The elections in Greece allayed fear of disruptive events, but left open all the unsolved issues that beset the governance of Euroland. Global equities were hit by Moody’s downgrade of 15 of world’s biggest banks in addition to weak data across the board. Regional markets were mostly down, on global cues, weaker oil prices, and as the region continued to be affected by bad news including MSCI not reclassifying UAE and Qatar and the delay in announcing Egypt’s election results. The dollar gained against the euro; the yen and pound tumbled and most Asia currencies dropped, with the rupee hitting record lows. Crude oil prices picked up from the 18-month low while gold prices tumbled, as last week witnessed its biggest one-day decline since end-Feb.
Equity markets got some respite from the confidence vote in Greece and the expectation that the new funds will be disbursed by the IMF and the EU. Nevertheless, European markets continued their decline for the eighth consecutive week while the Asian markets were up after Wen Jiabao’s comments on taming inflation boosted sentiment. Regional markets were mostly down - MSCI delaying their decision on Emerging Market status for UAE and Qatar led to a 1.8% decline in the DFM the day after - its biggest decline in four weeks. The euro continues to be dragged down by the Greek crisis while rising risk aversion boosted the dollar. Oil declined to a 4-month low of $104 a barrel as the IEA announced that it will release 60mn barrels of oil next month after Libya's supply disruption. Gold prices fell sharply as well and hit the lowest price in a month.
Equity markets continued to be troubled by weak data, Greece's debt worries and recent unrest over proposed austerity measures. Regional markets were mostly down, with the exception of UAE where traders are speculating a possible upgrade to emerging market status by the MSCI later this week. Euro continues to decline and yen slumped to a two-week low against the dollar. Oil prices declined; gold prices recovered on Friday after recording a sharp 1% decline last Monday.
Another week of poor performance in equity markets as investors mull over the extent of the global slowdown in the next quarters. Regionally, markets remained mixed while Saudi Arabian shares plunged to the lowest level since March on Sat, after a weak set of global data. The euro fell sharply from a 1-m high against the dollar; pound had dropped to 1-m low against the euro earlier last week after Moody's warned the UK could lose its top-tier credit rating if growth continued to slow. Oil prices fell on Fri after OPEC announced that Saudi Arabia pumped the most since 2008, reversing the spike occasioned by OPEC member disagreement.
Risk aversion was partially offset by the strong results of the US Treasury auction at the beginning of the week, but a spate of dismal data sunk Wall Street as investors dumped stocks and poured into Treasuries, driving benchmark yields to below 3.0% for the first time since Dec. Regional markets were mixed with UAE and Oman outperforming others; Saudi dipped by almost 2% on Sat, pulled down by petrochemicals. The dollar slipped on weak US data while optimism about Greece aid revived the euro which hit a four-week high. Commodities were volatile last week, with oil prices lower and gold gaining from its safe haven attribute.