Tag Archives: environment
Upbeat economic data lifts world shares
Upbeat economic data lifts world shares (Reuters) / 5 September 2013 European government bond yields were at near 1-1/2 year highs on Thursday and the dollar clung close to six week peaks on a combination of a better global economic outlook, nervousness about Syria and pending central bank meetings. Russia and China, meanwhile, both warned the US ahead of the G23 meeting in St Petersburg that the end of the Federal Reserve’s bond-buying programme could have a profound impact on the global economy. The European Central Bank and Bank of England were both expected to leave interest rates unchanged, but investors were looking for statements reiterating pledges to keep rates low given recent stronger economic data. ECB President Mario Draghi “is going to want talk down the prospects of recovery a little bit and get people’s feet on the ground” said Will Hobbs, head of equities strategy at Barclays Wealth. European money market rates have been moving higher recently in response to stronger economic data and on expectations the Federal Reserve is set to begin unwinding its stimulus, possibly as soon as later this month. Analysts see little options for the bank other than just maintaining a soft tone in communication, sending German 10-year bond yields have raised to 1-1/2 year highs of 1.981 percent. Earlier the Bank of Japan voted unanimously to maintain its monetary stimulus, while declaring the world’s third-largest economy was on a recovery path, sending the yen briefly above 100 to the dollar, a six week low. In the emerging markets India’s new RBI began his tenure in spectacular fashion by unveiling measures to support the currency and the banking sector that sent the Nifty up 3.3 percent and boosting the rupee. The rupee rose to as high as 65.53 per US dollar, pulling well away from a record low around 68.85 set last week. The gain in Indian stocks and a slight rise in Tokyo’s shares after the BOJ decision helped lifted Asia equity prices by 0.6 percent, to near a three week high. European share markets were up 0.5 percent in early trade, gaining ground for the second day in a row and hitting its highest level since August 27. “People are waiting for cues from the central banks, and there is just no real trend on the market at the moment,” said Guillaume Dumans, co-head of research firm 2Bremans. The euro last traded at $1.3185, down slightly against the stronger dollar and not far from a six-week low of $1.3138. MSCI world equity index was up 0.1 percent following a second day of gains on Wall Street spurred by another set of upbeat USdata, which included the strongest monthly rise in car sales during August since October 2007. “Strong car sales in the US again lifted market confidence in the economy, and lifted expectations that the US Federal Reserve will start cutting back its stimulus this month,” said Isao Kubo, an equity strategist at Nissay Asset Management. Syria Action Markets remained cautious about Syria as a possible US military strike moved one step closer after a Senate committee voted in favour of action, clearing the way for a vote in the full Senate, likely next week. The possible military strike against Syria in reaction to its alleged use of chemical weapons and the Fed’s decision to reduce its stimulus were expected to dominate discussions at a meeting of leaders from the Group of 20 developed and developing economies in St Petersburg. In a note prepared for the meeting the IMF warned that emerging countries were particularly vulnerable to a tightening of US monetary policy. It urged strengthened global action to revitalise growth and better manage risks, adding some downside risks have become more prominent. US President Barack Obama meanwhile was expected to use the meeting to win international backing for a military strike against Syria and this was keeping a floor under oil markets Brent crude rose 56 cents to $115.47, while US oil was up 64 cents to $107.97. Continue reading
Indian rupee, stocks jump on new bank chief’s plans
Indian rupee, stocks jump on new bank chief’s plans (AFP) / 5 September 2013 India’s rupee strengthened and stocks jumped on Thursday after new central bank governor Raghuram Rajan outlined a reform plan aimed at boosting investor confidence and stabilising the ailing currency. Raghuram Rajan, second left, the newly appointed governor of Reserve Bank of India, is received by its Deputy Governor Kamalesh Chandra Chakrabarty, second right, and others as he arrives at the RBI headquarters in Mumbai, India. AP The rupee climbed to 65.75 against the dollar, gaining nearly two percent from its previous close, on investor hopes the worst could be over for the currency, the worst performing in Asia this year. Indian shares jumped as much as 2.96 percent at the open, led by banking stocks, after Rajan took over Wednesday from Duvvuri Subbarao as head of the Reserve Bank of India (RBI). In the afternoon stocks were up 1.51 percent. Rajan sought to reassure rattled markets with his first speech in the post, outlining a fresh approach to the currency crisis and warning that he may have to take unpopular steps to get Asia’s third largest economy back on track. Sonal Varma, an economist at Nomura Securities, said Rajan had made “an impressive start” but she stressed that a weak growth outlook was still a “major concern”. “In our view, amid the current gloom, the new RBI governor has infused a sense of optimism that he is in charge and that the RBI under him will unleash more financial sector reforms, a medium-term positive for the economy,” she said. Rajan, a former IMF chief economist, emphasised the importance of transparency and consistency in the bank’s actions, after the RBI spent weeks trying to stabilise the rupee with a range of measures. He stressed he would hew to the RBI’s mandate of “securing monetary stability” and sustaining confidence in the value of the country’s money. “This means low and stable expectations of inflation, whether that inflation stems from domestic sources or from changes in the value of the currency, from supply constraints or demand pressures,” he said. India faces its worst financial crisis in decades, as the once-booming economy grapples with sharply slowing growth, high inflation and a record current account deficit. Some analysts fear the economy could be heading for a meltdown with the rupee down around 22 percent against the dollar this year. Rajan’s bold entry to the job, which included financial deregulatory measures such as opening up the country’s banking sector, received rave reviews from economists and the local media. “This was easily the most substantive speech by a Reserve Bank governor on his first day in office,” financial daily Business Standard said on Thursday. With a mock photograph of Rajan in a James Bond-style pose on its front page, The Economic Times newspaper said he had “gotten off to a good start, radiating brisk purpose and optimism”. Rajan, famed for forecasting the 2008 global financial crisis, left his post as a professor at the prestigious University of Chicago’s Booth School of Business and returned to India last year before taking up the new job. Continue reading
