The failure of emerging markets nations to rally behind a single candidate to head the International Monetary Fund shows the effort still needed to link diplomatic might with growing economic strength. As the IMF begins its search for a successor to Dominique Strauss-Kahn, India, China, Brazil and South Africa are yet to throw their support behind anyone even as they urge selection to be driven by merit rather than nationality. European nations have given overwhelming support to French Finance Minister Christine Lagarde to head the IMF.
BOE Chief Economist Spencer Dale said that monetary policy makers should boost interest rates to control inflation, even if Britain’s economic recovery isn’t guaranteed. Inflation accelerated to 4.5% in April, the fastest since 2008, forcing BOE governor Mervyn King to explain why officials have yet to raise borrowing costs from a record low of 0.5%.
MARKETS:
EUROPEAN shares are set to slip this morning, with the bearish sentiments continuing after a late sell off on Friday and weakness in the U.S. and Asian markets, as persistent concerns over the euro zone debt crisis crimped investors’ appetite for riskier assets.
The FTSE 100 is set open 41- 46 points lower; Germany’s DAX seen down by 1.1% and France’s CAC expected to slip 46 to 51 points according to financial spread betters.
Jitters over Greece’s finances intensified after Fitch downgraded the country’s debt ratings by 3 notches to B+ late on Friday, adding that the country would need new aid beyond 2013.
CURRENCIES:
THE EURO touched a record low against the Swiss franc as concern over Europe’s sovereign debt crisis deepened, reducing the appeal of the regions assets. The 17 nation currency reached the lowest in a week against the dollar after Spain’s Socialist party suffered its worst electoral defeat in more than 30 years and Standard and Poor’s said on the 20th May that it may lower Italy’s credit rating.
ENERGY:
THE BIGGEST drop in prices of Uranium in two years may be ending as China and India plan atomic power developments that will more than double global production even after Japan’s nuclear disaster. The radioactive metal has slumped 8.7% this year, the most since 2009, after tumbling as much as 27% as governments reviewed nuclear plants following the Japanese crisis in March. China and India will lead in a 46% increase in consumption by the worlds 5 biggest atomic-power developers by 2020, according to data compiled by Bloomberg.
COMMODITIES:
OIL declined in New York as signs of a slowing economy in the U.S and concern Greece will default on its debt stoked speculation that fuel demand may falter. Futures slid as much as 1.5% this morning after hedge funds cut bullish bets on oil to a 3 month low. Crude for July delivery lost as much as $1.49 to $98.61 a barrel on the New York Mercantile Exchange.
