Forex Daily

Oil firms Shell and BP have announced combined first-quarter profits of over 7bn. Shell made a profit of £3.9bn and rival BP made a staggering £3.31bn in the first three months of the year. The quarterly profits come amidst global concern over the price of petrol.

In the UK the average price is now 109.8p a litre for petrol, which is equivalent to nearly £5 a gallon (4.55 litres) according to the AA. In the US, where fuel taxes are much lower the average price is $3.60 (£1.80) for an American gallon (3.79 litres).

Alistair darling yesterday urged mortgage lenders to cut the cost of home loans, as policy makers voice concerns about the housing market. The housing market has slowed over the past few months after years of double-digit growth and lenders, hit by the credit crunch have curbed new lending.

In a joint statement by lenders, they agreed that the Bank of England’s plan to allow banks to swap hard-to-shift mortgage assets for government debt would ease economic pressures and allow them to offer cheaper loans.

Tesco has announced an annual profit of £2.846bn, an 11.8% increase for 2007. Although Tesco admit prices had risen by around 1.5% across the board, the increase on food prices masked price cuts on non-food items.

Tesco has stood strong as the UK high street has suffered as households have been hit by higher mortgage costs, fuel prices and food bills.

The head of the World Bank Robert Zoellick has said that the rapid rise in food prices could potentially push over 100 million people further into poverty. This warning follows a statement from The International Monetary Fund which said that hundreds of thousands of people were at risk from starvation.

Food prices have risen sharply over the past 6 months due to poor weather in some countries coupled with bigger demand and an increase in land being used to grow crops for transport fuels.

Barclays capital has launched three indices for tracking foreign exchange unpredictability. They hope the products will provide both varied long-term investment and protection against market downturns in the short term.

Each of the indices have been designed to be used in a variety of structures and investment purposes, and it will be possible to generate tracker funds for investors as well as underlying for structured products.

Eurotunnel’s new owners Groupe Eurotunnel announced its first annual profits this week, amidst its huge restructuring programme for its debts. The company has struggled with its debt since opening in 1994, but brokered a deal with its creditors last year. This agreement cuts Eurotunnel’s debt from 9.2bn Euros to 4.2bn Euros.

Groupe Eurotunnel’s restructuring plan involves getting shareholders to swap their shares to the new company, which saved the organization from bankruptcy, but this means that shareholders no longer get unlimited free travel.

As most analysts predicted earlier on in the week The Bank of England today lowered the interest rate from 5.25% to 5% in an attempt to kick start the economy amidst the global credit crunch. It’s the third time the Bank of England has cut in interest rates since early December.

Recent problems in the money markets coupled with declining house prices have attributed to the decision. Business groups welcomed the decision and called for further reductions to shore up growth.

The world’s two biggest search engines, Google and Yahoo have announced a two week trial that will see them sharing advertising space. Under the proposed pilot Google will be able to place its adverts alongside 3% of Yahoo’s search results.

This news it set to frustrate Microsoft, who have offered to buy Yahoo for a reported $44.6bn (£22.6bn), with some analysts saying that the move is designed to extract a higher offer.

A Microsoft statement has also criticised the trail, saying that any lasting deal would make the market far less competitive.

The International Monetary Fund (IMF) plans to sell some of its gold assets to shore up the troubled financial market. The IMF hopes to raise in the region of $6bn (£3bn) from the sale, approximately 12.97 million ounces which equates to around 12% of its gold holdings.
Gold’s price has been steadily rising over the past few months as traders look for havens to protect their money from the unstable financial markets.
The IMF can only sell the gold if it gets approval from the US Congress and many of the 185 countries that are members of the organization.

Halifax Bank in the UK have announced the largest drop in house prices for the last 15 years for last month. HBOS PLC reported a drop of 2.5% which is much greater than the predicted 0.4% fall expected by financial experts.

The quartely results showed little encouragement for the economy with prices falling by 1%. This is one of the largest house price falls since 1995.