Financial Market

Figures released recently confirm the country is officially in recession, and it seems that saving the odd penny or two is a topic firmly on people’s minds. I suit of this Financial Market is giving you a quick and dirty run down of some top deals that are currently available, meaning you won’t have to cut every luxury in your life out just yet.

With April now here it maybe time to reward yourself for tightening up those purse strings in the new year, and if you don’t have to spend a great deal in doing so, you can continue the saving well into February too.

There are only a few days left on this 2 for 1 offer at Las Iguanas you have until Sunday Night to take advantage. Also not mentioned with this offer on many forums is the fact they are currently running 2 for 1 on all cocktails too, saving even more pennies should you wish to indulge even further.

Therefore leave you bottle at home on the shelf for this price and take advantage while you can.

Direct link to coupon: Coupon

More Info (PDF)

As the housing market is being particularly hard hit the new trend for home owners finding themselves in negative equity is to stay put. Waiting for the housing market to recover in the future, (which it undoubtedly will at some point) means that you could be staying put for a good few years.

With news of this redecorating a home is the best way to give you that change that is needed, whilst remaining financially sound. To this end there are copious amounts of deals around the home furniture sector, one of the hardest hit in the current financial climate.

Looking round for an online promotion is not difficult, as is finding reviews of the various retailers. To this end Hot UK Deals, MSE and Sick Deals are all good resources, and be sure to check out voucher codes sites for further savings.

There has never been a better time to get that new bedroom furniture the other half has been nagging you for.

Lastly on our must have January deals round up is a treat for the children. With ‘pocket money’ toys expected to make it big in 2009, it seems that even the little ones will have to cut back on the amount they are spending. To that end why not treat them with a free trip to the cinema.

The following companies all offer large amounts of free tickets to publicise films prior to their official release. It is simple ho wit works, when preview screenings become available, you’ll receive a code in an email which you can use to redeem tickets on the relevant website.

Sign up at the following agencies.

* SeeFilmFirst.
* The Film Factory.
* Momentum

There you have it, treat you partner to a meal, your home to a furniture face lift, and children to a free night out without bursting the bank balance in Jan 2009.

With such a long break we thought it apt to return with big news. It is no surprise to anyone how bleak times are looking in the financial world right now, but today is the day that we officially recognise Britain as a country in recession.

The report released this morning has confirmed what many have believed for the last 6 months. Official Government figures have confirmed the UK is now in recession for the first time since 1991.

GDP fell by 1.5% in the last three months of 2008 after a 6% drop in Q3. This falls in line with the widely accepted definition for recession, tow consecutive quarters of falling economic growth.

Not only is the UK officially in recession but the figure released represent the biggest quarter on quarter decline since 1980, and 1.8% fall on Q4 in 2007.

On the back of the released report the pound continued to fall against the Dollar, now at a 24 year low at $1.36 Dollars to the pound.

Within the report it was highlighted that the UK’s manufacturing sector showed the biggest retraction, counteracting by 4.6% after falling 1.6% in Q3.

Unemployment is also up with nearly 2 million people currently out of work. On top of this the housing market remains severely depressed with retail figure also bleak.

“It is difficult to see why things should improve in the foreseeable future,” - Andrew Smith, chief economist at KPMG.

Bleak news indeed for the British economy, but at Financial Market we are here to help keep you up top date with the latest financial news.

Apologies for the delay to all who regularly read www.financial-market.org. Looks like we are back on track now and will be reposting again soon. Stay tuned for lots of interesting stories coming up!

The price of crude oil today reached a new high as the black gold hit the $142 a barrel mark, after concerns entered the market that oil producing nations could not meet the demand of the market.

On the London exchange Brent crude hit $142.13 a barrel and in New York light crude climbed to $142.26.

The cartel of oil producing nations OPEC has found itself under increasing pressure to raise production quotas which would ease concern and help bring prices below current levels, however the cartel seems to be split as to the whether it should raise output.

Saudi Arabia recently invited senior members from oil producing countries to discuss what to do about oil. It seems the case that many OPEC members, and senior figures in other oil producing nations, still have clear memories of the crash in oil prices a decade ago after the Asian financial crisis which lead to oil plummeting to $10.

It is these memories know as the “ghost of Jakarta” that apparently explains the reluctance of OPEC members to increase output in order to artificially lower prices.

