Morning business news - August 21

Thursday 21 August 2014 13.40
Morning business news - August 21
Morning business news - August 21

Global stock markets are creeping back up after recent geopolitical tensions took their toll on investor sentiment.

Elsewhere, the dollar is at a one year high and the pound has regained some of the value it lost in the past month.

Paul Sommerville of Sommerville Advisory Markets described the moves as interesting.

"We have to be mindful that volumes were very light in August. However, markets are not too concerned with geopolitical tensions. It's not really an issue. The only thing they are interested in is what Central Banks intend on doing and how fast they are going to do it," he said.

The recent market strength and currency gains were brought about in particular following the publication of the minutes of two major Central Banks yesterday.

In the UK, two policy makers at the Bank of England voted in favour of interest rate increases.

"It now seems likely that the UK will be the first major economy to raise interest rates, but it will be slow and gradual," he said. 

"Investors are worried that the US Federal Reserve would increase rates in the near future, but that doesn't look like happening any time soon now. Janet Yellen will likely wait until inflation comes back into the system and move then," Paul Sommerville added.

He said Ms Yellen was likely to speak some soothing words to investors when she appears at the Jackson Hole summit of Central Bankers this weekend.

The ECB is one central bank where interest rates will not be going up any time soon and Mr Sommerville said the European economy was in a dismal state.

"Markets are looking for the EU to introduce stimulus in the form of Quantitative Easing. They're far behind the US and the UK who are coming to the end of QE. German indices lost 10% in the last few months. The biggest engine in Europe is really faltering," he said.

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MORNING BRIEFS - Breaffy House resort near Castlebar in Co Mayo has been bought out of receivership. Hotel management company Great National Asset Management bought the company for an undisclosed sum. The 230 room hotel and resort had been on the market with a guide price of around €3m.

*** Computer maker Hewlett Packard reported a slight, surprise increase in its quarterly revenue for the second three months of the year. It was the first quarterly increase after eleven quarters of decline. Revenue came in at $27.6 billion, despite an ongoing company restructuring.  Sales from its PCs went up by 12%, although the other divisions stayed unchanged or fell.

*** Four McDonald's outlets in Moscow have been temporarily shut as part of an investigation into food standards. The watchdog claimed the restaurants had breached "numerous" sanitary laws. McDonald's says it is looking into the complaints. The closures come amid rising tensions between Russia and the West over the crisis in the Ukraine. A few weeks ago, Russia imposed embargoes on food imports from the EU, US and some other Western countries, in response to sanctions over Ukraine.