Oil prices rallied on Monday amid signs that producers are investing less in oil rigs, which could further curb U.S. crude production. Brent, the global benchmark, rose 2 percent (or 93 cents) to $48.40 a barrel, while West Texas Intermediate (WTI), the U.S. benchmark, gained 3.4 percent (or $1.53) to $46.21 a barrel. WTI price is down about 50 percent from a year ago amid a global supply glut.
Developing-nation stocks and currencies retreated as the euphoria surrounding the Federal Reserve’s decision to delay a rate hike was offset by growing concern over the global economic growth. The MSCI Emerging Market stock index tumbled 1.8 percent, with benchmark indexes in South Korea and Malaysia sliding at least 1.6 percent. The gauge that tracks 20 emerging-market currencies weakened 0.6 percent to a one-week low.
High Income Economies
Sales of existing homes in the U.S. fell by 4.8 percent in August (m/m), substantially more than expected. Year-over-year sales are still up by 6.2 percent, and the U.S. Federal Reserve’s decision to leave rates unchanged at near zero may give the sector a boost.
The producer price index in Germany fell for the 25th consecutive month in August, declining by 1.7 percent (y/y). The drop was greater than expected, and suggests that growth in the Eurozone is fragile.
The current account surplus in Greece widened sharply in July, swelled by inflows from the ECB of bond gains under the Securities Market Program (raising secondary income), and a larger surplus on goods and services (largely as a result of lower imports). The election held on September 20 returned the Syriza party to office without dissidents within the party who had opposed the bailout.
Latin America and the Caribbean
Colombia is offering 10-year dollar-denominated bonds, its third oversea debt sale this year, as the nation seeks to lock in low borrowing costs before the Fed hikes interest rates. The South American country is planning to raise $1.5 billion through new bond sales, and the proceeds will be used to help finance the 2016 government budget.
Burkina Faso is on the verge of civil war after its army began marching on the capital Ouagadougou to reverse a coup that was carried out by loyalists of the former president last week. The army’s commanding officers in the small West African nation said on Monday, "all the national armed forces are converging on Ouagadougou with the sole aim of disarming the presidential guard without any bloodshed.”