MARKETS rose on hopes of more quantitative easing (QE) yesterday after
US Fed chairman Ben Bernanke said the recovery may need more support.
The central banker hinted at more money printing, arguing more action
should be taken to push boost jobs. “Despite the recent improvement, the
job market remains far from normal,” he said. “Further significant
improvements in the unemployment rate will likely require a more rapid
expansion of production and demand from consumers and businesses,
which can be supported by continued accommodative policies.”
FORMER IMF chief Dominique Strauss-Kahn was placed under formal
investigation yesterday by authorities looking into a suspected prostitution
ring in the French city of Lille, his lawyer said, following a day of questioning
by judges in a closed courtroom. The investigation on suspicion of
complicity in a pimping operation is the latest judicial headache for the
Socialist former-finance minister. The move could lead to a trial but it falls
short of charging him.
THE BANK OF ENGLAND said investors remain concerned about the euroarea
outlook even after measures by policy makers helped reduced some
tensions in markets. “Concerns about the indebtedness and
competitiveness of some euro-area countries persisted and remained a key
influence on financial markets,” Chief Economist Spencer Dale wrote in the
bank’s Quarterly Bulletin, published in London today. Still, in the three
months to the 9th of March, “financial-market sentiment improved
considerably over this period amid a range of actions by policy makers, both in the U.K and abroad.”
MARKETS:
ASIAN STOCKS rallied this morning as investors were heartened by hopes that the Federal Reserve remains prepared to
provide further liquidity to support the US economy. The MSCI Asia Pacific index jumped 1.3% as lingering concerns about
global growth prospects were counteracted by comments on the U.S. job market from Fed Chairman Ben Bernanke.
IN OVERNIGHT TRADING, Wall Street’s S&P 500 closed 1.4% higher at 1,416, its best level since May 2008, while the dollar
index, which had been higher earlier in the session, traded 0.6% lower as investors priced in the chances of yet more Fed
generosity. Europe’s FTSE Eurofirst 300 rose 0.9%. An unexpected improvement in German business sentiment in March
provided little initial propulsion, though perhaps its impact proved a slow burner. The FTSE All-World equity index rose 1.1%.
CURRENCIES:
THE DOLLAR traded 0.1% from its lowest this month against the euro amid speculation the Federal Reserve will maintain easy
monetary policy to sustain growth in the world’s biggest economy. The greenback, which has weakened against all but one of its
16 major peers this year, remained lower as comments by Federal Reserve Chairman Ben Bernanke yesterday added to signs
the central bank will embark on a third round of quantitative easing, or QE3.
ENERGY:
CHINA PETROLEUM and Chemical Corporation, Asia’s biggest refiner, will ramp up crude production and develop natural gas
fields to counter losses from selling diesel and gasoline at state-mandated prices. Sinopec, as China Petroleum is known, plans
to boost oil production in West China and increase exploration for unconventional resources including gas from shale
formations, the Beijing-based company said yesterday as fourth-quarter profit dropped 23%, missing estimates.
COMMODITIES:
RIO TINTO, the world’s third-largest miner, effectively invited bids on Tuesday for its diamonds business, on its books at $1.2
billion (752 million pounds), and joined rival BHP Billiton in backing away from a business that has lost its sparkle. Rio Tinto,
which runs three mines in Australia, Canada and Africa, said it was reviewing its diamond business and would consider selling
it, as the group focuses on expanding in more profitable commodities such as iron ore, copper and uranium.
