Asian trading this morning. The Euro zone sovereign debt crisis and the survival of the Euro are back in the headlines after two of Spain’s indebted regions sought financial assistance from the central government in Madrid. This comes in addition to the 100 billion Euro bail out sought for Spain’s struggling banking sector. The last developments have increased fears that the fourth biggest economy in the euro zone will be forced to follow Greece, Portugal and Ireland for sovereign bail outs. The Euro saw its lowest levels in years also against the USD trading at 1.2112. USD/JPY is at 78,191, down 0,41 %.

The troika consisting of representative from the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission (EU) is back Greece today to control whether Greece has been able to live up to their austerity obligations. The new Samaras government which is supported by the former ruling party PASOK and a small center left party, has been off to a slow start since the elections a month ago. New privatizations have been announced, but nobody really believes in Greece’s intentions.

In Berlin Angela Merkel issued a strong warning, stressing that if Greece was not able to live up to its obligations the country would be forced to leave the Euro. With Spanish regions asking central aid in addition to the banks, the scene is set for a dramatic development. Madrid, Barcelona, and other big cities saw mass demonstrations and clash between demonstrators and police during the weekend. This constitutes a bad omen to the bond auction today. Last week the interest rate on long term Spanish bonds fell to 7,2 %, below the critical 7 % floor.

In Asia, stocks fall strongly on worries on the Euro zone and a renewed report of slowing Chinese growth. A central bank analyst predicted 7,4 % growth in the third quarter, lower than the 7,6 % growth in the second quarter which most observers saw as a bottom and a token that the decline in GDP is flattening out. MSCIs broadest index for Asia-Pacific shares fell two percentages. Mining stocks were especially hard hit. Oil prices also fell moderately. Brent crude is at 105,56. NYMEX at 90.51. The speculations on weaker growth in China have put commodities under pressure.

The bad news from Asia is expected to have a negative impact when markets open in Europe and USA where futures are pointing down. The earning seasons continue with Apple on Tuesday and Facebook reporting results on Thursday.

Copyright: United World Capital

Euro drops on Spanish fears

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

The Euro fall to multiyear lows versus the Yen and the dollar on Tuesday on fears that Spain shall be forced to ask for a full-scale international bailout; and renewed rumors that Greece might have to leave the Euro. The international rating agency Moody’s changed its outlook on German, Luxembourg and the Netherlands to negative, warning that Europe’s top rated AAA countries may have to increase support for indebted Spain and Italy. Euro/USD is trading at 1.21.26 after dipping even lower Monday and in Tuesday morning trade. Analysts predict that the Euro might drop as low as to 1,10 during the next half year.

The Spanish bond auction saw a 7,50 record high interest rate on ten years bond after two of Spain’s regions, Valencia and Catalonia sought help under a 18 billion Euro program aimed at helping regional finances. More regions are said to follow suit. The Euro also hit record lows against the Australian, Canadian, and New Zealand dollars. A European Central Bank statement stressing that Greek bonds are not eligible as collateral, did neither serve to support the euro. The Euro fall to a three and a half years low against British pounds, GDP and saw half year bottom levels against Norwegian and Swedish crowns.

The Asian stock market stabilized Tuesday after yesterday’s steep fall. The South Asian Pacific index, MSCIX, fall 0,8 % after a second negative day in New York. McDonald delivered a disappointing result and fall 2,8 %. With one third of the companies reporting quarterly results, 67 % have reported better than expected results. That helped market sentiments last week, but McDonald’s results did not change this week’s negative trend.

Oil prices fell sharply on Monday down for a second day on worries that Spain is heading for a bailout and the euro-zone debt crisis is spreading. This prompted investors to sell assets perceived as risky boosting the dollar and US treasuries. Brent fell more than 3 % to 103,50 and NYMEX to 88 USD pr. Barrel. Gold is steady on 1576. The last developments in global markets have increased the likelihood that US Federal Reserve shall undertake monetary measures to stimulate the economy. That shall probably boost precious metals as gold and silver. Statistics presented by one of the biggest global banks, HSBC, indicates better July factory numbers from China, an indication the Chinese government stimulus have started to work.

Copyright: United World Capital

Apple misses earning targets

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Apple, the world most valuable technological company, fell short of markets expectations when it presented its quarterly results yesterday. Shares dropped more than 5 percent. A sagging European economy and a pause in iPhone sales ahead of a new version saw revenues slip from previous quarter. The rare miss highlights how the Apple brand is becoming less resistant to economic and product cycles that for a long time have plagued rivals. Net income jumped 21 % to USD 8,8 billion, 10 percent below expectations. The steepest fall was registered in Asia.