Obama should strike Syria, says diplomat
Obama should strike Syria, says diplomat Sarah Young and Patrick Michael (Interview) / 4 September 2013 TWO FLIP FLOPS in as many days, one on each side of the Atlantic, demonstrate both the complexity and divisiveness of the Syrian situation, but one former ambassador in the region is admant a US show of force will – and should – take place. Last Thursday, the House of Commons voted down the UK Government’s plan to join the US in launching air strikes against Syrian targets as punishment for using chemical weapons. And then, on Friday night, President Obama changed his mind on launching air strikes without clear Congressional approval. For Obama this is an extraordinary climbdown. All indications were that an attack was imminent. Several cruise missile-equipped US destroyers were deployed to the Eastern Mediterranean just off the Syrian coast. Secretary of State John Kerry, who had earlier confidently laid out the case for an attack, seemed to dither through the Sunday morning US talk shows as he groped to explain what had happened. However, in an exclusive interview with Khaleej Times , Adam Ereli, former US ambassador to Bahrain from 2007-2011, said he still expected force would be used – and he did not believe UN approval was needed, despite the fact international law states one state may not unilaterally attack another state except in self-defence, even when that state violates the 1925 Geneva protocol prohibiting the use of chemical weapons. “I expect the United States will take action — perhaps not as soon as some would like, but force will be used,” Ereli said. “The use of chemical weapons by the Syrian regime against its own people demands a military response. The United States cannot let this atrocity go unpunished. To do so would embolden the enemies of peace in the region.” A punitive strike was justified given Syria had violated the Chemical Weapons Convention, he said, citing similar past action from the international community against Slobodan Milosevic in Bosnia and Kosovo as an example. In fact, if the international community had responded forcefully “the first time” these weapons were used, he did not think the August 21 attacks would have taken place, Ereli added. “If we do not punish Assad now, he will use chemical weapons again. Also, this is not just about Syria. Iran is supporting the Assad regime. They are providing it money and weapons and fighters. If ruthless dictators are allowed to use chemical weapons without consequences, the whole region is in danger. The risks of doing nothing are far greater than the risks of taking action.” He said the results of the UN report justified a response – given “UN inspectors were able to get hair, soil and other physical samples that prove beyond a shadow of a doubt… the Syrian army used sarin gas to kill innocent women and children.” “Assad is like a school-yard bully. He beats up kids who are weaker than him. It’s time we give him a bloody nose, and he’ll back off.” President Obama said on August 31 he would seek Congressional approval for military action, following concern from both liberal Democrats and conservative Republicans that any strikes without this would violate the Constitution. However, the Guardian reported yesterday [Monday] Kerry maintaining the US had the right to strike with or without this approval, despite refusing to give details on where America was sourcing its evidence of the use of sarin gas from, other than saying it did not come from the UN. Ereli agreed, saying Obama should “strike Syria anyway”. “A limited strike, which means launching cruise missiles against Syrian military targets [including military and army bases, intelligence headquarters, and defense ministries], does not put US forces at risk. It is not expensive and will send a strong message to Assad and his supporters in Moscow and Tehran that they don’t have a free hand in Syria.” America’s “friends in the region” should be able to count on the United States to take action and protect them, unlike Russia, China and Iran who “want(ed) to protect their investments in Syria”, he said. Ereli said he “did not expect” US forces to “strike chemical weapons depots or other targets that could cause widespread civilian casualties”, and any rise in oil prices or hits to economies would be “temporary”. Diplomatic talks were no longer an option “given all efforts to negotiate a political transition had failed”, however that did not mean giving up on a negotiated solution in the long-term. A no-fly zone, which could restrict the delivery of Weapons of Mass Destruction (WMD), also did not make sense, given most attacks on civilians had come from ground forces, Syrian air power was not a “big factor”, and the American people did not want to see US forces deployed, he added. However, he admitted that the question of ‘what happens next’ remained a tricky one. “We learned in Iraq that removing Saddam Hussein was necessary but not sufficient. While Iraq is definitely better off now than it was before 2003, we must be careful not to repeat the mistakes of the past.” Finding a successor and preventing the kind of sectarian violence “sure to follow” would require a level of international coordination and cooperation that had not been seen to date, he said. sarah@khaleejtimes. com patrick@khaleejtimes.com Continue reading
