There is no secret that Britain is doing it tough. It is a logical step for Britain to strengthen economic ties with India. Britain has a huge budget deficit and has embarked on tough austerity measures. British GDP growth is expected at 1.2 percent for the year. India by comparison is facing 8.5 percent growth.

Prime Minister David Cameron is looking for Britain to strengthen economic ties with India. India was a former British colony and the major common ground is cricket in modern times. The United States is the largest investor in India, mainly in IT, software and business services. Cameron intends to change all that as he leads a trade delegation to India that dwarfs any since India’s independence.

India has been a standout recovering from the financial crisis and leading the way in innovation in many industries. Millionaires in India along with millionaires in China and Brazil are out pacing Europe. These are the pillars of the BRIC group of nations. Russia is the fourth. Britain is looking to increase trade ties and stimulate economic growth in new areas as the Euro debt crisis bites. Britain has called for action on the stalled free trade agreement between India and the European Union. The BP oil spill in Gulf of Mexico has not helped American ties so the obvious move is the emerging nations. This is what we have seen as Britain moves to strength economic ties with India.

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Oil and stock investors alike always anticipate Exxon Mobil Corp earnings. They did not disappoint, Exxon Mobil beat the earnings forecast on both improved refining production and an improved oil price.

Key Points from Exxon’s Profit

• Oil and gas output in Q2 rose 8 percent

• Business and consumer demand has picked up for both diesel and gasoline.

• Crude oil prices have risen over 30 percent from a year ago.

• Gas production showed robust growth, boosted by Exxon's liquefied natural gas (LNG) projects in Qatar, Exxon said.

Profit beats expectations

Exxon Mobil’s second quarter profit excluding items came in at $7.56 billion or $1.60 per share. This compares to $4.09 billion or 85 cents a year ago.

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Weak June durable goods worry an overly pessimistic market with double dip recession concern. U.S. manufactured goods were weaker than expected for June. The fall was the largest fall since August 2009. It was also the second month of declines. Given all the negative subplots that have hampered consumer and business sentiment the report isn’t really a surprise. Higher expectations were based on Boeing orders.

The U.S. Commerce Department announced June durable goods orders fell 1.0 percent. This was after they a revised 0.8 percent fall for May from a previously reported 0.6 percent decrease.

Reuters forecasts indicated durable goods orders were expected to be up 1.0 percent in June.

'Caution should always be applied to the Durable goods report it is notorious for large monthly swings. There tends to be too much weight put on certain components, which don’t always materialize. Case in point commercial aircraft orders were expected strong, they were not and the result is negative.

Highlights

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Bank of Japan has no specific yen levels targeted a policy board of the bank said. BOJ policy board member Hidetoshi Kamezaki said the bank will not decide policy around specific currency levels. Brokers and analysts have been calling for BOJ intervention for over 18 months since 100 dollar yen was broken. They continue that mantra that the BOJ does have specific Yen levels targeted. They continue to hype the speed of the Yen’s rise but in reality it has been stable relatively to violent moves in the Euro, British Pound and the Australian dollar.

Concerns about Japan’s economic recovery continue given Japan’s dependence on export growth. Export growth is expected to stall in the fourth quarter due to the high Yen. The high yen impacts export competitiveness. Government stimulus measures are also set to end in Q4.

Kamezaki did sound out euro weakness against the yen as a potential threat to the economy. Dollar yen is currently around 88.00 yen. Euro Yen is around 114 yen. A fall below 85 yen would put added pressure on export pricing. The BOJ is limited in being able to cut short-term interest rates lower. Any intervention is likely to be verbal intervention. It is important to note the Ministry of Finance is responsible for deciding currency policy and forex intervention. The BOJ facilitates the trades.

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The Gulf of Mexico oil spill costs BP $32.2 billion it was announced in the companies second quarter earnings. BP PLC announced a loss of $17 billion for the second quarter after it took a $32.2 billion charge Gulf of Mexico oil spill. BP did see improved refining and marketing results as profits tripled from a year ago. BP was able to benefit from an improvement in international refining margins coupled with Chinese ‘record sales volumes’ for petrochemical products. BP said ‘the petrochemicals business was able to capture the benefit of demand recovery, particularly in China through high reliability.'

BP also confirmed that the face of the BP oil spill CEO Tony Hayward would be replaced by Bob Dudley, Dudley is an American and this will be a seen by many as putting an American face on BP. BP’s image has taken a beating since the oil spill which is now the largest in US history. BP also warned that they expected seasonal declines in refining margins for the third quarter. The Gulf of Mexico oil spill costs BP $32.2 billion clearly have threatened BP’s future and the company’s market cap has taken a beating.

BP Refining Operations

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