“The Situation In Syria …..”

The Situation In Syria

For the past seven years there has been a civil war with different groups trying to seize control of the country.  The fighting is happening between the Soldiers who support the Syrian president Bashar al-Assad, the Rebels who are against Assad being in power and the  Islamic State (IS).  Islamic State took over large parts of Iraq and then moved to Syria, the Eastern part.   Fighting still continues in the country even though the IS has lost control of a lot of the land.  Meanwhile other countries got involved, with Russia and Iran being the main supporters of Assad, while the US back the rebels.  There was suspected chemical weapon attack in a town called Douma, which is the last town under the control of the rebels.  At least 70 people had died in the attack.  A spokeswoman for the White House said that the US holds Russia and Syria responsible for the incident.  Meanwhile, Russia, Syria and Iran have said that reports of the Douma attack were fabricated by rebels and rescue workers.  They further accused the United States of seeking to use it to attack the Syrian government.  On Thursday President Trump and his national security aids discussed US options on Syria.  He threatened missile strikes in response to a suspected poison gas attack.  Meanwhile, concerns over a confrontation between Russia, which is Syria’s big ally, and the West, have been increasing as Trump voiced on Wednesday that missiles “will be coming” in response to the attack on 7^th April on Douma.  He highly criticised Moscow for supporting the Syrian President Bashar al-Assad.  Trump and Theresa May talked about the “need for a joint response to Syria’s use of chemical weapons,” the White House said.  May’s office said they agreed on the need to deter Assad’s government from further such attacks.

US Imposes Sanctions On Russian Oligarchs

The United States imposed major sanctions on Friday against 24 Russians, in one of the most aggressive moves to punish Moscow for what it called a range of ‘malign activity’ including alleged meddling in the 2016 US election.  The sanctions are in reply to what US intelligence agencies say was Russian Interference in the presidential election.  Donald Trump has been criticised for not taking strong action against Russia after a series of diplomatic disputes pertaining to the Cold War era.  The sanctions could complicate hopes for good relations with Mr Putin.  The sanctions are aimed at seven Russian oligarchs and 12 companies they own or control plus 17 senior Russian government officials.  According to Russian Security Council, Secretary Nikolai Patrushev said Moscow’s contacts with the US government would not be brought to an end by the sanctions.  They could impact the aluminium, financial and energy sectors.

Trump’s Personal Attorney

Donald Trump escalated his criticism of Special Counsel Robert Mueller’s Russia investigation and Attorney General Jeff Sessions, after the office of the personal attorney of President Donald Trump was raided by the FBI on Monday.  Trump described the situation as a “disgraceful situation” and added that he sees it as an “attack on our country”.  The raid in New York came as a result of evidence that Mueller’s team of prosecutors obtained in the course of investigating Russia’s interference in the 2016 election and whether Trump or any of his associates helped the Russians.

FED Minutes

According to the minutes from the 20-21 March meeting, Federal Reserve officials are moving towards a “slightly steeper” pace of interest-rate increases over the next few years and the outlook for growth and inflation looks brighter.  The minutes said that “a strong majority of participants viewed the prospect of retaliatory trade actions by other countries, as well as other issues and uncertainties associated with trade policies, as downside risks for the US economy.”

Germany

German industrial output fell by the most in two years in February and the sector is losing momentum according to Economy Ministry.  Output fell by 1.6 percent after rising by a revised 0.1 percent in January according to data from the Economy Ministry.  Breaking up the data showed a big slump in the production of capital goods, down 3.1 percent on the month with output of consumer goods falling 1.5 per cent.  Construction activity was also weaker overall.  The DIHK Chambers of Commerce and Industry struck a cautionary note saying escalation of a dispute between China and the US over import duties could harm the global economy and weaken demand for German goods and services.  In March, German business confidence deteriorated for a second straight month, dropping to its lowest level in nearly a year, as managers in Germany have become concerned about the rising threat of protectionism.

Puigdemont Calls For Dialogue With Madrid

As he left the German prison, the former Catalan President Carles Puigdemont called on Spain to abandon its attempts to prosecute separatist leaders, urging Madrid to enter into dialogue with them.  Spain said it will respect the German court ruling.  Extradition from Germany on a lesser charge would effectively grant Puigdemont immunity from the rebellion charges which can bring up to 25 years in prison.

UK’s Financial Services Watchdog to Publish Review Of Cryptocurrencies

Following its latest warning last week, the UK Financial Services watchdog will publish a review of cryptocurrencies in the third quarter. The sharp swings in value have become of concern to regulators.  The Financial Conduct Authority said that in its business plan for the coming financial year, crypto currencies themselves don’t come under its regulation but the use of them does.  The FCA further added that, “we will work with the Bank of England and the Treasury as part of a taskforce to develop thinking and publish a discussion paper later this year outlining our policy thinking on cryptocurrencies.”

Russian Markets

The US sanctions imposed on Friday have hit Oleg Deripaska’s United Co. Rusal  the Russian billionaire very hard.  The sanctions against billionaires who are connected to the Kremlin, and the White House tougher stance on Syria, keep investors away from increasing their exposure to the world’s most attractive valued markets.  The ruble plunged to the weakest level since December 2016 and the Russian stock plunged the most since the annexation of Crimea in 2014.

