Saturday, January 17, 2015

Swiss franc's rise leads to global casualties; No floor price in sight for oil; Getting women into the workplace

1 Swiss franc’s rise leads to global casualties (Jill Treanor & Patrick Collinson in The Guardian) West Ham FC sponsor Alpari UK has become one of the biggest casualties of the turmoil on currency markets sparked by the Swiss central bank abandoning its attempt to peg the franc against the euro. Alpari UK, an online foreign exchange dealer, said it was insolvent because of the scale of the losses suffered by its clients after the shock move by the Swiss sparked wild swings in the £3.5tn-a-day foreign exchange markets.

The repercussions of Thursday’s drama are being felt across the globe.. In New Zealand, Global Brokers NZ said it was closing down as it could no longer meet local regulatory requirements and in New York the US foreign exchange brokerage FXCM was scrambling to raise funds to avert collapse.

In London, rumours swept through dealing floors about potential losses following the surprise decision by the Swiss to stop holding their currency at SFr1.20 against the euro. The move led to a temporary seizure in the markets and the franc leaped an unprecedented 30% against the euro. There were reports Barclays and Deutsche Bank had lost millions.

IG Index was the first broker on Thursday to announce it could face £30m of losses, and similar announcements followed from other firms. Spread-better London Capital said it had £1.7m of exposure while other firms, such as City Index, were issuing statements reassuring their clients.


2 No floor price in sight for oil (Khaleej Times) Oil plunged close to six-year lows last week on oversupply worries, before staging a slight recovery as the International Energy Agency (IEA) declared there were signs that “the tide will turn”.

“How low the market’s floor will be is anyone’s guess,” the IEA watchdog said in a monthly report. “A price recovery — barring any major disruption — may not be imminent, but signs are mounting that the tide will turn.” The IEA maintained its oil demand forecast for 2015, expecting it to grow by 0.9 million barrels a day to reach 93.3 million barrels. The agency also cautioned that prices were expected to keep falling in the short-term.

The oil market had fallen on news that the Organisation of Petroleum Exporting Countries (Opec) had overproduced in December. The 12-nation Opec said in a monthly report that its production rose to 30.2 million barrels a day in December, above its 30 million limit. It also projected that demand for its oil would fall to 28.8 million barrels per day this year from 29.1 million in 2014.

Meanwhile, gold rallied to a four-month peak at $1,279 per ounce on Friday, as investors sought shelter from ongoing markets turmoil. The price of copper tumbled to the lowest level for more than five years after the World Bank slashed its global economic forecasts. Copper dived on Wednesday to $5,353.25 per tonne, last witnessed in July 2009.


3 Getting women into the workplace (Linda Yueh on BBC) If as many women were involved in work as men, then global output could be boosted as much as 40%. For countries like Japan, getting women into work is a policy priority as it could raise GDP by some 14%. That's roughly what adding women to the US workforce added to America's GDP in the post-war period.

Yet, year after year, it seems that the gender gap persists. The World Economic Forum gender gap report estimates that it would take 80 years at the current pace of progress for women to achieve parity in the workplace. So, why if the economic case is evident, would it still take so long?

Cherie Blair - wife of the former British prime minister and a top lawyer in her own right, said that she realised that even though she had attained the top First in law, it was not enough. Politea director Sheila Lawlor is more of the view that her experience shows that the system is largely meritocratic. But, they agree that education is the pre-requisite.

New York-based clothing retailer, Eileen Fisher emphasised the importance of mentorship. Training, such as to use technology, is another way of equipping more women for work. Child care, maternity and paternity leave could all help women get into work, for instance.

And it's a decision that will have considerable economic impact since the WEF estimates that there are now more women than men graduating from universities around the world for the first time. Of course, staying in work is another issue. The gender wage gap and the glass ceiling are other concerns since there are still few women at the top.


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