Yet there was a kind of uneasiness that prevailed among the investors with regards to the economic outlook of the U.S. which saw a fall in the oil prices, and a decline on the Wall Street last week. Investors’ concerns are further burdened by the thought that the huge accumulation in global stock markets that has been witnessed throughout the last three months may be overdone.

The Hang Seng index in Hong Kong surged 394.11 points, which is about 2.2 %, to settle at18,309.49 points after Chinese Leader Wen Jiabao was quoted by the Chinese State media as saying, that China’s economy was just beginning to recover progressively amid a spending spree of the government stimulus, last weekend. He was also quoted as saying that Beijing will resort to an easy credit policy to enable growth and will support it all through.

The Shanghai Composite index in China also rose 26.13 points, which is 0.9 %, to settle at 2,906.62 points. Japan’s Nikkei 225 stock average was up 28.01 points, which is 0.3 %, to settle at 9,814.27 points, while South Korea’s Kospi scaled up 5.96 points, or 0.4 %, to attain 1,388.98 points.

Hong Kong’s surge is surely due to the surge in the Chinese markets and the Chinese markets are in a positive mood now as the investors are highly optimistic about the future. The investor sentiments in China were also helped by the decision of the World Bank on Friday last week to raise its economic growth forecast for 2009 from 6.5 % to 7.2 %. This also contributed to a rise in the Chinese stocks last week to a 10-month high, a drive that was encouraged by recent data showing an improvement in investment, retail sales and other indicators.

In other Asian markets, India’s Sensex too opened higher, moving up 0.5 % to 14,599.54 points, while a 0.6% benchmark in Australia’s market added a 0.6 percent to take up the points to 3,923.5.

Analysts are still divided over the U.S. market’s pullback issue. Traders’ worries seem to have grown in recent weeks about the economic recovery in the U.S. They have sensed that the recovery may be more of a subdued kind than originally hoped to be.

U.S. futures were narrowly mixed unlike Dow futures which were up 8 points, which is 0.1 %, to 8,484 points. Standard & Poor’s 500 futures underwent little changes and were at 916.10 points.

Oil prices were still slipping in Asia, with benchmark crude for the July delivery falling some 38 cents to register $69.17 per barrel. On Friday, it had fallen $1.82 to close at $69.55.

Among the currencies, the dollar fell to 95.88 yen from 96.26 yen in New York. The euro declined to $1.3911 from $1.3936.

On Monday, i.e., 22nd June 2009 with respect to 1 USD the rate of 1 GBP was 1.64642USD, 1 CAD was 0.876682USD, 1 EUR was 1.38729USD, and 1 AUD was 0.798270USD.

The stock markets on Friday began on a strong note after doing amazingly good on Thursday based on the data pertaining to employment and manufacturing. But subsequently the early gains gradually gave way to selling towards noon and carried on beyond that until the close, which left the Dow Jones with consecutive four days of losses over the last five.

With very little economic or corporate moves making news on Friday, prospects for resuming a rally that would drive the market to a high of 40% as expected after it fell to a lowest level in about a decade or more in early March, seemed poor but not unlikely though. The investors and traders, in recent weeks have been worrying about an economic recovery which will be more of a subdued kind than that was originally hoped. This also have left them wondering that the massive run-up in stocks which was speculated may have been greatly overdone. There is surely no doubt that the economy will improve sometime soon but traders and investors are betting on some kind of sideways consolidation compared to a continuation of a sharp spike in share prices.

There was a fall of 15.87 points, i.e., 0.19% in the Dow Jones industrial average, to settle at 8,539.73, with more than half the stocks registering losses. There were 30 stocks in all and 16 out of them made up the average making losses.

The Standard & Poor’s 500-stock (broader), index rose 2.86 points, i.e. 0.31 %, to make it to 921.23 and the composite index at NASDAQ gained 19.75 points, i.e.1.09 %, to close at1, 827.47.

Most of the major stock indexes closed the week on a feeble note, a first time since the May 10. The Dow Jones lost 3 %, with the Standard & Poor’s 500 indexes falling 2.6%, and the NASDAQ declining 1.7 %.

The week witnessed an early tumble of stocks with weak economic reports, along with news about a seventh successive monthly decline in the industrial production, which was conflicting in nature with other economic readings.

There was however a rebound of stocks modestly on Thursday, which was spurred by improved economic activity data, including a report projecting the total number of people who were drawing unemployment benefits to have reduced last week. This was for a first time since early January this year.

