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Our Big Mac index shows fundamentals now matter more in currency markets

Our Big Mac index shows fundamentals now matter more in currency markets

Finance
IT IS usually considered quaint to predict foreign-exchange movements by reference to whether currencies are dear or cheap. Metrics such as The Economist’s Big Mac index, a lighthearted guide to exchange rates, hint at how far currency values are out of whack. But they are often driven further out of kilter by capital flows, by fear and greed, by the interventions of policymakers, and so on.Since our last look at the index in July, cheap currencies have narrowed the valuation gap against the dollar—almost completely in case of the Canadian dollar (see chart). Fundamentals, such as fair value, seem (at last) to have greater sway in the foreign-exchange market.Upgrade your inboxReceive our Daily Dispatch and Editors' Picks newsletters.The index is based on the idea of purchasing-power parity
UK stock markets close at a record high

UK stock markets close at a record high

Business
UK stock markets climbed to new highs on the final day of trading for 2017.Both the FTSE 100 index of leading blue chip companies and the FTSE 250 reached new records at the close of trading. US stock markets have also hit new peaks over the year, helped in part by Donald Trump's sweeping tax reforms. Stephen Eckett, author of the annual Harriman Stock Market Almanac, said: "All the dangers that were anticipated with a Trump administration haven't materialised."The FTSE 100 finished up 7.6% at 7,687.77 compared with the last day of trading in 2016. Meanwhile, the FTSE 250 ended 14.7% ahead at 20,726.26 compared with the end of last year.Mr Eckett said: "It has been a little bit of a surprise to many people that markets were are strong as they were this year."George Salmon, an equity analy...
FTSE 100 hits new high as markets reopen

FTSE 100 hits new high as markets reopen

Business
The FTSE 100 has climbed to a fresh record high as UK markets reopened after the Christmas break.London's leading share index rose to 7632.7 during Wednesday trading, advancing from all-time highs achieved last week to extend the market's so-called "Santa rally".It ended the session at 7620.7, 28 points up on its opening mark and a new closing high.The rally was supported by an upturn in copper and other commodity prices, which helped to lift global mining giants including Fresnillo, Antofagasta and Glencore.Demand for commodities implies optimism about the outlook for rapidly advancing world economies such as China.Greg McKenna, chief strategist at AxiTrader, said: "The rally in copper supports expectations that 2018 is going to be a strong year for synchronised global growth."Other world...
MidEast Stocks Narrowly Mixed In Low Volume as Many Markets Close for Holiday

MidEast Stocks Narrowly Mixed In Low Volume as Many Markets Close for Holiday

Finance
Shutterstock photoMiddle East shares were narrowly mixed but volume was low with markets in the United Arab Emirates, Kuwait and Egypt closed for public holidays.Saudi Arabia's index firmed with investors hopeful the country's anti-corruption crackdown is fading. A Reuters poll of leading Middle East fund managers were on balance positive about the country and almost half plan to raise their allocations to Saudi stocks in the next three months and none to reduce.Qatar's index slipped with index compiler MSCI's planning to announce early next week whether it will switch to using offshore currency rates to value Qatari equities - a step that could potentially decrease their weightings in MSCI's emerging market index, Reuters said.In company news, Retailer United Electronics said it launched ...
Criminals worry as dark net markets disappear

Criminals worry as dark net markets disappear

Technology
Four of the largest criminal marketplaces on the dark net were unreachable on Friday, prompting speculation about police activity.All four marketplaces - the Dream Market, the Trade Route, the Tochka Free Market and the creatively named Wall Street Market - allowed anonymous users to trade illicit goods in cryptocurrencies.It is not unusual for such marketplaces to disappear with their customers' cash, which they often hold as an escrow service, but the fact that the four largest have vanished simultaneously has provoked interest.Users of dark net discussion forums on the open web have warned that the sites could be targeted by a Distributed Denial of Service (DDoS) attack - a way of forcing websites offline."Whether or not it's law enforcement carrying out the attacks is another question,...