LONDON: Oil prices rose $2 a barrel on Monday, March 21 after Western forces launched a second wave of air strikes on Libya, while in other markets glimmers of hope about Japan's nuclear crisis shaped sentiment.
The yen extended losses, with speculators wary of more coordinated action by the Group of Seven countries after their first joint intervention in over a decade last week. [FRX/
Brent crude for May was up $2.02 at $115.95 a barrel by 1115 GMT, while U.S. crude for April gained $1.91 to $102.98 after the U.N.-mandated attacks on Libya to protect civilians caught up in a one-month-old revolt against Muammar Gaddafi's forces.
For stock and bond markets, hopes of progress in averting a nuclear calamity in Japan was the driving force.
Engineers rigged power cables to all six reactors at the Fukushima complex and started a water pump at one of them to reverse the overheating that has triggered the world's worst nuclear crisis in 25 years.
The pan-European FTSEurofirst 300 index of top shares was up 1.6 percent at 1115 GMT, with Deutsche Telekom AG catapulting 13 percent higher after AT&T Inc said it planned to buy its T-Mobile USA business.
That helped boost the MSCI world share index 0.7 percent, taking it back into positive territory for the year to date.
"The market hates uncertainty and the issues in Japan are easing which is helping," Colin McLean, managing director at fund group SVM Asset Management in Edinburgh, which has 700 million euros assets under management.
U.S. stock index futures pointed to a strong open on Wall Street, with futures for the S&P 500 up 1.2 percent and Dow Jones futures up 1 percent.
The VDAX-NEW volatility index, Europe's main investor fear gauge, dropped 8 percent as the proposed Deutsche Telekom deal eclipsed concerns about Western intervention in Libya.
Safe haven German government bond and U.S. Treasury futures also fell.
"Japan has been definitely considered by the market to be the more important issue," one bond trader said.
Nonetheless, oil traders will remain on edge after unrest also flared in Syria and Yemen in the wake of popular uprisings that toppled long-time leaders in Tunisia and Egypt earlier this year and a crackdown on protests in Bahrain last week.
Oil has risen more than a fifth this quarter and the social unrest in North Africa and the oil-producing Gulf provide enough uncertainty to keep prices buoyed.
"The key is really how Saudi and Iran play out. Cool heads need to prevail. It's contained at the moment, but if things worsen, you see a Mideast premium very quickly," said Jonathan Barratt, managing director of Commodity Broking Services.
''
YEN SLIDES
The dollar rose 0.8 percent from late U.S. trade on Friday to 81.27 yen, after joint G7 intervention last week hoisted the greenback nearly 4 percent versus the Japanese currency.
The G7 acted after the yen jumped to a post-World War Two record high of 76.25 yen to the dollar last Thursday. More is expected to come if it climbs again.
"Dollar/yen will be supported in the near term with the market wary of more intervention," said Hans-Guenter Redeker, chief fx strategist at BNP Paribas.
"The central banks have drawn a line in the sand and it has made a psychological impact on the markets which are unlikely to take dollar/yen down to 76.25 yen again in the short term."
Japan's benchmark Nikkei share average plunged 10 percent last week as engineers battled to prevent a meltdown and radiation leak at a nuclear power plant crippled by an earthquake and tsunami that devastated a swathe of the country.
Japan's markets were closed for a holiday on Monday but the MSCI index of Asian stocks outside of Japan rose about 1.4 percent. - Reuters
The yen extended losses, with speculators wary of more coordinated action by the Group of Seven countries after their first joint intervention in over a decade last week. [FRX/
Brent crude for May was up $2.02 at $115.95 a barrel by 1115 GMT, while U.S. crude for April gained $1.91 to $102.98 after the U.N.-mandated attacks on Libya to protect civilians caught up in a one-month-old revolt against Muammar Gaddafi's forces.
For stock and bond markets, hopes of progress in averting a nuclear calamity in Japan was the driving force.
Engineers rigged power cables to all six reactors at the Fukushima complex and started a water pump at one of them to reverse the overheating that has triggered the world's worst nuclear crisis in 25 years.
The pan-European FTSEurofirst 300 index of top shares was up 1.6 percent at 1115 GMT, with Deutsche Telekom AG catapulting 13 percent higher after AT&T Inc said it planned to buy its T-Mobile USA business.
That helped boost the MSCI world share index 0.7 percent, taking it back into positive territory for the year to date.
"The market hates uncertainty and the issues in Japan are easing which is helping," Colin McLean, managing director at fund group SVM Asset Management in Edinburgh, which has 700 million euros assets under management.
U.S. stock index futures pointed to a strong open on Wall Street, with futures for the S&P 500 up 1.2 percent and Dow Jones futures up 1 percent.
The VDAX-NEW volatility index, Europe's main investor fear gauge, dropped 8 percent as the proposed Deutsche Telekom deal eclipsed concerns about Western intervention in Libya.
Safe haven German government bond and U.S. Treasury futures also fell.
"Japan has been definitely considered by the market to be the more important issue," one bond trader said.
Nonetheless, oil traders will remain on edge after unrest also flared in Syria and Yemen in the wake of popular uprisings that toppled long-time leaders in Tunisia and Egypt earlier this year and a crackdown on protests in Bahrain last week.
Oil has risen more than a fifth this quarter and the social unrest in North Africa and the oil-producing Gulf provide enough uncertainty to keep prices buoyed.
"The key is really how Saudi and Iran play out. Cool heads need to prevail. It's contained at the moment, but if things worsen, you see a Mideast premium very quickly," said Jonathan Barratt, managing director of Commodity Broking Services.
''
YEN SLIDES
The dollar rose 0.8 percent from late U.S. trade on Friday to 81.27 yen, after joint G7 intervention last week hoisted the greenback nearly 4 percent versus the Japanese currency.
The G7 acted after the yen jumped to a post-World War Two record high of 76.25 yen to the dollar last Thursday. More is expected to come if it climbs again.
"Dollar/yen will be supported in the near term with the market wary of more intervention," said Hans-Guenter Redeker, chief fx strategist at BNP Paribas.
"The central banks have drawn a line in the sand and it has made a psychological impact on the markets which are unlikely to take dollar/yen down to 76.25 yen again in the short term."
Japan's benchmark Nikkei share average plunged 10 percent last week as engineers battled to prevent a meltdown and radiation leak at a nuclear power plant crippled by an earthquake and tsunami that devastated a swathe of the country.
Japan's markets were closed for a holiday on Monday but the MSCI index of Asian stocks outside of Japan rose about 1.4 percent. - Reuters
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