Market Summary: April 2016
Oil prices settled above $45 pulling up other commodities prices in their wake. Higher energy prices helped reduce pressure on energy companies and on country reliant on such exports like Saudi Arabia, Russia and the like. OPEC countries are still failing to agree on a cut in oil production to stabilize energy markets.
In the face of volatile and uncertain oil price levels Saudi Arabia has announced a series of reforms to help turnaround the economy of the middle eastern kingdom which is heavily oil dependent. The country's finances have shown large losses due to continuing low energy prices.
The Unites States economy is on the right track as shown by the falling unemployment rates. American firms are favored by the weaker dollar against the major currencies. Moreover the federal reserve chose to leave rates unchanged to further support the economy. The central bank is thought to raise its target rate later in the year.
The outlook for Britain is increasingly uncertain while the referendum draws nearer. The aftermath of an exit from the European Union remains unknown and highly speculative with both pro and anti exit highlighting the benefits of their respective views. In the meantime the overall economic situation is stable and relatively positive.
The bank of Japan refrained from supplying further monetary easing after pushing interest rates into negative territory in the previous months. However prices are still not recovering and other indicators are in the red. Japanese companies are hoarding cash and refuse to invest due to the stale economic climate and falling export against a strengthening Yen. More economic stimulus is awaited from the part of the government which already postponed an increase in sales tax.
In China production rates are rising driving up prices for commodities such as iron ore. On the other side of the pacific Brazil is struggling economically and politically with negative economic growth and an enormous political turmoil involving the political establishment at all levels.