Financial News “Bites” Of The Week Around The World
2012 seems likely to be another year with little trend and high volatility. Markets are driven by the daily headlines and immediate needs which doesn’t provide forward visibility. Global growth uncertainties and on-going sovereign debt concerns in Europe are likely to remain dominant headlines and may affect the markets more than supply and demand fundamentals. It is difficult to make any firm prediction on price trends for the coming months. International prices of many food commodities have softened in recent months. Unpredictable prospects lie ahead given the uncertainties over the global economy, currency and energy markets alongside natural weather and crop variables.
EUROPE: Spain and Italy successfully sold about €22bn of government debts underlining the tentative improvement in investor sentiment towards the Eurozone. For those outside of the single currency the data is actually starting to look a little better suggesting a possible recovery across the world. Global activity in December grew according to the JP Morgan / Markit all industry output index which is derived from surveys of 11,000 purchasing managers in 30 countries.
USA: The USD continues to perform reasonably well .The final weeks of 2011 were the economy's strongest - consumers spent more freely, factories made more goods, Americans stepped up travel and the auto industry enjoyed its best stretch of the year. The Fed noted that some sectors of the economy, notably housing, remain weak. But overall, the message was encouraging, and the unemployment rate fell to 8.5 per cent - the lowest rate in nearly three years. Consumer confidence rose.
CHINA: As it is a political handover year in China, maintaining a strong economy is the driving objective. China has implemented tightening measures to rein in inflation including increasing the amount of money banks must keep in reserve as well as cutting interest rates to keep the economy dynamic. China’s rapid economic expansion slowed to an annualised 9.1% in the three months to the end of September.
INDIA: India’s growth is stalling. Indian Prime Minister Manmohan Singh said economic growth in the fiscal year ending March 31, 2012 would slow further to about 7 per cent, lower than a revised forecast of about 7.5 per cent issued by the government only in December. Domestic challenges coupled with global uncertainties have eroded India’s business confidence. According to market watchers, the rise in interest rates has also had a crippling impact on industry.