Archive for April 2010

Shell Enjoys Big Q1 Profits

April 28, 2010

Oil giant Shell has announced a sharp rise in first quarter profits – up by almost 50% on this time last year.  Representatives from the company said that one of the main factors to bring such healthy returns was the high price of the commodity.

Since the pit of the end of 2008, when a barrel of oil fetched jut $30, it has steadily climbed to its current average of around $75.  So far it is expected that oil will ‘remain firm’ for this year.  In March it climbed even higher to over $80 a barrel.

Demand, while still a ‘pressure’ factor, is strong from Asia where half of all world demand stems from.  China in particular is a big oil customer.

BP also announced healthy profits this week.  Both Shell and BP said that the economic outlook looks good although a cautious attitude is still adopted.

Meanwhile the Greece Problem is still dominating on the currency exchange market; the euro tumbled this morning after S & P’s slashed Greece’s credit rating to junk.

Greece Requests Emergency Bailout

April 23, 2010

Today, Greece finally agreed to the emergency bailout plan which has been gathered together by EU nations and the International Monetary Fund (IMF).

After having initially indicated that it hoped it would need to call on the package – estimated at around €60 billion – the country’s leaders have now caved in and called for the plan to be put into action.

The news came after the EU announced yesterday that the budget deficit in Greece, already at least four times higher than EU rules allow, is actually even higher than had been estimated.

The news of Greece’s acceptance sent the euro shooting up versus the US dollar as investors saw some relief.  However,  foreign exchange analysts have commented that relief is likely to stay in the short-term timeframe.

Greece has really become the neverending story for Europe – is an end the the problems now in sight

Airlines Tote up Losses over Ash

April 20, 2010

The world is going mad over ash.  The Icelandic volcano that erupted last Thursday, spewing ash kilometres high into the air, has caused travel chaos and economic fallout across the globe.

Today, some countries are to resume flights grounded since the ash cloud spread over the European continent, while other airspaces remain firmly closed.  Airports in and around London are not open today as British Airways counts the costs of the travel crisis.  So far, the company estimates losses of around 6 million pounds each day that flights are cancelled.

BA is not the only company to be affected – airlines around the world including as far afield as Singapore, Australia and Thailand are also negatively affected by the situation.

The ash cloud – deemed to be harmless to health – is now also heading across the Atlantic and towards North America.  But is it really safe to resume flights?  Many air companies believe that it is; having carried out test flights it has been shown that there is no danger to aircraft.

Passengers ranging from the ordinary to the prominent (including Barack Obama and Angela Merkel) have been dealing with endless journeys by car and coach to reach their destinations.

The currency exchange and commodities markets are watching the cloud with a wary eye…

Clegg Puts Spanner in Election Race

April 16, 2010

The pound fell broadly early this morning on the foreign exchange market.  Why?

Last night the three main political parties took part in a television debate, with Liberal Democrats leader Nick Clegg winning the majority of audiences.  While Gordon Brown (Labour) and David Cameron (Conservatives) may have been expecting an easier ride, Clegg used his moment in the spotlight to appeal to viewers and the studio audience with what he hoped was a fresh approach.

But while the Lib Dems might be enjoying their newfound popularity stakes, it does throw a spanner in the works for the outcome of the general election.  With Clegg’s new level of support, the other parties will once again be left in a very similar bracket – meaning a hung parliament is back on the cards.

Once again, investors are wary of the pound.  Once again, the election race takes a new and interesting twist.

Seven-Week High for Pound

April 15, 2010

The pound is so far having a good old week.  Having reached a high against the US dollar on Wednesday, it reached a 7-week high today after a poll showed that the opposition Conservative party have a clearer lead against the Labour party.

In the past weeks and months, a hung parliament has looked ever more likely with neither party showing signs of being a clear majority winner.  The Tories have always managed to stay slightly ahead but the level shrunk until the future of Britain’s political leader was less and less clear.  International investors have been avoiding the pound with the cloud of uncertainty hanging over the UK and it is likely that the overall shakiness will remain until the general election takes place in early May.

Britain has actually been enjoying a rather positive week in general, with a lashing of good data announced in the trade deficit and retail sectors.  Does this mean that the economy is picking up quicker than expected?  Can Britons plan their future with a Conservative government and will the budget deficit be cleaned up under their leadership?

Tonight on British television will be a live debate between party leaders – how each performs could have a significant effect on consumer, economic and fiscal sentiment.

New Confidence in UK Economy

April 14, 2010

The currency exchange market foresees a slightly stronger pound in the medium term thanks to a host of positive UK economic data.  As a result of better-than-expected trade deficit figures released this week, along with good retail sales pre-Easter, the pound rose a little on the currency market.

Against the US dollar the pound rose by 0.1% while the euro fell by 0.1% against sterling – not exactly a surge but a notable change nonetheless.

So, is there a new bout of confidence in the UK economy?  It would seem so – although as ever there is always the option to go with the optimistic view or the more cautious version.  The less enthusiastic commentators say that every bit of new data should be taken with a pinch of salt and warn against getting too excited.  After all, there is still a general election around the corner…

March Retail Sales Up

April 13, 2010

With the Spring/Easter holiday over, surveyists are studying the fresh data from the month of March.  This year, the long Easter weekend fell earlier than last year right at the start of April.  This led to a surge of retail sales figures for March in the UK, as retailers offered competitive price cuts and offers.  Chocolate and meat were big winners (not surprisingly).

Economists, ever on the cautious side, warned that the positive retail figures were not truly indicative of the overall picture in the UK.  Indeed, until the general elections are over mid-May, UK consumers are likely to remain cautious with regards to their spending habits…

Spending habits in Greece are likely to remain on the frugal side as the Government there battles with its deficit.  This weekend, Eurozone leaders and the IMF agreed to put up a loan of €30 billion for Greece, with an interest rate of around 5%.  The euro shot up on the news, against both the pound and the US dollar. Greece hopes it will not have to call upon the large loan deal yet is certainly calmed by the cushion it provides.  So, it seems, are international investors.