Raising further concerns within the industry, Libya has recently threatened to cut production saying that the market is well supplied. This statement is thought to be in response to threats from the US against oil producing nations.

In the US the House of Representatives recently passed a bill allowing the Justice Department to sue OPEC members for restricting supplies and setting prices. The bill has not been voted on by the senate and the white house has already threatened to veto the bill.

Oil prices have continually been pushed higher recently by the combination of a weak dollar and concerns about volatile geopolitical situations that could disrupt supply.

Many analysts are now predicting the upward trend to continue, with Tom Pawlicki, an analyst with MF Global in Chicago stating:

“I think the up trend is going to continue, we could move up toward $150 over the next few weeks.”

In similar fashion to what is expected of the Bank of England tomorrow, the European Central Bank is expected to hold interest rates at 4% showing a reluctance to cut rates amid high fuel and food prices pushed inflation to 3.6% in March.

Possible rate cuts later this year are possible as the Euro economy continues to slow.

The ECB has held interest rates at 4% since the credit crunch began, a move that contrasts with that of the FED who have slashed interest rates from 5.25% to 2% since summer 2007.

As a result of ECB moves the Euro is at a record high against the Greenback making Euro exports expensive.

As fears of inflation throughout the EuroZone are quelled the ECB is expected to cut interest rates, and as consumer confidence returns to US markets the Greenback is expected to start to peg back the Dollar.

Other metals continued to weaken today following the trading trends showed with Gold in yesterday’s trading after the dollar continued to strengthen.

Copper most notably fell in line with other commodities in early trading after interest in base metals continued to curb amid optimised that the worst of the credit crisis was over.

With the dollar’s resurgence making dollar price commodities are made more expensive to potential investors with other currencies therefore reducing there appeal.

‘Going forward it does look as though the course of the dollar is going to be all-important for most of the metals,’ - RBC Capital Markets analysts.

After the FED .25% rate cut temporarily halted the dollars resurgence, it returned in European trading after the market concluded that the US had in fact turned the corner on the credit crunch after higher than expected consumer spending data was released.

Although demand for metal commodities is falling with the resurgence of the greenback, copper prices are yet to see a dramatic slide after industrial action in Chile, the world’s largest producer, had dented supply.

At the same time LME-monitored copper stocks have declined 450 tonnes to 110,075 tonnes.

This week Gold slumped to a three month low to $850 an ounce after the US dollar continued to show further signs of recovery against the Euro after increasing optimism that the worst of the global credit crisis is over.

The yellow mental that has seen record highs in recent months has slumped by $25 since reaching $881.65 overnight. This overnight high was brought as a result of a temporary stalling of the dollars resurgence after the FED made a further interest rate cut.

Since the FEDs rate cut the US economy has been filled with an air of cautious optimism that the worst of the financial crisis has been weathered, helping push the dollar upwards. As a result the price of gold has seen a steady decline as its appeal to an alternative to the greenback has been diminished.

“The pace of decline, suggests gold will remain at risk to further corrections in the coming sessions, potentially testing below the psychological $850 an ounce mark before finding sufficient demand from bargain hunters and the physical sector.” - James Moore at TheBullionDesk.com

Although many had predicted a .25% rate cut by the FED to 2.0%, many were surprised by statements suggesting that further cuts could follow, weakening the dollar. US interest rates have now fallen from 5.25% since September 2007.

On Thursday however core inflation was higher than expected which many expect will halt any further rate cuts planned by the FED.

The resulting rise in confidence in US markets has seen an increase in the appetite for risk, which has further pressured gold, with investors redirecting money ploughed into commodities at the start of the year back into equities. A trend much expected with gold’s reputation as a safe store for wealth in times of economic uncertainty.

Oil prices reached new highs in Tuesdays trading which saw them approach $120 a barrel for the first time.

US light, sweet crude eased to $118.11 in Asian trading, having risen as high as $119.90 due to concerns of global supply, brought on by growing violence in key oil producing nations.

London’s Brent crude peaked at $116.75 a barrel on fears of further attacks on pipelines in Nigeria, falling output in Mexico and the continued weak dollar. Together these factors have pushed oil prices up 24% this year alone.

