4th December 2014



  1. Islamic State cedes little ground despite air attacks # Fleeing war and crumbling economy, Ukrainians flock to Europe # Brent jumps above $70



  1. # Putin says foes hope to dismember Russia # Rally in airlines helps FTSE edge higher
  2. # Rally in airlines helps FTSE edge higher


  1. Schools, offices shut as typhoon bears down on Philippines
  2. China shares soar over 4%
  3. Australia 'using refugees as pawns'
  4. Farmers set to receive A$100m drought aid from government



  1. U.S. Index Futures Little Changed With S&P 500, Dow at Records
  2. Nasa's Orion 'Mars ship' set for test flight
  3. U.S. conservatives stand firm against funding for immigration order



# Islamic State cedes little ground despite air attacks

  • They have made enemies across the globe and endured three months of U.S.-led air strikes, but Islamic State fighters have surrendered little of their self-declared caliphate to the broad sweep of forces arrayed against them. Across thousands of square miles in Syria and Iraq, the radical Islamists face an unlikely mix of Iraqi and Syrian soldiers, Shi'ite and Kurdish militias and rival Syrian Sunni Muslim rebels. While they have lost towns on the edges of their Iraqi realm, especially in ethnically mixed areas where their hardline Sunni theology holds little appeal, they have consolidated power in parts of their Sunni Muslim heartland.

# Farmers set to receive A$100m drought aid from government

  • Farmers may soon receive as much as A$100m (£53m) in drought assistance from the Australian government. The package will offer concessional loans at interest rates pegged at 3.2%. Agriculture Minister Barnaby Joyce said some farmers in Queensland had not earned any income for three years because of drought. Much of Australia has received lower than usual amounts of rain this year, while the country has just experienced its hottest spring on record. "Large parts of Queensland and parts of New South Wales are experiencing the worst dry conditions on record, with rainfall at historical lows in many areas," Mr Joyce said. In the past, the government has provided billions of dollars' worth of drought assistance to farmers.

# Fleeing war and crumbling economy, Ukrainians flock to Europe

  • Andriy left his home town in western Ukraine earlier this year on a journey that brought him through the hands of shady traders in Poland to one of the world's booming markets for illegal immigrants - London. Fleeing the strife of war with Russian-backed fighters and a shattered economy, Andriy is following a path similar to one taken by thousands of his fellow Ukrainians who have travelled either eastwards to Russia or westwards to the European Union. "I don't want to fight in any war," said Andriy, who spoke on the condition neither his surname nor home town would be published because of fear that he could be deported. The nineteen-year-old, speaking in Russian because his English is limited, added: "I don't want to die - I want to live. I just want a normal life."

# Brent jumps above $70

Brent crude rose above $70 per barrel on Thursday, making small gains along with US futures, as a fall in crude stockpiles in the United States supported prices. US crude stocks fell more than expected last week as refineries hiked output, data from the Energy Information Administration showed on Wednesday. Brent added $0.45 to $70.37 per barrel by Thursday morning. The contract settled below $70 on Wednesday after a report suggested Saudi Arabia expected still lower prices for oil. US crude futures rose $0.34 to $67.72 per barrel, after a 50-cent gain in the previous session. Analysts expect prices to head lower despite recent steep falls as US shale oil production growth stays strong while OPEC has decided not to cut supply, preferring to protect market share. Markets could be going through a temporary reprieve after "bearish exhaustion", The Schork Report editor Stephen Schork told Reuters.



# Putin says foes hope to dismember Russia

President Vladimir Putin accused Russia's enemies on Thursday of seeking to carve it up and destroy its economy to punish it for growing strong, in an annual state of the union speech that seemed to outdo even his own recent strident nationalism. The Kremlin leader trumpeted his annexation of Ukraine's Crimea peninsula, praised the Russian people for their strength, accused the West of "pure cynicism" in Ukraine and said economic sanctions must drive Russians to develop their own economy. The rouble fell as he spoke to an ornate hall packed with dignitaries, delivering a speech that showed no sign of turning back from policies that have brought his country to confrontation with the West unseen since the Cold War. Russia's "enemies of yesterday" wished on it the same fate as Yugoslavia in the 1990s, he said in the speech, which ran for more than an hour and was interrupted repeatedly by applause. "There is no doubt they would have loved to see the Yugoslavia scenario of collapse and dismemberment for us – with all the tragic consequences it would have for the peoples of Russia. This has not happened. We did not allow it,” he said. So determined was the West to destroy Russia, he said, that sanctions would have been imposed even without the crisis in Ukraine.

# Rally in airlines helps FTSE edge higher

British blue chips edged higher on Thursday, supported by travel and airline stocks after a number of encouraging corporate updates from the sector. TUI Travel rose 3.7 percent, the top FTSE 100. FTSE riser, after it said profit jumped 11 percent, beating forecasts. Airline easyJet (EZJ.L) rose 2.3 percent, with traders saying sentiment in the travel and leisure sector had been boosted after easyJet and Irish peer Ryanair (RYA.I), which is not in the FTSE 100, both reported higher passenger numbers. Ryanair was up 7.2 percent at all-time highs after lifting its profit guidance.