Traders and investors were expecting a kind of pull-back after such big gains within a short span. This is more so because a 40 % move, like the one in the Standard & Poor’s 500 index generally takes years to develop, and a few months is definitely an unlikely proposition. Economic analysts were greatly divided over the pull-back issue. There was a huge confusion about whether the pull-back would continue, or whether the market would eventually rise after a non-stop trading in a relatively sideways movement in the passed weeks.

In the last week the major indexes rose just a little, which is less than 1 percent. Oil prices saw a reverse in its early gains and fell by $1.82 to finally settle at $69.55 a barrel towards the markets closings. Choppy trading has been predicted by most of the analysts through the summer, which is assumed to be marked by characteristically less volume, and continue in the same manner as the market heads towards the July earnings.

On Saturday, i.e., 20th June 2009 with respect to 1 USD the rate of 1 GBP was 1.65379USD, 1 CAD was 0.880515USD, 1 EUR was 1.39980USD, and 1 AUD was 0.8109970USD.

Asia markets saw oil prices remaining at $71 per barrel on Thursday, which arrested a slight decline which it had experienced earlier with U.S. falling crude inventories suggesting that the demand was beginning to improve slightly. The July delivery benchmark crude fell some 4 cents to about $70.99 a barrel at midday as per Singapore time in the electronic trading in the New York Mercantile Exchange. On Wednesday however it had risen some 56 cents to settle at $71.03 towards the markets close.

The previous week witnessed oil prices dipping below $70 a barrel as against a record rallying for three months in a row and reaching an eight-month high at $73. This was based on investor concern that speculations about the economy witnessing a speedy recovery may not be true as it has been anticipated.

The Administration of Energy Information said on Wednesday that the crude inventories fell almost by 3.9 million barrels, last week which is about 1.1 percent, and this accounts to a drop in 10.8 million barrels in the last four weeks. It is evident that the U.S. inventories are still overfed with oil which is probably the maximum in nearly16 years. The analysts see the recent depletion as an indication that the demand for gasoline is recovering.

The retail gasoline prices in the U.S. continues to rise for a straight 50th day with the demand during the holiday season in Summer exceeding expectations of a lot of refiners.

Oil has been able to double investor optimism since March which increased the investor enthusiasm that the global economy is back on the tracks and it’s only a little time till it can bounce back from one of the worst crisis in decades. Indicators this week however suggest that growth will remain a bit sluggish. This however will not affect the economy striding its way to recovery towards the end of this year argued many analysts who has also predicted a better economic environment during the same time. Improvement they said was basically expected in the form of fundamentals beginning to take hold in the following months which is surely becoming evident from data which was presented recently pointing out that things have just begun to stabilize and will continue to do so on a positive note. Many also have high hopes about oil prices surging to a $85 a barrel within the next six months and go up to as high as $95 a barrel by the end 2010.

In other NYMEX trading, gasoline registered a steady at $2.03 a gallon for the July delivery and another steady was the heating oil at $1.86. Natural gas however rose to $4.27 per 1,000 cubic feet for July delivery, which is about 1.8cents higher than its previous figure. Brent crude on the other hand fell about 10 cents to $70.75 on Thursday. At present the oil market is surely focusing its attention on the correlation between the U.S. dollar and the Euro and it is becoming clear that a weaker dollar can make oil and other related commodities fairly cheaper for other currency holder and a stronger dollar can make just the reverse.

On Thursday, i.e., 18th June 2009 with respect to 1 USD the rate of 1 GBP was 1.63815USD, 1 CAD was 0.882341USD, 1 EUR was 1.39380USD, and 1 AUD was 0.795603USD.

The core producer prices, which doesn’t include food and energy costs, fell by 0.1 percent, signaling large pressure on prices due to considerably lower demand across the economy.

Today, the government is set to release its monthly consumer price index, which actually will be a key reflector of what the consumers are paying at the cash registers and the various gas pumps.

In the U.S. housing project starts rose about 17.2% from April which is exceeded the figure analyzed by the economists, and can be attributed to an increase in the individual family home construction. Constructions of Apartment complexes and Condominiums also bounced back after witnessing a steep fall in April. The Building permits rose about 4% for the month, while the housing completions fell by 3.3% from what was seen in April. However the overall, housing starts in the month of May increased to an annual rate of 532,000, which is a great improvement from what was experienced earlier this year. This however is still down 45.2% compared to the pace of home construction which was seen same time last year.

