Finance Society, Stockholm Business School Weekly Newsletter

Finance Society, Stockholm Business School
Weekly Newsletter - Equities & Markets
Week 49
Asian Currencies in Longest Weekly Declining Streak in Six Years as the USD Soars to
5-Year High
The dollar soared to a five-year high after a report showing added U.S. employees in November, reporting the most workers in almost two
years, leaving the Federal Reserve considering
when to raise interest rates next year.
The greenback headed for its strongest week in
more than a year as American companies added
321,000 jobs, topping all forecasts in a Bloomberg survey, Labor Department figures showed
in Washington. Norway’s krone and Malaysia’s
ringgit slid to five-year lows as a slump in
crude oil damped the economic outlook for the
As economic data boosted demand for the dollar, supported by the high U.S. interest rates,
the Asian currencies dropped for the sixth week
resulting in the longest declining streak since
“There’s a firmer dollar in general and that’s
having a broad-based negative impact on Asian
currencies,” said Mitul Kotecha, head of AsiaPacific currency strategy at Barclays Plc in Singapore. “Being a net exporter of oil, Malaysia
suffers more than others.” 12
are driving the ethanol surge. The U.S. is producing about 66 million metric tons more corn
than a decade ago, almost as much as the rest of
the world will export this year. Global demand
for U.S. ethanol is helping ward off a glut after
the government eased obligations to blend the
fuel with gasoline.3
Best Weekly Rally for Chinese Stocks Since
2009 on Record Volumes
China’s stocks capped the steepest weekly rally
since 2009 in a volatile session that spurred the
benchmark index’s biggest swings in four years
and sent turnover above 1 trillion Yuan for the
first time.
Some examples for the volatile market at the
moment is The Shanghai Composite Index,
which rose 1.3 percent at the close, after gaining as much as 2.7 percent and falling 3 percent. Haitong Securities Co. and China Construction Bank Corp. led a rally for financial
shares, adding more than 7 percent. Bank of
China Ltd. jumped 4.5 percent after losing as
much as 3.1 percent.
“The market is becoming very speculative,”
said Wang Zheng, the chief investment officer
at Jingxi Investment. “Such a rally is unsustainable for sure. The market will be in for a
very wild ride up and down next week.”4
Olle Green
5th December 2014
Ethanol is Recovering From a 4-Year Low
Exports from the U.S. showing additive derived
from corn rose 31 percent this year, the highest
level since 2011, meeting demand from South
Korea to Persian Gulf oil producers. A tripling
of gasoline and diesel exports since 2009 follows the growth in sales.
While the shale-oil boom created a stream of
refined products flowing overseas, record crops