# Schools, offices shut as typhoon bears down on Philippines

Schools and government offices were shut in parts of the central Philippines on Thursday and residents stocked up on supplies and food, as provinces yet to recover from last year's devastating super-typhoon Haiyan braced for another category 5 storm. Typhoon Hagupit was churning across the Pacific around 860 km east of the island nation on Thursday, the local weather bureau said, packing winds of up to 195 kph with gusts of up to 230 kph. It was expected to strengthen to a category 5 storm before slamming into Eastern Samar province in the central Philippines on Saturday, the weather bureau said. Eastern Samar and the island of Leyte were worst-hit last November by typhoon Haiyan, one of the strongest storms ever to make landfall, which left more than 7,000 dead or missing and more than 4 million homeless or with damaged houses. Local government officials and emergency teams from the Red Cross, army and coastguard were on alert for possible swollen rivers, landslides, flash floods, and storm surges, said Roger Mercado, governor of Southern Leyte province.

# China shares soar over 4%

Chinese shares leaped by more than 4 percent on Thursday, with the benchmark Shanghai Composite Index hitting its highest level since May 3, 2011. The Shanghai index surpassed the psychologically important 2,800-point mark in less than 30 minutes following Thursday's opening. It continued rising and reached as high as 2,900.51 several minutes before closing at 2,899.46, a 4.31 percent increase. The smaller Shenzhen Component Index jumped by 4 percent to reach 10,029.83, surpassing the 10,000-point mark for the first time since June 1, 2012. The combined turnover in Shanghai and Shenzhen stood at 887.51 billion yuan (144.52 billion U.S. dollars), slightly down from 914.9 billion yuan reported on Wednesday. Many analysts view the recent rallies as the beginning of a bullish cycle. Since the beginning of this year, the Shanghai Composite Index has surged more than 37 percent. Since the country's central bank cut interest rates on Nov. 21, the Shanghai index has surprised the market with a 16.6 percent jump.

# Australia playing politics in asylum debate

The Australian opposition has accused the government of using asylum seekers as political pawns in a bid to pass a controversial law affecting refugees. Ministers want the senate to pass a bill tightening asylum laws before parliament rises for the year. Immigration Minister Scott Morrison has offered a series of compromises in the hope of winning support. But senior opposition figure Tony Burke said the government was holding "people as hostages" to get the bill passed. Australia currently detains all refugees and asylum seekers arriving by boat and takes them to offshore camps in Papua New Guinea and Nauru. Critics say the amendment to the bill, which would expand the immigration minister's powers, would let the government remove asylum seekers, even if they are at risk of persecution.



# U.S. Index Futures Little Changed With S&P 500, Dow at Records

U.S. stock-index futures were little changed, after equities climbed to records, as investors weighed prospects for economic growth before data on employment. Futures on the Standard & Poor’s 500 expiring this month added 0.1 percent to 2,075.1 at 10:54 a.m. in London. The gauge rose 0.4 percent yesterday, led by a rally in industrial and commodity shares, as data increased confidence in the economy. Dow Jones Industrial Average contracts gained 25 points, or 0.1 percent, to 17,922 today. “U.S. indexes at all-time highs give confidence to investors across the world,” said Ramiro Loureiro, a Lisbon-based market analyst at Banco Comercial Portugues SA’s Millennium unit. “The Fed believes the world’s largest economy is going to continue on the path of expansion at a time when lower oil prices can support an increase in consumer spending. The issue on the table now is when, and at what pace, interest rates will rise.”

# Nasa's Orion 'Mars ship' set for test flight

A US space capsule that could help get humans to Mars is about to make its maiden flight. Orion will be launched on a Delta rocket out of Cape Canaveral in Florida on a short journey above the Earth to test key technologies. The conical vessel is reminiscent of the Apollo command ships that took men to the Moon in the 1960s and 1970s, but bigger and with cutting-edge systems. Given that this is a first outing, there will be no people aboard. Nonetheless, the US space agency describes the demonstration as a major event. "This is huge; Thursday is a giant day for us," said Nasa administrator Charlie Bolden.

# U.S. conservatives stand firm against funding for immigration order

Conservative Republicans on Wednesday resisted a plan to avert a budget fight over President Barack Obama's immigration order, raising the likelihood that the spending struggle in Congress could last right up to the Dec. 11 deadline for a government shutdown. Tea Party lawmakers stood firm against House of Representatives Speaker John Boehner's plan to pass a spending bill keeping most of the government running through September 2015 and postponing the battle over immigration until early next year, when Republicans take control of the Senate and expand their House majority. That opposition could force Boehner once again to seek Democratic support to pass his spending proposal and avert a shutdown after the government's spending authority expires. Republican leaders are desperate to avoid that after a 16-day shutdown a year ago inflicted heavy political damage on the party. The small but unruly band of conservatives, who have been a persistent headache for Boehner and Senate Republican leader Mitch McConnell, said there was no reason to wait until next year to try to deny funding for Obama's order.