Concerns about the state of the Chinese economy held under tension in global financial markets last week. The country remains in the spotlight, with the US Federal Reserve, which must decide whether to raise rates in September. Worries about the economic future of Beijing shook stock markets, commodities and currencies. “China, which was at the epicenter of events last week, will be the center of attention in this, as markets still trying to determine whether the worst of the sell-off has passed», told Reuters Philip Shaw, chief economist Investec.
The week ended with a decline of shares and an increase in oil and the dollar. Oil rose for a second day on Friday to finish the week with the largest increase in the price of four years. The price of US light crude oil rose above 6% for the appreciation of petrol and air attacks in Yemen. Raw materials rose by 16% in two days, which is the second largest two-day growth for the past 25 years. Brent climbed over 14% in the last two trading days. US light crude and Brent ended the week at the price of 45 and 50 dollars per barrel.
According to some investors, market volatility triggered by concerns about slowing growth in China may force the US central bank to wait with the increase in interest rates. In the middle of last week the president of the Federal Reserve Bank of New York William Dudley said that the prospect of raising interest rates in September already “seems less compelling” than compared with a week ago, given the threat to the US economy from recent market turmoil. However, he left the door open to raising interest rates at the next meeting of the US central bank on September 16 to 17.