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- Asian shares rose on Friday, taking their cue from a jump in oil prices and Wall Street gains after minutes of the Federal Reserve’s latest meeting damped down expectations of an imminent Fed rate hike. The Fed minutes revealed the extent to which policymakers are concerned that a global economic slowdown might threaten the U.S. economic outlook. Though they said overseas turmoil had not “materially altered” economic prospects, they opted to hold interest rates steady last month. Riskier asset markets, which had risen when the Fed held off raising rates in September, got a further boost on confirmation policy makers won’t rush to tighten policy at a time of slackening global growth. An unexpectedly weak jobs report for September had led many investors to speculate that the Fed will not deliver its first hike since 2006 until 2016. Data out on Thursday showed the number of Americans filing new applications for unemployment benefits fell more than expected to near a 42-year low in the week ended Oct. 3, keeping alive the view that improving labor conditions will prompt the Fed to eventually act.
- Euro-zone governments, Greece’s biggest creditors, agree that debt relief for Athens should be accomplished by capping its debt servicing costs at 15 percent of gross domestic annually, the chairman of the euro zone finance ministers, Jeroen Dijsselbloem, said on Thursday. But discussions on whether the relief should be granted up front, over time as some conditions are met, or as a mix of the two, would only start later this year, after Greece successfully passes the first assessment by the creditors of its bailout reforms, he said. “There is a broad understanding about the method we should choose, that is to look at the annual financing needs for the sovereign debt,” Dijsselbloem told Reuters in an interview. “Second, there seems to be a broad understanding that a good standard would be to have the cap at a maximum of 15 percent of GDP,” he said. “And third, and we are working on that with the European Commission and the International Monetary Fund, would be to have a common understanding of scenarios: What are the realistic expectations in a normal scenario? Or in an adverse scenario in terms of growth and inflation, etc?” he said. Athens, and initially also the IMF, has been pushing for a haircut on Greece’s nominal sovereign debt, which is to top 180 percent of GDP this year, according to commission forecasts.
- Crude oil prices edged higher in Asia on Friday as Fed signals that rates will stay on hold and moves afoot to trim output help. investors are looking to oil services firm Baker Hughes which last week said in its weekly rig count that U.S. oil rigs fell by 26 to 614 for the week ending on Sept. 25. It marked the fifth straight weekly decline and the sharpest drop since the week ending on April 24. With last week’s decline, the number of rigs throughout the U.S. fell to the lowest total since August, 2010. Nearly a year ago at this time, the U.S. oil rig count peaked at 1,609.
- Overnight, crude futures surged more than 3% on Thursday to reach fresh monthly highs, as energy traders continued to digest bullish comments from OPEC Secretary-General Abdalla Salem El-Badri on robust global demand growth over the next year. In prepared remarks for an address in front of the International Monetary Fund’s International Monetary and Financial Committee, El-Badri predicted that global demand will increase this year at a level considerably higher than previously anticipated. Citing stronger than expected demand in the U.S. and Europe, as well as South Korea, El-Badri forecasted that global oil demand will spike by 1.5 million barrels per day for 2015.