To add to the woes the oil producing cartel OPEC has shown itself disinclined to raise quotas to curb rising prices.

“The bulls are certainly in control of the oil market right now,” said Victor Shum, from energy consultants Pervin & Gertz.

There is also the added worry of further price rises with figures due later today expected to show further declines in weekly US petrol refineries.

Recently increased disturbances in Nigeria have pushed oil prices steadily upwards. Shell has reported that continued attacks on its pipelines have lead to a fall in supply of 169,000 barrels a day.

The attacks that are being made by anti-government rebels on the regions oil infrastructures have gradually been escalating and threatening any future investment in the oil rich area of the country.

Mexico is also reporting a drop in oil exports down 8% this year. As opposed to political unrest, these shortages are being brought on by gas fields being exhausted.

The exhaustion of natural resources is a growing problem that itself is pushing oil exploration and investment into ever more hostile environments that then become susceptible to problems similar to those being seen in Nigeria.

Oil jumped above $107 a barrel today after the continued conflict in Iraq led to saboteurs blowing up one of the countries two major export pipelines. The attack came amid the third day of Iraqi military operations, targeted towards loyal fighters of the Shi’ite cleric Moqtada al-Sadr in the town of Basra in the southern Iraq.

The explosion marked the first time since 2004 that the southern Iraqi supply route has been disrupted.

“Crude exports will be greatly affected because this is one of two main pipelines transporting crude to the southern terminals, we will lose about a third of crude exported through Basra,” - Oil Company official

In last Friday’s trading a commodities sell off saw oil take a sharp fall to below $100 a barrel, after record highs of $111.80 seen last earlier in the week, but todays rise is a further extension on the $4 gains made yesterday after a report showed lower than expected petrol stocks in the US.

US crude was up 43 cents to $106.33 this afternoon, after peaking at $107.70 earlier in the day. Any gains that were to come on the back of increasing conflict in Iraq were limited by a strengthening dollar which also showed gains after the FED eased recession worries.

The dollar gains were also backed by figures released which showed US jobless benefit claims fell by 9,000, with the greenback managing to regain some lost ground. In early trading it saw a rise of 0.6% to %1.5757 against the euro and a rise of 0.9% against the Yen.

Monday saw heavy losses to European stocks triggered by continued global gloom, but in early trading today showed signs of recovery after a positive session for Asian stocks. The FTSE 100 index was up 2%, the Dax up 1.8%, and the Cac 40 in Paris up 1.9% in early trading this Tuesday morning.

Asian markets also closed predominantly higher with the Nikkei closing 1.5% up, the Hang Seng up 1.4% and the Sensex in Mumbai up 2.0%. Shanghai’s main index did however fall 4% amid fears that Beijing will take action to slow her economy.

Mondays trading marked a wild session which many believe is a culmination of the several events that have rocked investor’s confidence in the past week. The collapse of respected US investment firm Bear Stearns, with its subsequent sale to another Wall Street player JPMorgan Chase at the rock bottom price of $2 a share, followed by emergency liquidity actions undertaken by the Federal Reserve on a Sunday night, and a continued confidence crisis in worldwide credit markets, together led to major European markets recording huge losses in Mondays trading.

The US stock market however didn’t record such losses thanks to bargain hunters taking advantage of the price tumbles, particularly in blue chip and technology sectors.

Shares in Bear Shares had fallen 84% on Monday to $4.31 whilst those of JPMorgan increased by 10% to $40.31.

“The Fed is treating Bear as if it were a large failed bank,” - S&P Economics.

As a result of the collapse many are predicted a prolonged global financial crisis, branching wider and deeper than previously predicted, marking a stark shift in opinion that could magnify any potential effects on world wide economies.

The action made by the FED on Sunday marked its first weekend move in nearly 30 years, making a quarter point cut and announcing it will lend to the twenty primary dealers that buy Treasury securities directly from it, a move not used since the Great Depression.

Largely responsible for the cut price sale of Bear Stearns, the FED will also finance the deal by providing up to $30 billion to JPMorgan.

Many are also awaiting further news today from the Fed, as they are widely expected to cut its benchmark interest rate by a full percentage point to 2.0% as it battles to restore confidence and boost the economy. With continued point cuts like this it could very much be the case that we will see the dollar as a free currency, the first currency to do so since the yen.