Oil Prices Hit Over $60

Exciting news for the commodity futures market - oil prices have reached six-month highs, at over $60 a barrel.

US light crude oil was up to $63.45 a barrel while Brent crude rose to $62.50 by close of business on Wednesday. Both were up by over $1. The news has meant that Saudi Arabia's oil minister has predicted prices will reach close to $80 by the end of the year.

Opec, the main oil cartel made up of 12 member countries, is due to meet in Austria. Since last September, they have cut output levels three times, which reduced the amount of barrels per day in circulation. It had been said that they would call for further cuts in Austria, but this may now not be necessary any longer...

Of course there are those who say things aren't as great as they seem - there are even those who predict a fall in oil prices by the end of the year, sharper than the early 1980s.

Who's right, who's wrong - who knows! But the return to confidence in the oil sector is surely something to think about.

Inflation Still Falling

It ain't over till....well, we're not sure actually, and outlooks are changing on a daily basis. Today, the USA are increasing confidence (despite rising jobless numbers) on the foreign exchange market by saying they believe their recession will be over by the third quarter. Confident indeed, and the increase in risk appetites on the markets is showing a weakening of some of the 'safer' currencies.

In the UK, deflation still lingers and looms on the horizon. Easy to forget about, this factor could mean some nervous times. The Office for National Statistics showed that both the CPI and the RPI were down in April, meaning annual inflation is also down.

What's to blame for this? Top of the list are lower fuel and food prices. The data released has caused economists to say that deflation is still a higher risk than a "rapid rise in inflation".

Euro Falls on Bad Debt Warning

The German financial regulator, BaFin, has hit out at German banks - causing a plunge in the euro's recent strength.

BaFin released its annual report and its president added to the doom by saying that unless German banks take advantage of the Government's protection plans, they will be plunged into their worst debts ever.

The currency markets showed the euro's fall - the first in seven days - against the US dollar, to $1.3947, down from $1.4017 on Monday. BaFin president Jochen Sanio said the markets would "kill" those banks that do not accept aid from the state.

The report goes against that which shows business confidence in Germany has risen, something which has given rise to an increase in general market confidence. Many are saying that it is too early to celebrate - and the BaFin report clearly supports this.

Japan Economy Suffers GDP Shrink

The economy of Japan has shrunk to record levels in the first quarter.

Japan's first quarterly results showed a drop in GDP which was much higher than those of the USA and the Eurozone. While the latter two had drops of around 2 percent each, while Japan's drop was over 15 per cent.

The PM of Japan has called for tough action to be taken in order to recover the suffering economy, and companies have already reacted by announcing more job cuts. Areas that drastically need assistance are exports, household spending and company output.

The Japanese yen will possibly take a blow thanks to lowering confidence of investors in the nation - look at foreign exchange market data to track its progress.

Derivatives Market in the USA Suffers

According to the BIS, which was formed in 1930 to regulate the US financial market, there has been a shrinkage in the derivatives market.

Since September 2008, when the Lehman Brothers experienced their grand disaster - a catalyst for the rapid world financial downturn - investors have been less keen on taking on the high-risk climate of the derivatives market.

It is well known that this market - formed of financial instruments based on loans, commodities, currencies, bonds, stocks, interest rates to name but some areas - carries high risks. Gains can be hugely profitable but it is just as easy to make huge losses.

Since the global financial crisis began to take speed, the derivatives market has been blamed for much of the losses and disasters that occurred in the USA.

Sir Victor Steps Down as Lloyds Chief

Sir Victor Blank, Lloyds chairman, has announced that he will step down from next year.

The announcement has shown an increase in shares in the bank - a surprise move, one which may have affected CFDs traders - but certainly shows a possible link between the chairman's exit and the bank's future.

The decision has been welcomed by many who feel that his choice to take over HBOS, a merger which caused billions of losses, was a very poor one. But board members have praised Blank, saying that he was - and still is - a "first class chairman" and that he is in no way solely responsible for the losses of the bank.

The Treasury oversees the 43 per cent share in the bank that is now owned by the UK taxpayer - a move which was made in order to try and salvage the ailing "superbank".

Credit Card Fraud - Customers or Banks to Blame?

Before 2004, every credit or debit card had its data stored on the magnetic strip, and identification was verified using the cardholder's signature. Then, Chip-and-PIN was introduced, changing card safety.

Banks are sure that the system is completely secure, and are unwilling to believe customers who claim they have been the victim of credit card fraud. According to them, if customers have been victims, it is their own fault: by being careless - or acted "without reasonable care". This is being called into question by customers and feel unfairly blamed for the way they have acted - or not as the case may be.

The UK payments association, Apacs, has confirmed that debit and credit card fraud at UK cash machines has risen by 31 per cent this year. So the question remains - is there indeed a slight hitch in the apparently unbeatable chip and PIN system?

