Germany’s governing coalition lost in yesterday’s election in Baden-Wuerttemberg, its worst result since 1952. The two coalition partners took 44.3% of the vote, while the opposition Greens took a record 24.2%, and are now looking to form a government with the Social Democrats who won 23.1%.
THE US has stated that it will cut its role in Libya in the next week, and will join other nations in discussing political strategies to end Qaddafi’s rule during an international conference in London tomorrow. Meanwhile, Libya’s rebel army recaptured a series of towns as government forces pulled back under pressure from Western air strikes.
PORTUGAL’S interim Prime Minister Jose Socrates has been voted back as leader of his Socialist Party after resigning when parliament voted down his austerity budget. He won 93% of the votes and will lead the party into an election in two month’s time. THE NIKKEI slipped today after weekend reports of soaring radiation levels at the damaged nuclear plant added to the investors’ concerns about disrupted supply chains and power cuts.
EUROPEAN markets are set to dip today as traders focus on the continuing Middle East turmoil, and as they take stock following last week’s recovery rally when European shares made their largest weekly gain in six months.
CURRENCIES:
THE YEN fell against the dollar and the euro on speculation that reports this week will show consumer spending increased in the US and France, indicating global economic recovery and reducing demand for the yen as a refuge.
THE EURO fell against most currencies as Merkel’s coalition lost out in the German elections.
THE DOLLAR Index gained for a second day on speculation that the Fed will signal today that the US central bank may withdraw from the second round of Quantitative Easing because of strong economic data.
ENERGY:
OIL FELL for a third day in New York as concern that Japan’s ongoing nuclear crisis is delaying rebuilding efforts and European nations’ debt may cut demand, overshadowed turmoil in Libya and the Middle East. Futures slipped as much as 0.4% as EU leaders reduced the amount committed to an emergency support system for the Eurozone.
COMMODITIES:
GOLD declined overnight as signs that the global recovery is back on track reduced the appeal of the safe-haven metal. Silver, platinum and palladium also fell.
THE RALLY that drove cotton prices to the highest since America was recovering from the Civil War is ending as farmers from Texas to New South Wales plant record crops and replenish stockpiles for the first time since 2007.
