THE UN Security Council has passed a resolution to intervene in the Libyan crisis, allowing international and Arab League forces to take direct military action to protect Libyan civilians under threat. Qaddafi called the ruling “craziness, madness, arrogance” but pro-democracy protesters sounded horns and set off fireworks on hearing the news.
FOLLOWING an emergency meeting of the G7 nations, major central banks agreed to take action to drive the yen lower after it surged to a new record against the dollar, fuelling fears that Japan’s economy would suffer further as its goods became less competitive. The dollar spiked immediately on the news, and the Nikkei jumped 3% in the first hour of trading.
ENGINEERS raced to restore a power cable to an earthquake-damaged nuclear power plant on Friday, in the hope of restarting equipment to pump cold water on overheating fuel rods and avert a catastrophic release of radiation.
US MANUFACTURING output increased by 0.4% in February, the sixth monthly rise in a row, reinforcing the Federal Reserve’s view that recovery is now on a “firmer footing”.
MARKETS:
EUROPEAN and US stocks closed higher yesterday, which helped the FTSE All-World equity index halt its 5-day decline of 5%. Sentiment on Wall Street was helped by good manufacturing figures and another fall in weekly initial jobless claims.
MOST Asian stocks rose overnight as concern eased over nuclear radiation, and as G7 nations took rare action to drive the yen down. The Nikkei, which has lost about 10% this week, halted its downturn as sentiment improved and investors bought back some of the oversold stock.
IG Markets predict that European shares will extend gains today, with investors returning to riskier assets after the firm action taken by the G7 governments, and with stronger resolve from the UN towards Libya.
CURRENCIES:
THE YEN dropped the most in six months against the dollar as Group of Seven nations said they would jointly intervene in foreign-exchange markets for the first time in more than a decade. began the effort, sending the currency down 3.4% against the dollar, and each of the G7 members will sell yen as their markets open.
ENERGY:
OIL prices jumped on the news that the UN approved air strikes in Libya, with April deliver crude rising $2 within minutes of the vote.
TWO OIL refineries in western Japan have started boosting oil production by 30,000 barrels a day to help cope with the supply shortage in the east of the country. The refineries have also started buying oil from South Korea, and have cancelled exports.
COMMODITIES:
PRICES of commodities rose overnight as equity markets gained momentum, although tensions in the Middle East and the ongoing Japanese crisis are likely to cap gains. Analysts feel that gold prices will hold firm during these uncertain economic times.