Stock markets continued to fall for a fourth day in Asia. Technology stocks were hardest hit. The fall followed stock losses in Europe and the United States. The Euro wobbled above multi-year lows against major currencies. Euro/USD fell to 1.2068 trading at 1.2074 in the morning. Spain’s ten years bonds hit a record low interest rate on 7,64 % increasing fears that Spain might need a sovereign bail-out. Greece seems unlikely to meet terms conditional to its aid package. This has led to renewed speculation of a breakup of the Euro zone.

The Japanese Nikkei fell to a seven-week low before trimming winter session losses to 1 %. Grain prices, the big commodity winner over the last weeks, have dropped on profit taking the last two days. Better weather forecasts in drought stricken areas; have given some relief to the outlook for US crops. Copper hit a month low with a further easing in NYMEX, US crude oil to USD 88,36 a barrel. Brent crude steadied around 103,50. Oil investors are following the development in the Middle East with increased fear.

The outlook for commodities is closely linked to Europe. The continued downward pressure on the Euro might, however, lead investors to seek towards traditional safe havens as precious metals, this also taking the weak state of the US economy into consideration. Gold is trading at 1582 in the morning up from yesterday’s low seventies. Silver has over the last weeks several times hit back from a technical resistance level on 26 – 26,50, trading at 27,02 in the morning.

Copyright: United World Capital

USA: Cocktail from News and Quarterly Results

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

On Wednesday, July 25, the stock market of the USA showed multidirectional dynamics against an exit of weight of quarterly results, statements of representatives of FRS and European Central Bank, and also the publication of statistical data. Therefore, the representative of FRS with a vote in FOMC - Sara Raskin declared that at the next meeting the question of purchase of bonds on balance of Federal Reserve System will be considered. On this message expectation of investors, concerning introduction of the new program of quantitative mitigation inflamed with new force.

As to the Old World, here the member of executive council of the European central bank Evald Novotny reported about existence of arguments in favor of granting to the ESM banking license. This statement was apprehended by investors with a positive since increase of potential of Stabilization Fund could help to fight more effectively against debt crisis, especially in case of the request of Spain for the international financial help.

The statistics on housing sector in the USA appeared disappointing. Therefore, sales of new housing in June were reduced from 0,382 million month earlier to 0,350 million while analysts predicted decrease only to 0,370 million.

In the middle of the week, some large companies of the USA reported financial results of the past quarter. Thus, Apple and ConocoPhillips firms absolutely disappointed investors, while the reporting of Boeing pleased expectations.

Following the results of the trading session the indicator of "blue chip" the index of Dow Jones Industrial Average grew up for 0,465 % and was closed on a level of 12676,05 points, the index of the wide market S&P 500 went down for 0,031 % to level 1337,89 points, and the index of the hi-tech companies Nasdaq "grew thin" for 0,306 % to a level 2854,24 points.

Oil has been rising in price yesterday. This morning prices of "black gold" are slightly pointing down and traded on a level of 104.00 for Brent and 88.61 on Light a barrel. Oil has risen despite the unexpected and significant increase in its reserves in the U.S. for the last week, most probably in connection with the statements of the Ewald Nowotny – the representative of ECB on the advisability of granting the European Financial Stability Fund ESM banking license.

The euro is strengthening against dollar due to the coming news background and is traded this morning on a level of 1.2146 rebounding from the support level of 1,20 to which the pair came down the day before. But, nevertheless, the growth is sluggish and does not dispose to open "long positions" at current levels.

Today we are expecting a block of information on the U.S. labor market, the statistics on U.S. real estate market and data on orders for durable goods. As well as the season of the presentation of quarterly results continue, reports will provide Amazon.Com, Facebook Inc. which expected earnings per share are $ 0,12, France Telecom SA, New York Times Co., Rolls-Royce Holdings PLC, Starbucks Corp., Statoil ASA, Volkswagen AG.

Copyright: United World Capital

Speech of Mario Dragi inspired the world markets, but it is not obvious for how long time.

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

On Thursday, July 26, the stock market of the United States finished trading session by considerable growth of the main indexes. Following the results of session the indicator of blue counters of Dow Jones Industrial Average raised on 1,67 % to level of 12887,93 points, the S&P500 increased by 22,13 points or 1,65 % to a mark of 1360,02 points, and the Nasdaq reached a point 2893,25 points.

The external background for the American session was extremely favorable taking into account comments of the president of European Central Bank at investment conference in London. Mario Dragi declared that all necessary measures will be taken for rescue of euro, "believe me, it will be enough". On concepts of investment community the statement of the Dragi means that from European Central Bank it is possible to expect intervention in a situation in the debt market for the purpose of knocking down of profitability of debt papers of Spain and Italy.

