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Investors “Sell in May and Go Away” as risk aversion intensifies; Oil collapses3 minutes read

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 News

Militia behead 16 people in new DR Congo massacre – civil society

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Suspected militia fighters have decapitated 16 people in a new village massacre near Beni in the northeastern Democratic Republic of Congo, civil society sources said Friday.

Three more civilians were wounded in Beni town by an explosive device on Thursday night, an official source said, in a new tactic in a region beset by militia violence for decades.

The killings on Thursday in the Mbau region north of Beni have been blamed on the Allied Democratic Forces (ADF), a militia group responsible for a string of massacres since the start of November.

“Sixteen decapitated bodies have been found in searches that started in the evening,” Jamal Moussa, spokesman for the network of civil society organisations in Mbau said.

The massacre targeted the small village of Mantumbi.

“The ADF terrorists attacked in daylight (on Thursday), first in the bush where people were in their fields, and then in the village,” Moussa said.

DR Congo forces launched operations against the ADF in the eastern region at the end of October. But in response, the ADF has carried out massacres, in an apparent bid to discourage civilians from helping the military.

At least 100 people have been killed since November 5 in attacks blamed on the ADF, an Islamist-rooted militia with origins in Uganda.

No military sources would officially confirm Thursday’s report, but the Congolese army and UN troops deployed to the vast country have announced joint operations against ADF forces in the Beni region.

Another civil society group, Lucha, reported a toll of at least nine people killed near Mbau.

The administrative chief of Rwenzori, one of the four districts of the town, Alois Mbwarara,  said two passengers on a motorbike reportedly threw an explosive device which blew up in the market, wounding three people.

“The ADF, on the run from the Congolese army, now uses their stooges in the town for acts of sabotage,” he said. 

The army is analysing debris to determine whether it was a homemade bomb or a hand grenade.”

The last time an explosive device was used in Beni was in 2007, the official added.

The Congolese army has discovered “a factory for large-scale production of homemade bombs” at a seized ADF camp, military spokesman General Leon Richard Kasonga said on Wednesday.

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Central Africa News

Hundreds gather as DR Congo buries 27 massacre victims

Mourners gathered in silence around the Oicha morgue, near the Ugandan border and east of the DRC town of Beni

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Hundreds gather as DR Congo buries massacre victims
People gather in Oicha, on November 29, 2019, as 27 victims of the latest massacre in the country's volatile east were being burried, with hundreds paying homage while lashing out at security forces for failing to stop attacks. - The victims were hacked to death with machetes on November 27, taking to 107 the number of people killed in and around Beni since November 5. The vast majority of the killings have been carried out by the Allied Democratic Forces (ADF), a militia that has plagued the Democratic Republic of Congo's east since the 1990s. (Photo by Bienvenu-Marie BAKUMANYA / AFP)

The DR Congo town of Oicha on Friday buried 27 victims of the latest massacre in the sprawling country’s east, with hundreds paying homage to the dead.

Mourners gathered in silence around the Oicha morgue, near the Ugandan border and east of the DRC town of Beni, the scene of repeated deadly attacks.

Workers wore face masks as they wrapped the corpses in shrouds. Wooden crosses marked the graves and many wept as the bodies were lowered.

During the mass funerals, gunfire broke out from the nearby bush but it was unclear who was firing.

The victims had been hacked to death with machetes on Wednesday, taking to 107 the number of people killed in and around Beni since November 5.

The vast majority of the killings have been allegedly carried out by the Allied Democratic Forces (ADF), a militia that has plagued the Democratic Republic of Congo’s east since the 1990s.

The massacres have sparked protests against the local United Nations peacekeeping mission, known by its acronym MONUSCO.

Meanwhile, a general shutdown was observed in Goma, the main city in DRC’s east, in solidarity with the beleaguered residents of Beni and Oicha.

The UN refugee agency said there has been an exodus of locals from Oicha to Beni, about 30 kilometres away.

The UN High Commissioner for Refugees on Friday announced that among other things”… alarming reports from the region suggest people being trapped and under threat from the armed groups, with daily reports of loss of life.”

Abductions and attacks on schools, health centres and indigenous communities are also on the rise.

Information remains difficult to verify, as the movement of humanitarian workers is restricted due to insecurity around the city and in the territory of Beni, as a result of violence.”

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Central Africa Politics

Gabon detains 8 over theft and oil revenue embezzlement

The current investigations are a follow-up to Operation Mamba — an anti-corruption campaign launched in 2017 by President Ali Bongo

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Gabon detains 8 over theft and oil revenue embezzlement
Gabonese President Ali Bongo Ondimba. (Photo by GABRIEL BOUYS / AFP)

Oil-rich Gabon has detained eight people for theft and money-laundering as the government intensifies a crackdown on corruption, the prosecutor for the capital Libreville said Thursday.

The revived anti-graft drive has seen a string of top-level arrests in the country, as accusations that millions of Euros have disappeared from state coffers swirl around top officials.

“Eight people have been placed in preventive detention,” said prosecutor Andre Patrick Roponat, adding that they were accused of “siphoning public funds and money-laundering.”

The group appeared before a judge on Wednesday along with eight others who were released on bail, Roponat said.

Pro-government newspaper L’Union reported this week that more than 85 billion CFA francs have “evaporated” over the past two years from the funds of the Gabon Oil Company.

The current investigations are a follow-up to Operation Mamba — an anti-corruption campaign launched in 2017 by President Ali Bongo, who has been battling serious illness.

READ: Ex-Gabonese MP gets 6 years sentence over electoral violence

The 60-year-old president said last month he is “fiercely determined” to push ahead with the campaign against graft.

One high-profile political figure embroiled in the affair is Brice Laccruche Alihanga, Bongo’s former cabinet director who took the lead and spoke for the president after he suffered a stroke in 2018.

Laccuruche held his cabinet post for more than two years but was dismissed on November 7, at the start of a wave of arrests.

He has announced on social media that he will undertake a new mission for “the president and for Gabon”.

Earlier this week, lawyers told international media that presidential spokesman Ike Ngouoni and a dozen others were arrested and questioned over their ties to Alihanga.

READ: Gabon’s Ali Bongo vows to “complete mission” despite health challenges

During his months-long absence abroad for treatment, speculation over Bongo’s fitness surged and the army quashed a brief attempted coup.

Bongo has ruled Gabon since 2009, following the death of his father Omar Bongo, who was in power from 1967.

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