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Investors “Sell in May and Go Away” as risk aversion intensifies; Oil collapses

Dollar loses might, oil crumbles on surging US stockpiles and gold flickers back to life in this week’s ecponomic review.

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Investors “Sell in May and Go Away” as risk aversion intensifies; Oil collapses

Stock markets across the globe have been treated without mercy this week as fears over prolonged US-China trade tensions weighed on market sentiment over global economic growth and stability.

The gut-wrenching sell-off witnessed this month suggests that markets are adapting to the reality that US-China trade tensions are here to stay, especially following both sides ramping up their rhetoric on trade tensions throughout.

It is becoming evident that global equity markets are facing the perfect storm of headwinds in the form of persistent US-China trade drama, concerns over plateauing global growth and tumbling commodity prices. For as long as these themes remain in play, investor appetite for stocks is poised to evaporate – ultimately bringing equity bears back into the game.

Asian stocks flashed red on Friday morning. This followed a painful session on Wall Street overnight. European shares are at threat of trading lower this morning and will likely be further at risk to volatility depending on the newsflow coming out of the European elections.

Dollar not so mighty after US data disappoints

Investors “Sell in May and Go Away” as risk aversion intensifies; Oil collapses

Investors who were looking for an appropriate opportunity to attack the Dollar were given the thumbs up yesterday after official reports showed that the IHS Markit US manufacturing PMI hit a 9-year low this month.

Rising concerns over the prolonged US-China trade disputes negatively impacting the US economy are at threat of playing a leading role in the sudden USD selloff.

Markets still expecting the Federal Reserve to cut US interest rates later this year, highlighting that the unexpected Dollar upside in 2019 risks running on borrowed time.

While the perception that the US remains in a far better condition than everyone else could continue supporting the Greenback, and a sudden spell of bad data would threaten this sentiment falling over like a house of cards.

Oil crumbles on surging US stockpiles; trade tensions weigh

West Africa Crude -Angolan June sales affected

There are few doubts that yesterday should unofficially be declared as the seller’s market for Oil prices after the commodity tumbled more than 5%, the steepest drop for Oil in 2019.

The dangerous combination of surging US crude inventories, weak demand from refineries and rising concerns over US-China trade tensions impacting economic health is creating a recipe for disaster in Oil markets.

It must be kept in mind that concerns over supply shocks following the resumption of economic sanctions on Iran could only push Oil prices to a certain level and this has been baked into the market months ago.

Commodity spotlight – Gold

Gold flickered back to life yesterday as ongoing US-China trade tensions and Brexit drama accelerated the flight to safety. A depreciating Dollar supported upside gains with prices punching back above the stubborn $1280 resistance level.

With speculation in the air of the Fed cutting interest rates this year and persistent concerns over slowing global growth weighing on risk sentiment, Gold’s medium to longer-term outlook remains tilted to the upside.

Taking a look at the technical picture, bulls seem to be back in the driving seat after prices pushed back above $1280. The daily close above this point is likely to signal a move higher towards $1300.

The views expressed in this piece are the author’s own and do not necessarily reflect News Central TV’s editorial stance.

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Central Africa Politics

Ali Bongo joins independence celebration in Libreville

The public outings were the first time Gabonese have seen their leader beyond the presidential palace since he fell ill last October

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Ali Bongo joins independence celebration in Libreville
Gabon's President Ali Bongo (C-L) and his wife Sylvia Bongo (C-R) sit on the tribune as they attend a parade during the country's independence day celebration in Libreville, on August 17, 2019, marking its independence from France in 1960. - Ali Bongo on August 17, 2019 made a rare public appearance to attend the country's independence day celebrations, nearly ten months after suffering a stroke that fueled speculation about his ability to rule. (Photo by Steve JORDAN / AFP)

Gabon’s President Ali Bongo on Saturday made a rare public appearance to attend the country’s independence day celebrations, nearly ten months after suffering a stroke that fueled speculation about his ability to rule. 

Bongo, whose every move is scrutinised for signs of his state of health, on Friday made his first public appearance since his illness, taking part in events on the eve of celebrations to mark Gabon’s independence. 

The public outings were the first time Gabonese have seen their leader beyond the presidential palace since he fell ill last October, except for appearances filmed and edited by Gabonese government or state media.

Standing straight in an army vehicle, in a dark suit and dark glasses, Bongo on Saturday arrived at the military parade on Libreville’s main boulevard along the capital’s seafront. 

