Market Overview by Windsor brokers Cyprus.

[Oscar09]

Currencies


Fy’s session in riday’s session in New York saw the USD fall dramatically after Bear Stearns announced that a worsening cash position forced them to secure emergency funding.
News that the New York Federal Reserve and J.P. Morgan Chase were to provide funds for the fifth-largest U.S. investment bank signaled more credit turmoil to come and added to investor fears that the economy is in for a long recession.

The last time the Fed bailed out institutions was during the Great Depression of the 1930's and this may trigger a fear that there may be more big firms who may be in need of similar funding.

EUR/USD reached a high of 1.5688 and remained in a bid tone late into the NY session as the market was kept in suspense as to whether the
Fed would have to do much more to ease the nerves either by cutting interest rates even more aggressively or by taking additional measures to inject liquidity.

USD/JPY took another tumble as the markets intent to sell USD increased. It plunged to 98.91, its lowest level in 12-1/2 years, before edging back to 99.31, down 1.1 percent. It was down nearly 11 percent against the yen so far in 2008.

GBP hit a record trough against the Euro on Friday, but edged up to three-month highs versus USD battered by the news from Bear Stearns.
GBP/USD fell heavily after almost hitting the 2.0400 level. Good selling from Merrill Lynch tanked GBP and it never recovered. Very good selling in GBP crosses further added to its demise.


Energy

U.S. crude oil futures ended lower on Friday after seven straight sessions of record highs, as traders took some profits from an extended rally spawned by record lows in the dollar.

As traders took pre-weekend profits from crude, they also cashed in on red-hot heating oil futures, which surrendered a part of their day's gains after hitting another record.

On the New York Mercantile Exchange, April crude settled down 12 cents, or 0.11 percent, at $110.21 a barrel, trading from $108.84 to $110.92, which was just under Thursday's intraday record of $111.

For the week, NYMEX crude rose $5.06, or 4.8 percent. Prices have risen for six weeks in a row, gaining $21.25, or nearly 24 percent, in that period.

In London, April Brent crude expired and settled 1 cent higher at $107.55 a barrel, trading between $106.24 and $108.02, which was a record.


Precious metals

Gold raced to an historic peak above $1,000 on Friday as the dollar's plunge to record lows on weak data and deepening financial market troubles in the United States boosted bullion's safe-haven appeal.

Bear Stearns BSC.N shares tumbled as much as 50 percent on news liquidity problems prompted the investment bank to secure financing from JPMorgan Chase and the Federal Reserve Bank of New York.


Spot gold surged as high as $1,007.10 an ounce; it was at $996.90/997.70 by New York's last quote at 18:15 GMT, up from $991.00/991.80 late on Thursday.

Gold, seen as a safe haven asset, has gained more than 20 percent this year on top of a 32 percent gain in 2007.

U.S. gold futures set a record high of $1,009 an ounce. The most active contract for April delivery on the COMEX division of the New York Mercantile Exchange settled up $5.70 at $999.50 an ounce.

Gold rallied as the dollar tumbled to a record low against the Euro after news of mounting problems at Bear Stearns, the No. 5 U.S. investment bank, stoked fears of a long recession.


Stock Indices


U.S. stocks tumbled on Friday as an emergency rescue of Bear Stearns orchestrated by the Federal Reserve revived fears about a deepening global credit crunch, triggering a massive sell-off in shares across the board.

Stocks plummeted after the New York Fed and JPMorgan Chase & Co stepped in with short-term financing for Bear Stearns Cos., the fifth-largest U.S. investment bank. Before the opening bell, Bear Stearns shocked Wall Street when it said its cash position had unraveled in the past 24 hours.

Bear Stearns stock sank as much as 50 percent before closing down 45.9 percent at $30.85. The Standard & Poor's financial index fell 4.1 percent as investors feared a massive unwinding of Bear Stearns investments could trigger a financial calamity.

The Dow Jones industrial average dropped 194.65 points, or 1.60 percent, to end at 11,951.09. The Standard & Poor's 500 Index shed 27.34 points, or 2.08 percent, to 1,288.14. The Nasdaq Composite Index slipped 51.12 points, or 2.26 percent, to 2,212.49.

Although all three indexes finished the day sharply lower, they did trim some of their losses from their session lows in morning trading when the Dow was down 2.5 percent, the S&P 500 was down 2.8 percent and the Nasdaq was down 2.6 percent.

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