Weekly Markets – 25/08/08 – US banking liquidity still worrying analysts even more
The week from a global perspective
U.S. stocks fell, sending the Standard & Poor’s 500 Index to its first weekly decline since July, as oil prices climbed and concern grew that the government may bail out Fannie Mae and Freddie Mac.
European stocks ended sharply higher, lifted by a rebound in financial shares on the prospect that U.S. investment bank Lehman Brothers might be bought, while oil eased to around $118 a barrel.
Asian stocks rallied the most in four weeks on Friday, after a poor few days earlier, led by carmakers and airlines, as oil’s biggest plunge in four years eased concern that rising energy costs and faster inflation will erode earnings.
Crude oil was little changed after falling the most in three years as BP Plc restarted flows through a Caspian Sea pipeline and as the dollar gained against the euro.
The gains in crude oil and the marked drop in the U.S. currency bolstered precious metals, with gold rising 2.7% as bargain-hunters swooped in to buy the metal.
The US$ rose to a two-year high against Sterling this morning after data last week showed Britain’s economy was stalling, raising prospects of an interest rate cut by the Bank of England.
The week from a South African perspective
The JSE ended slightly lower last week after a better session on Friday inspired by gains in overseas markets, but it came off from its intraday highs as precious metals pulled back along with crude oil prices. After spending most of the day in positive territory in tandem with stronger world markets, South African near-dated futures closed lower on Friday as metal prices retreated along with crude oil prices.
June-delivery platinum jumped 3.8% to close at $1,343 an ounce on the Tokyo Commodity Exchange.
The Rand remained steady around its firmer levels on Friday, in quiet trading conditions ahead of the weekend. The local unit traded between the 7.65 and 7.69 levels for much of the session, holding onto gains made in the previous trading session on Thursday.
The week ahead
Tuesday
– Washington, US Federal Reserve issues the minutes from its 5 August meeting
– Singapore, 40th Association of Southeast Asian Nations meeting of economic ministers
Wednesday
– Pretoria, Stats SA releases July consumer inflation data
Thursday
– Pretoria, Stats SA releases July producer inflation data
Friday
– Pretoria, SA Reserve Bank releases July credit and money supply data
– Pretoria, SA Revenus Service releases July trade account data
– US, Early close (16.00 GMT) of the US fixed income markets ahead of Labour Day