Stress Tests for Europe on the Cards

The IMF's spring forecast for Europe was a bit of a blow to financial sectors - investors, banks and the foreign exchange market....

Overall, it forecast that the stronger economies of Europe will contract by 4% in 2009, and that those of the emerging economies would shrink by 4.9%.

Now, the IMF is calling for Europe to mirror the USA's recent actions and take out stress tests on banks around the region. The IMF believes Europe urgently needs an indicator on the status of the banks and their performances, plus better clarity as to losses.

Doing stress tests in the USA did help to gain confidence for the country as a whole, but would it also provide back up to the IMF's dire forecasts? Or would it show that there may be more to be positive about?

Euro Continues Strength, Pound in Jeopardy

Watch out for the Euro - it is the new strong currency on the block. It has reached seven week highs against the US dollar at the end of Monday, this fact being put down largely to the ECB's decision to keep interest rates on hold.

Over in Britain, the pound has also been strong in recent times, although don't get too used to it... it might drop again when latest unemployment figures are released. There's nothing like a round of rising jobless rates to cause a currency to receive a hard time.

It's not all bad news though - the sunny Easter weather meant that more people hit the shops, and retail figures for April are up.

Bank Results Mean Futures Rise

Bernanke seems pretty happy with the outcome, and indeed US Futures stocks rose as a result: the results of the stress test conducted on the main US banks.

Ten of the tested banks will need to boost their cash reserves, but the amount by which they need to do this has been less than expected - the total figure stands at around $75 billion.

The central banks of Europe also had decisions to make - and the outcome was quite different. Many had speculated that the ECB was ready to take on "unconventional" and drastic measures such as the creation of new money, but in fact they seemed to stay on the safe side. Interest rates were cut to an expected 1 per cent. The Bank of England, on the other hand, kept rates at the same level and have plans to introduce yet more money to use in quantitative easing. The news brought a weakening to the Pound against the dollar and the euro, but in fact bank officials are saying that so far, their measures have been going well!

Traders' Fears Mount Ahead of ECB Meeting

The ECB is set for their latest meeting on Thursday, and tension is mounting. It is known that they will cut interest rates again, to 1 per cent down from 1.25 per cent, but it is the other measures that they will discuss that are causing worries amongst traders on the foreign exchange market.

There are fears that the ECB's tactics may not be enough to boost the Eurozone economy, and that there is too little, too late in the approach of the Bank. The British Pound hit a four-month high against the US dollar yesterday before retreating again. It also gained against the Euro. This kind of trend is being seen as evidence of traders' increased concerns.

Jean-Claude Trichet, the ECB boss, has mentioned "non-conventional" methods and policies to be discussed for adoption. It comes later than UK and US central banks who have already introduced drastic measures to boost economies.

Euro Weakens as ECB Speculation Mounts

The UK has recently always been predicted to be the country which would suffer the longest through this recession.

This has not improved much in the European Commission's latest report, which has revised the outlook for most of Europe. Most of Europe looks set for decline and in fact Britain is now set to lose around 4 to 4.5 per cent this year - an increase on Alistair Darling's Budget prediction of 3.5 per cent. However, it is Germany who are set to see the biggest decline in 2009 - 5.5 per cent. This decline is the worst in Europe.

The European Central Bank are set to meet later this week to decide on the new interest rate - most are speculating that it will be dropped by 25 base points to 1 per cent. Other measures are set to be introduced in an effort to push the EU economy into more action, and this kind of speculation has had its effect on the foreign exchange market. The euro fell against 13 of the 16 most-traded currencies, including the US dollar and the yen. The outlook for the euro remains weak.

Metals and Indices Report Strong April

Copper as a commodity to trade has come to the forefront in light of gains in the last month. It rose to $4,459 a ton on the London Metal Exchange –an increase by 0.6 per cent. This data could make or break contract position on the metal. Other metals also saw increases.

The world’s largest importer of copper is China, and demand of the metal has increased there too since their fiscal stimulus programme has been put into place in March. Imports rose by 10 per cent to 296,843 tonnes.

Overall, it seems as though there is an increase in confidence on the markets as newsfeeds keep their hopeful outlook for the world economy, and China's success in light of fiscal boost also has an effect on world performance.

The FTSE 100 had its best monthly performance in six years this April. It closed at 4,243.71, an increase of over 20 per cent. The FTSE 250 also had a strong performance – it gained over 18 per cent, making it the best month on record.

Krone Sees Gains

> It's the safe haven currency du jour: the Norway krone. Up to recently, it was always the good old Swiss Franc which was relied on for its strength, as were the yen and the US dollar. Lately, they have all lost their safe status for those who want less risk. Now, it is the krone which is taking the spotlight.