Experts argue that although those construction levels could mark a bottom, it is unlikely that it might be the beginning of a turnaround. Surely there is now a real possibility that they will stall at a low level, they said and that if the present jump in the rate of interest gets sustained, then buyers will lose their enthusiasm towards new homes. Even the rising interest rates on a 30 year fixed mortgage from a record low of some 4.8% to a 5.5% could eventually reduce the mortgage refinancing and force prospective buyers to quit the housing market.

Construction of multiple family complexes rose 61.7 percent in May registering an annual rate of 131,000 units, which had declined 49.4 percent last April. But experts think that construction of such units will still remain weak, as is evident from various half-done apartment scattered across the country and a lot of projects involving condominiums renting out units to make way for some money.

Homebuilders will get affected as their worry is set to increase and they might have to refrain from setting an eye on new projects with the Credit markets remaining tight for construction loans, and probable buyers still being worried about further deterioration in home values.

This, economists feel, will be a sort of blessing in disguise in the larger interest of the economy as it will help bridge the massive gap between supply and demand in the housing market.

On Wednesday, i.e., 17th June 2009 with respect to 1 USD the rate of 1 GBP was 1.64615USD, 1 CAD was 0.886094USD, 1 EUR was 1.39061USD, and 1 AUD was 0.797671USD.

The Dow too witnessed a drop, probably their biggest drop in last two months since April20, in the commodity index on Monday by about 2.2%. This drop was led by crude oil, corn and copper which were among the topmost gainers until the last few days prior to this drop. The rest of the major market indexes too fell more than 2 percent. In the recent few weeks the commodities were kept afloat by signs of flexible demands in developing countries and were in high spirits recording their best monthly performance in May. However, a lot of trade analysts have voiced their concerns about the rally being a little too overdone, with billions of dollars being poured into an assortment of commodity-linked investments in the past few weeks.

The trading volume has been light as there was a huge void marked by the absence of buyers. There was a rush among the sellers to dump their stocks; the pullback surely is yet another evidence about the rally coming to a near halt. The slide started with Asia and gradually followed the sun spreading in Europe and the U.S. amidst a recovering dollar.

Oil prices slipped to near $70 as the investors pondered about a three month rally being pulled to fast to an extent quite unmatched amidst high supplies and low demands. The Benchmark for crude fell 57 cents for the July delivery to $70.07 per barrel towards midday (Singapore time) in the NYMEX. Oil had almost doubled since last March on high expectations about a worst global economic crisis being headed towards an exit.

On Monday The Standard & Poor’s 500 indexes, fell by a 2.4 percent from a 40 percent high which was registered since March 9. Many of the traders and analysts are not surprised as they had expected similar consequences as the rally wasn’t driven by fundamentals and are still weak under the prevailing circumstances.

Petroleum inventory data which is set for a release on Wednesday from the Energy Department’s Energy Information Administration is surely crucial and will be able to provide some vital insight about the crude demand. It isn’t surprising that the Traders are also keeping a close track of the U.S. dollar, as a weaker American currency would reinforce prices as investors quite often look to commodities especially those such as crude to be a hedge against inflation.

The euro maintained a steady at $1.3813 on Tuesday, after it dropped from $1.4015 towards Friday closing.

In other NYMEX trading, gasoline too was steady at $2.05 a gallon for July delivery while heating oil dropped 1.02 cents to settle at $1.81. Likewise natural gas for July delivery slid 1.9 cents to settle at $4.16 per 1,000 cubic feet.

On Tuesday, i.e., 16th June 2009 with respect to 1 USD the rate of 1 GBP was 1.64197USD, 1 CAD was 0.886589USD, 1 EUR was 1.38655USD, and 1 AUD was 0.797413USD

The officials who met in Lecce, Italy, over the weekend said that it will be sensible to set good exit strategies as soon as the global growth begins to get secured and also urged the IMF to develop ways and means to re-structure the economy without leaving flaws which might lead to a reoccurrence of the last two year crisis. Growth, according to U.S. Treasury Secretary Geithner, should remain the principal focus of policy and that it’s too early to think about restraint factors. In fact markets too were not looking forward to exit strategies as of now but would want the Government to think in those lines eventually. Markets surely fear that there might be a tilt towards inflation if nothing positive is done to withdraw the stimulus packages.

The G-8 ministers however refrained from making any statement and did not refer to currencies and interest rates in the event of absence of the Bankers in the meeting.