The markets also count that Bernanke will keep the promise to stimulate economy growth in spite of the fact that the yesterday's figure on unemployment could reduce this probability. The number of addresses decreased to 353 thousand while 380 thousand were expected. Meanwhile, more important figure will be presented today. Data on gross domestic product of the USA, as expected, will finally strengthen or will weaken a factor of FRS of the USA. Let's remind that from meeting of FOMC 31 of July-1 of August investors wait for decisions, significant for the financial markets. Besides gross domestic product, figure data on consumer inflation in Germany is coming today.

The optimistic spirit on world markets remains in the morning, after yesterday's rally, however, players will wait for new drivers of growth in case of which absence "bulls" risk to get under a wave of fixing of profit. On Friday important news can arrive from a meeting of the Greek prime minister with "Troika" of creditors. Investors in general are ready to continue purchases that only really disappointing news can change.

Copyright: United World Capital

Asia extends gains on stimulus hopes

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Asian stocks extended their impressing gains from last week on Monday. The Asian Pacific MCSI index gained 1,1 % to reach a three week high. This after posting its biggest daily rise in a month with a 2,2 % jump on Friday. Korean, Australian, and Japanese shares all rose supported by expectations that the US Federal Reserve and the European Central Bank, ECB, will undertake stimulus measures to support its fragile economies.

The turn in global market was triggered last week when the President of ECB, Mario Draghi, pledged he would do whatever it takes to safe guard the Euro. His comments raised hopes that ECB on its meeting tomorrow, will act to ease borrowing strains for Spain which last week saw interest rates on 10 years bonds raise to 7,78 percent. Both Spain and Italian bond rates fall after Draghi’s statement.

The Euro/USD fell 0,4 % to 1,2285 after reaching a three week high on 1.2390 touched on Friday. The Euro fall as deep as 1.2042 before Draghi’s statement. The currency picture has stabilized somewhat with USD/JPY trading at 78,381. Oil prices are up with Brent crude at 106,64. Gold is at 1621 and Silver 27,61. Copper is higher and corn raises gain after technical downward corrections last week.

The hopes for a new round of quantitative easing received a new boost by dismal US growth figures at the end of last week. US growth is slowing to an annualized rate of 1,5 % in the second quarter. The pace of growth is now, too, slow to bring down unemployment, threatening both global economic recovery and President Barack Obama’s prospect for reelection.

Friday’s figures were broadly in line with market expectations. It shall add to Federal Reserve’s fear on unemployment, but may not be alarming enough to force immediate action for monetary easing during the FED is meeting this week.

Copyright: United World Capital

Stimulus hopes keep markets rise

DAILY MARKET REVIEWS
by Arne Treholt Vice-President of Business Development and Investments

Hopes for further stimulus when the European Central Bank, ECB, and US Federal Reserve meet during this week, helped the Asian markets rise for the third day in row. After impressing gains both at Friday and yesterday, the South Asian Pacific Index, MSCI, added 0,8 percent this morning. Skepticism about any long-term effect of ECB actions, however, capped the euro. Euro/USD trades at 1.2280, down from Friday’s high of 1.2390, but well above 1.2042 reached last week.

ECB President, Mario Draghi, stated last Friday that saving the Euro was an overriding concern. However, markets are waiting to see what this mean in practical terms, and hope for a clear indication when ECB meets later this week. It is presumed that the ECB considers continuing its controversial bond-buying program and even starting printing money. This type of quantitative easing is probably still weeks away. It is neither expected that the Federal Reserve will make any move towards stimulus before after the holidays in September. The interest rate of Spain’s ten years bond fall to 6,61 % yesterday.

President Barack Obama added his voice to the Euro debate on Monday. Predicting continued months of headwinds for the US economy, Obama stressed that he thinks the EURO shall remain intact. He admitted, however, that Europe’s debt still poses a big challenge to the world economy.

Brent crude fell back to USD 106 a barrel on Monday. That in spite of lower OPEC production in July. Worries that expected stimulus may not be enough to lift slowing economies, overshadowed signs of reduced oil production.

While most attention is focused on the Euro/USD, both Australian and New Zealand dollars continue their positive upward trend. USD/JPY is at 78,18 with the yen getting stronger. Gold (1623) and silver (28,24) are inching up eying the FED meeting.

The US-markets ended flat yesterday. Intel posted weaker results than expected,. That weighed on the high technology index, Nasdaq, which closed in red. HSBC, one of the world’s leading banks, are reporting results today. It announced simultaneously that it has set aside USD 2 Billion to meet claims following a string of scandals lately, including accepting money from a Mexican drug cartel.

Copyright: United World Capital