Leaders throughout the free world welcomed the news yesterday that US Navy Seals had found and killed Osama bin Laden. As the body of the world’s most-wanted man was buried at sea, most agreed that a major blow has been dealt to terrorist organisations around the world. The Taliban immediately threatened retaliation, saying that Pakistan and America are now top targets. Hamas also condemned the killing as an example of American oppression of Islam.
AMERICA’S economic recovery looks set to be propped up by its manufacturing sector, after 21 straight months of growth were recorded to April. The Institute for Supply Management said yesterday that its index of US factory activity fell slightly from 61.2 in March, yet still indicated strong growth with a reading of 60.4 in April. All readings above 50 reflect expansion.
GREECE is seeking another extension in the terms of its bailout loans so as to avoid a full-scale restructuring of its public debt. Finance minister George Papaconstantinou promised to�crack down on tax evasion, in return for lengthening the maturity of Athens 110bn, seven-year rescue fund.
MARKETS:
US STOCKS surged on opening yesterday as news of Osama bin Laden’s death encouraged investors. Warnings of anti-American violence, later in the day, saw gains reversed and finished almost flat.
THE MSCI Asia Pacific Excluding Japan Index of shares dropped 1% overnight, led by raw-material producers as commodity prices dropped. Financial markets in Japan were shut for a holiday.
European shares are expected to open broadly lower on Tuesday, mirroring weaker Asian stocks, with a fall in commodity prices seen putting pressure on the market, although Britain’s FTSE 100 is likely to gain slightly.
CURRENCIES:
The yen and dollar rose against most of their major counterparts overnight. The yen typically strengthens in times of political, financial and economic turmoil. Japan’s trade surplus makes the currency attractive because it means the nation doesn’t have to rely on overseas lenders. The dollar benefits as the world’s main reserve currency.
ENERGY:
OIL for June delivery decreased as much as 0.7% to $112.75 a barrel in electronic trading in New York, extending its decline for a second day, on signs U.S. economic growth may moderate and as volatility increased on concern the killing of bin Laden may lead to retaliatory attacks.
COMMODITIES:
VOLATILITY hit the commodity markets yesterday, with gold dropping $5 an ounce, and silver shedding 11% immediately following bin Laden’s death. Both recovered during the day, but analysts consider the commodity markets anything but settled as Al-Qaeda consider their response to their leader’s death.