Russian Finance Minister Alexei Kudrin spoke highly of the dollar and emphasized on the fact that their nation was very confidant of the greenback! He said that it was not the right time to speak of an alternative to the dollar and his sentiment was also echoed by the IMF Managing Director Dominique Strauss-Kahn by arguing that he never perceived dollar as a weak currency. The German Finance Minister Peer Steinbrueck too spoke on similar lines and said that he was not effected by the Euro’s ascend over the greenback and said was still optimistic about it.

The G-8 ministers was meeting for the first time since the collapse of Lehman Brothers in September and this is perhaps amidst increasing evidences that one of the biggest recession in the world economy is just beginning to get moderate.

However last weeks data was still predicting a fragile situation. The European industrial production dropped to a record low in April and, Europe’s largest automaker Volkswagen AG, too was very weak signaling that global car markets aren’t yet recovering.

There are confusing signals and prediction about economic crisis being over. Nevertheless there are modest signs now amidst mounting unemployment and volatile commodity prices which present a lot of hindrances and this was also acknowledged by all the G-8 parties. But though many felt that it was necessary for formulating exit strategies, many however thought that it was ridiculous to talk of exiting since the economy hasn’t really recovered as yet!

The G-8 includes countries namely Canada, Germany, France, Italy, Japan, Russia, U.K., and the U.S. The Finance Ministers actually met to fix an agenda for the upcoming meeting of all the Top G-8 leaders scheduled to be held in Italy’s L’Aquila town next month. Here is hoping that the outcome yields some positive results for the markets.

On Monday, i.e., 15th June 2009 with respect to 1 USD the rate of 1 GBP was 1.62856USD, 1 CAD was 0.881928USD, 1 EUR was 1.37845USD, and 1 AUD was 0.792417USD

The crude price reached an eight-month high at $72.68 a barrel on Thursday, before slipping off to a $72.04 towards the close of Friday markets. So finally Oil is up by 113% from a five year low it registered in last December. We may be constantly cursing the gas pumps but at the end of the day it is the commodity speculators we need to thank for keeping up the hopes alive with the rising oil prices indicating that the World is able to survive some of the worst fears.

If we just look back to place ourselves in the months of February when the U.S. economy was sulking along with the majority of the financial markets, its hard to believe that times are not as bad as it seemed to be. It was crucial that somebody take a stand and put in the money necessary for the world to survive the gloomy phase.

And it was only with the equity markets rallying worldwide in March that a great sense of relief was fostered among everyone. It is not essential that you have to own stocks to be at ease to ensure that the financial system is able to avoid a total collapse, notwithstanding the massive cash infusions which flowed from the government.

The Standard & Poor’s 500 index is now convincingly up by 40% from a 12-year low level registered on March 9. So now everyone wants to make sure whether the question of a looming Great Depression has subsided or is it not over as yet. If you look at Wall Street, it has gone back to its permanent worries such as gasoline price rise, the foreign creditors’ concerns about dollar the health, and latest government bond yield jumps, which goes to show that things have just about become normal.

This rebound in the stock prices in the U.S. naturally has a lot of investors speculating, if time is just right to withdraw a few chips off the table. Key indexes too have made modest net progress since the beginning of June and the volume of trading has also faded quite a bit.

However market selling at this point might get motivated mainly due to a desire to invest in opportunities like corporate or municipal bonds, foreign stocks, commodities and even real estate.

And for the economy, the crisis phase has just become less bad from worse but not good as yet. For the economy to finally get back to some facade of normality, the government will surely need to extort itself much more in the days to come. As of now, though the rising oil prices and interest rates may seem to be a threat, the traders and the investors know damn well that times couldn’t be as bad as to what they had faced!

On Saturday, i.e., 13th June 2009 with respect to 1 USD the rate of 1 GBP was 1.64690USD, 1 CAD was 0.893695USD, 1 EUR was 1.40040USD, and 1 AUD was 0.814301USD.

The International Agency on Energy put forth yet another view on Thursday, saying that the world oil demand will eventually contract by less than what was previously expected.
Market investors are divided over what they should make out of the latest oil price moves. A fraction of them believe that it reflects a more powerful business activity, which are in tune with an economic recovery just round the corner, while others are worried that the recent spike in fuel prices might just play spoil sport slowing down a rebound from the worst economic crisis the world has faced ever since the Great Depression happened.

On Friday, i.e., 12th June 2009 with respect to 1 USD the rate of 1 GBP was 1.610082USD, 1 CAD was 0.892179USD, 1 EUR was 1.39804USD, and 1 AUD was 0.809292USD