Yesterday, the Norway krone gained 0.8 per cent against the euro to 8.7075, and 1.7 per cent against the dollar, to 6.5642. It was the second consecutive day that it gained strength. The price of a barrel of oil also increased by 2 per cent. Oil is Norway's main export so it stands to reason there is a constant correlation between the krone and oil.


Some currency traders see the krone as the best of a bad lot, but others are seeing it as a good place to focus, given the country's high current account surplus and an economy forecast that is much less gloomy than other European countries have seen of late.

Market Confidence on Increase

Cancel the stockpiling and relax - according to the World Health Organization, thinks aren't as bad as they thought. Apparently the swine flu virus can be contained after all, and there's much less reason to be afraid.

Currency markets are reflecting this in that the US dollar and the yen have weakened the second day in a row against the euro and 14 of the 16 most-traded currencies.

The Bank of Korea has also released figures showing that their current account surplus has increased since February. Asian stocks have gained and New Zealand exports are up too.

So perhaps market confidence is on the up after all?

US Futures Affected by Pig Flu

Predictions that travel and hotel shares would be down have come true as shareholders continued to bet that these would take the first hit out of the pig flu, which is taking an increasing amount of victims in Mexico.

Corn and soy futures took their biggest one-day decline in the USA, and meat products are likely to take a hit too: pork products have been banned from Mexico to Russia and China, with Indonesia set to followPredictions that travel and hotel shares would be down have come true as shareholders continued to bet that these would take the first hit out of the pig flu, which is taking an increasing amount of victims in Mexico.

Corn and soy futures took their biggest one-day decline in the USA, and meat products are likely to take a hit too: pork products have been banned from Mexico to Russia and China, with Indonesia set to follow.


The Nikkei closed 1.7% on Monday's trading and the Hong Kong Hang Seng was down 1.4%. Over here, the FTSE 100 index was also down 1.4% in today's early trading.

Pound Reacts to Budget

The UK Budget speech, which took place yesterday (Wednesday 22nd), brought with it much anticipation and was slammed by critics and opposition leaders.

According to many, the Chancellor's predictions for the UK economy - growth to reach 3.5% by 2011 - were far too positive and some even labelled it as "fantasy".

After the speech came the IMF announcements for the world economy, and their forecast for the UK was markedly different to Mr Darling's. According to them, the economy is in fact going to contract to a total of 4.1% in 2009 alone.

Alistair Darling's speech (and possibly also the IMF's) had an effect on the currency market, and added to weakening of the British pound. At 10:30 am New York time, the pound was trading at $1.4539 and 89.62p to the euro.

Interest Rates up by 31 per cent on RBS cards

If you have any issues with your credit card features, you might want to start shopping around for a better deal....especially if your card is provided under the umbrella of the RBS Group.

Why? Because they have raised the interest rates on a series of credit card by a huge 31 per cent, to 16.9 per cent.

Consumer watchdogs (and card customers) have reacted with outrage - and who would blame them - but RBS Group are not the only providers who have made changes. Around 28 providers have changed aspects such as the balance transfer and interest free periods on their cards.

RBS Group have said that any customers who have issues should raise them with the bank directly, and that they would deal with them as best they can.

But the question remains: why, after a summit meeting with the Government but one year ago, where banks promised to take a more sensitive approach to customers, are they now making such changes?

To keep up with the competition is the official answer...

Tesco Sees Increased Profits

The weakening British pound has had a negative effect on supermarket giant Tesco - import costs have meant an increase in prices and therefore a harder battle to keep prices down for the consumer.

But in an effort to balance the situation, and to protect margins, Tesco has in place hedging - this means currency movements and fluctuations are insured against.

A wise move, and one of many which has seen Tesco do well - pre-tax underlying profits of £3bn were announced today.

While the food and drink side of the business has had its best sales figures, the non-food products are being worked on in order to increase them. For example, the banking area is set to see a new current account in the next two years. This will join other products such as credit cards, loans and savings accounts.

G20 Leaders Gather in London

Gordon Brown is a focus of the G20 summit, as it has been many of his decisions and leadership that have come under the negative spotlight in the crisis. But will his attempt to call for a global approach aid his battered image? Some doubt that he will be able to recover his reputation and be taken seriously as an economic leader.

Levels of security are tight and a £7.5m security plan in place. City workers have been ordered to dress down and avoid wearing suits, to avoid becoming targets from protesters and campaigners, who have been spreading slogans such as "Hang a Banker".

This is US President Barack Obama's first trip to Europe since taking office, and many across the world have pinned hopes on him that he can bring together leaders to reach a new global initiative. But he'll be in for a tough ride as the summit has already been fraught with issues amongst leaders. France has already threatened a walkout if tighter regulations are not agreed on.

So while the leaders meet behind closed doors, is it not the City workers- the admin in currency markets, the overseas mortgage broker, the secretary at the bank -
who bear the brunt? Are they really to blame for what has happened on a global scale?