Markets start Fed Week in jittery mood – business live

Discussion in 'Market News' started by Lily, Dec 14, 2015.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    All the latest economic and financial news, as investors brace for Wednesday’s Federal Reserve meeting.

    8.52am GMT

    South Africa’s currency, the rand, has surged overnight after the country got its third finance minister in a week.

    The rand surged by 5% after respected politician Pravin Gordhan (a former finance minister) was appointed, in a remarkable u-turn by prime minister Jacob Zuma.

    Related: President Zuma hires South Africa's third finance chief in a week

    Let's put this #Rand "surge" into a bit of perspective #PravinGordhan

    “Critics would say having a finance minister serving only two days doesn’t bode well for the reputation of South Africa.

    “International investors are probably thinking: Why didn’t the president make a much more considered decision in the first place?”

    Rand cheers return of Pravin Gordhan - result is brilliant, process an unmitigated disaster for SA cc @CitadelSA

    8.36am GMT

    London’s FTSE 100 index of blue chip companies has climbed over the 6,000 market, as shares claw back some of last week’s losses.

    So the last full trading week of 2015 is underway and – at least for now – traders seem eager to try and put some of the recent malaise behind them.

    What’s more, the sheer volume of surplus cash that is in play may well ensure that corporate borrowing costs barely feel any fall-out as a result of the policy change, mitigating some of the real downside for corporate balance sheets.

    8.22am GMT

    The prospect of a US rate hike has already spooked investors in emerging markets.

    Today’s Asian selloff helped to send the MSCI Emerging Markets Index down to its lowest level since 2009.

    Emerging stocks at six-year lows before Fed decision

    8.11am GMT

    Stephen King, senior economic adviser at HSBC, predicts that US interest rates are unlikely to rise much in 2016, even if the Fed hikes on Wednesday.

    The Fed needs to tread very carefully because China, and other parts of the world, are not as robust as the US itself.

    8.02am GMT

    The oil price is dropping this morning, amid growing speculation that Iran will fuel the world’s growing supply glut.

    Brent crude has fallen by 0.6% in early trading to $37.69 per barrel, while US crude is down 0.5% at $35.43.

    And #oil just keeps on Iran says "no chance" will delay plan to boost shipments

    Iran is on track to ship 1.26 million barrels a day (bpd) of crude this month, according to an industry source with knowledge of the OPEC member’s tanker loading schedule.

    That preliminary number, nearly a quarter higher than levels just two months ago, could stoke worries over a global supply glut that have intensified since the Organization of the Petroleum Exporting Countries abandoned its output ceiling on Dec. 4.

    7.49am GMT

    7.49am GMT

    Over in Asia, stock markets have endured a bumpy ride today as the prospect of a US rate hike on Wednesday night dents confidence.

    Japan’s Nikkei tumbled by 3% at one stage, closing down 1.8%, while 2% was wiped off Australia’s S&P index.

    China’s decision to loosen its grip on the yuan and allow slow but steady depreciation in recent weeks has added to concerns that the world’s second-biggest economy may be more fragile than expected.

    The move, which followed an announcement on Friday of a shift towards a trade-weighted basis instead of exclusively tracking the US dollar, will also heighten concerns that China is prepared to intensify a currency war with rival regional economies in order to keep its huge export sector competitive.

    Related: Asian stock markets drop as China devaluation, oil and Fed stoke fears

    7.27am GMT

    Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

    With the US Federal Reserve likely to start its interest-rate hiking cycle next week, we reiterate our cautious view on emerging markets for the coming months.

    Debt in emerging markets (EM) has risen significantly over the past ten years and EM currencies have weakened, heightening concerns about credit risk.

    Our European opening calls: $FTSE 5955 up 2 $DAX 10351 up 11 $CAC 4555 up 6 $IBEX 9617 down 14 $MIB 20998 down 18

    Continue reading...

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