Tough Sanctions Effecting Deripaska’s Metals Empire

Oleg Deripaska, the Russian billionaire is on an international blacklist as the US aimed its toughest sanctions at Deripaska’ metals empire, banning Americans from dealing with companies including United Co. Rusal.  As the move by the US became more clear, the biggest aluminium producer outside China lost half of its value in one day.  The sanctions barred Deripaska from participating in the global dollar economy.  As a result investors dumped the stock and bonds issued by his companies as aluminium traders refused to buy Rusal’s metal.  There was a shock wave effect on Russia’s financial markets as traders got anxious that the corporate empires controlled by other tycoons could come under attack.  Furthermore, Moscow-traded stocks fell the most in four years, the currency slid the most in the world and the nation’s credit risk soared.

Chinese President Xi Jinping’s Speech 

The speech by the Chinese President Xi Jinping marking 40 years after the first economic reforms transformed China, was closely watched after Trump’s plan to hit hundreds of Chinese products with duties.  In his keynote address on Tuesday, Chinese President Xi Jinping reiterated pledges to open sectors from banking to auto manufacturing, whilst he also warned against returning to a “Cold War mentality” amid trade disputes with US counterpart Donald Trump.  Although he offered little new policy he affirmed or expanded on proposals to increase imports, lower foreign-ownership limits on manufacturing and increase protection intellectual property.   From his end President Donald Trump praised Xi Jinping’s “kind words” after the Chinese leader has reaffirmed his pledge to continue to open the country’s banking and manufacturing sectors.  However, just as the risks of a global trade war were fading, concerns over a possible US strike on Syria mounted.  In fact Trump has cancelled a trip to South America as preparations intensify for a response to a suspected chemical attack in Syria.

Financial Markets

Heightened tension over Syria and US sanctions drove the Russian rouble to a two-year low.  Furthermore, most of the main stock markets were back in the red after two days of gains.  The Russian Rouble and the Turkish lira drew the most attention.  The Turkish lira tumbled to a record low keeping its position as the worst performer this year.  The rouble slumped as much as 2.5 percent against the dollar and even worse against the euro. Government bonds meanwhile made gains, with European and US yields around the 0.5 and 2.8 percent marks.   Furthermore, the markets are digesting the first fall in US inflation in 10 months.  The dollar remained near its two week lows due to trade war worries with China and domestic scandals surrounding Trump.  On Thursday US stock futures rose and Treasuries slipped as investors speculated that the Middle East tensions will not end up in a destabilising conflict.  Contracts for the S&P 500 ended up higher after President  Trump hinted that military action may not be imminent, while Russia has toned down its war rhetoric.  This helped stocks in the US and Europe to ignore overnight trade rumblings from China that dragged Asian stocks lower.

Ford

Ford said it won approval from the European Central Bank for its application to set up a bank in Germany as part of its strategy to reduce any risk from Britain leaving the EU.  Ford Credit Europe (FCE) is expected to establish this bank in the second half of 2018 according to a spokesman for the company.  FCE sought a German banking license to run alongside its existing British one last year for passporting purposes in view of the uncertainty after Brexit.   FCE which is a wholly indirect subsidiary of Ford provides financial services to dealers, retail, fleet and business customers in Britain and 11 other countries in Europe.

Commodities

The week started with a shake up in global commodities.  The price of aluminium jumped as much as 4 percent while shares in Oleg Deripaska United Co. Rusal, the biggest aluminium maker outside China plunged after the US announcement of sanctions highlighted concerns over supply.  Meanwhile, the price of oil is further being effected by trade tensions as the barrel of West Texas Intermediate for May delivery traded at $62.18, which is close to a three-week low.  Later in the week oil hit its highest in more than three years with Brent crude jumping to a high of nearly $72 a barrel and US crude futures rising 83 percent from their last close to $66.34 a barrel.

Deutsche Bank AG

A new Chief executive officer, Christian Sewing, has been appointed at Deutsche Bank AG after a supervisory board meeting.  The new appointment ends John Cryan’s term after less than three years as investors became increasingly frustrated with the lack of results from his turnaround plans.  The decision to give the job to an insider is seen as a “safety first” choice.  Shares of the bank increased as much as 4.7 percent on Monday morning.

Facebook’s CEO – Mark Zuckerberg

On Tuesday Chief Executive Mark Zuckerberg navigated through the ten hours of questions over two days of US congressional hearings without making any further promises to support new legislation or change the way the social network does business.  Questioned by nearly 100 US law makers Zuckerberg repeated apologies he already made for a range of problems that have beset Facebook, from a lack of data protection to Russian agents using Facebook to influence US elections.  Shares in Facebook posted their biggest daily gain in nearly two years closing up 4.5 percent.  The shares fell substantially last month after it came to light that millions of personal data of users was harvested from Facebook by Cambridge Analytica a political consultancy firm.  The latest estimate of affected users was up to 87 million.

‘Disclaimer: The information provided on this website is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning investments or investment decisions, or tax or legal advice. Similarly, any views or options expressed on this website are not intended and should not be construed as being investment, tax or legal advice or recommendations. Investment advice should always be based on the circumstances of the person to whom it is directed, which circumstances have not been taken into consideration by the persons expressing the views or opinions appearing on this website. Timberland Finance has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website. You should always take professional investment advice in connection with, or independently research and verify, any information that you find or views or opinions which you read on our website and wish to rely upon, whether for the purpose of making an investment decision or otherwise. Timberland Finance does not accept liability for losses suffered by persons as a result of information, views of opinions appearing on this website. This website is owned and operated by Timberland Invest Ltd.’