President Ali Bongo of Gabon on August 16, 2019 made his first live appearance in public nearly 10 months after suffering a stroke, attending ceremonies in the capital Libreville. (Photo by STEVE JORDAN / AFP)

Early on Saturday morning, many people had flocked to the seafront, trying to make their way through many security barriers to catch a glimpse of their leader.

“There are people who said he was sick, but he was able to greet us,” said Mama Youssouf, a young spectator in the crowd.

Speculation about 60-year-old Bongo’s capacity to rule the country surged after he suffered a stroke while in Saudi Arabia.

He was flown to Morocco for treatment, returning in January. During his extended absence, the army quashed a brief attempted coup.

Ten members of Gabon’s political opposition, civil society and trade union movement have filed a suit requesting Bongo be assessed to see whether he is medically fit to continue in office.

A lower court dismissed the case in May, saying only the two houses of parliament, or the Constitutional Court acting for the government, were empowered to determine whether the president was unfit.

But the Court of Appeal has said it would hear an appeal by the plaintiffs and set a date for it — August 26.

Bongo succeeded his father Omar Bongo, who became head of state in 1967 and died in June 2009, leaving a legacy of corruption allegations.

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Central Africa News

DR Congo authorities ban rallies in Kinshasa as tensions rise

Tensions rose in the capital after youths announced they would hold a protest against the candidacy of a former justice minister

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UDPS opposition party leader Felix Tshisekedi gestures to supporters as Authorities bans rallies

DR Congo authorities have banned political rallies this week in the capital Kinshasa because of tensions between supporters of President Felix Tshisekedi and those of former leader Joseph Kabila, police said Sunday.

Tshisekedi was elected in December to replace Kabila who presided over sub-Saharan Africa’s biggest country for nearly two decades.

Tensions rose in the capital after the youth wing of Tshisekedi’s Democracy and Social Progress party (UDPS) announced it would hold a protest against the candidacy of a former justice minister for the senate presidency.

In response, the pro-Kabila Red Berets movement said it would hold a counter-march to support the candidacy of Alexis Thambwe, who is considered by many a hardliner from the Kabila regime.

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Kinshasa police chief General Sylvano Kasongo told state television that given the tensions in the capital, Kinshasa’s governor had banned all political rallies for this week. “He instructed the police to take all appropriate measures. Anyone who attempts to march or disturb the public order this week will find the police in their way,” he said.

UDPS youth wing spokesman Fils Mukoko told reporters they wanted to protest against seeing “the same faces in charge of the country’s institutions or in the government.”

Kabila’s Common Front for Congo (FCC) coalition won comfortable majorities in both houses of parliament as well as provincial assemblies, and his supporters also dominated elections for the governorships across the country.

Read also: GNA announces a new political plan, promises elections in Libya

None of the candidates the FCC presented for seven key Senate posts is from Tshisekedi’s CACH alliance in the legislature despite an agreement to work together between the two political blocs.

Six months after Tshisekedi’s inauguration and more than a month after the appointment of Prime Minister Ilunga Ilunkamba, who was proposed by Kabila, CACH and FCC negotiators are still struggling to agree on the composition of the government.

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Central Africa Politics

Cameroon’s government keeps postponing local elections for ‘no reason’

On July 11, 2018, the elections were postponed a first time using the same method.

Kathleen Ndongmo

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Anti-Paul Biya Protesters demonstrate in front of the Eiffel tower in Paris, France,

Cameroon President Paul Biya said Monday he was delaying local elections to 2020, a declaration read on the radio said Monday, the second time in two years that the poll has been postponed.

“The mandate of municipal councillors elected on September 30, 2013 has been extended until February 29, 2020,” Biya declared, which essentially sets the poll back until that date.

No reason was given for the extension.

On July 11, 2018, the elections were postponed a first time using the same method.

Biya, who is 86, has been in power for 36 years.

Legislative elections could now be delayed as well because the government wants to hold them at the same time to cut costs, according to deputies.

Cameroon is in the midst of a security crisis that has pitted separatist English-speaking regions in the west against the French-speaking population elsewhere.

In the north, the Nigerian jihadist group Boko Haram stages regular armed attacks as well.

The country is also facing political ructions, with the head of the opposition Movement for the Rebirth of Cameroon (MRC), Maurice Kamto, and about 100 of the party’s supporters still in jail after their arrest in January.

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