Gaddafi has vowed to fight on, despite enduring a fourth night of air strikes, saying he is “ready for battle, be it long or short”. Libya, a member of OPEC, has already reduced its oil production by an estimated 75%, and the ongoing conflict is likely to see further cuts.
UNREST in the Middle East continues, and the UN human rights office yesterday voiced their concerns about the excessive use of force against protestors in Yemen, Bahrain and Syria. The Egyptian stock market, which reopens today after seven weeks, is expected to fall sharply.
UK PUBLIC borrowing recorded its worst February ever, and inflation surged to a 28-month high, the Office for National Statistics revealed yesterday. Consumer price inflation rose to 4.4% and retail price inflation rose to 5.5%, with both figures exceeding economists’ forecasts by some margin.
UK FACTORY orders growth picked up more than expected in March, with the Confederation of British Industry’s survey showing a total order book balance of +5 from -8 in February, and well ahead of the expected -6.
A VOTE on the Portuguese minority government’s austerity package is expected today, with the main opposition party not expected to back the measures, putting pressure on Prime Minister José Sócrates to resign.
RISING tensions in the Middle East and high oil prices ended a three-day rally in the UK, Europe and the US.
JAPANESE shares fell overnight, after the previous session’s surge of 4%, as investors were confronted by the escalating costs of the March 11 disaster. Chinese shares edged up with steady gains from the banking and property sectors. Hong Kong’s Hang Seng started the session weak, and is expected to close slightly down.
European shares are set to fall for the second straight session today, tracking weakness on Wall Street and Asia, on heightened nervousness over political unrest in the Middle East and on caution ahead of a key parliamentary vote in Portugal.
STERLING extended gains yesterday, hitting a fresh 14-month high against a broadly weaker dollar after stronger-than-expected UK inflation prompted investors to bring forward rate hike expectations.
ESCALATING unrest in Syria and Yemen, and the ongoing turmoil in Libya, helped push oil prices back up to almost $116 a barrel yesterday.
INSTITUTIONAL investors surveyed by Barclays Capital, said that the looming slowdown in China is the biggest factor that would push down commodity prices. The survey also revealed that investors feel that gold will perform less well than they had predicted at year end 2010, and that crude oil will be the best perming commodity this year, followed by grains, which have surged on tight global supplies of corn and soya beans.