Tag Archives: Europe

morning-coffee

IMF Cuts Global Growth Outlook For 2014

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: U.S. Core Durable Goods @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

IMF Cuts Global Growth Outlook For 2014

The International Monetary Fund has downgraded its global growth forecast for 2014 based on a weaker than expected first quarter, most notably in the U.S. and a less optimistic outlook for several emerging markets. The global economy is expected to expand 3.4 percent this year, a decline of 0.3 percentage points from April’s estimate, but still an improvement from 3.2 percent in 2013.

The IMF cut its 2014 growth outlook for the U.S. by 1.1 percentage points to 1.7 percent on the basis that while a rebound is underway, it is only expected to provide a partial offset to the weak first quarter outcome given a muted recovery in investment. The U.S contracted at an annual pace of 2.9 percent in the first three months of the year, the sharpest decline in five years, owing to a weak housing market, a slower pace of restocking by businesses and lower exports.

Growth in the euro zone is expected to strengthen to 1.1 percent, from a 0.4 percent contraction last year but the recovery will remain uneven across the region, reflecting continued financial fragmentation, impaired private and public sector balance sheets, and high unemployment in some economies. The IMF downgraded its overall growth outlook for emerging markets to 4.6 percent, from an earlier 4.8 percent and down from 4.7 percent in 2013. With somewhat stronger growth expected in some advanced economies next year, the IMF maintained its 2015 global growth forecast of 4.0 percent.

IMF

Japan Inflation Slows In June

Japan’s inflation slowed in June, highlighting the task the bank faces in reaching the bank’s target. Consumer prices excluding fresh food rose 3.3 percent from a year earlier after a 3.4 percent gain in May. The increase matched economists’ projections. Kuroda has said inflation will ease in coming months before accelerating later this year toward the BOJ’s 2 percent goal, which strips out the effects of a sales-tax increase in April. As the impact of the yen’s slide on prices fades, some economists say the central bank may add stimulus should price gains drop below 1 percent, a level Kuroda forecast they wouldn’t break. The BOJ estimated the 3 percentage point increase in the sales levy added 2 percentage points to core inflation in May. The yen has strengthened about 3.5 percent against the dollar this year after a 18 percent decline in 2013 raised prices of imported energy and other goods. The Japanese currency rose 0.1 percent to 101.76 while the Topix index of stocks rose 0.4 percent to extend its weekly advance.

Gold Heads For Second Weekly Loss On Strong Data

Gold retained sharp overnight losses to trade near a five-week low on Friday and headed for a second straight week of losses as strong global economic data offset the metal’s safe-haven appeal. Gold’s decline despite tensions in the Middle East and Ukraine does not fare well for prices in the short term, especially as physical demand in Asia is sluggish. Spot gold was little changed at $1,292.10 an ounce after losing nearly 1 percent on Thursday. The metal hit $1,287.46 in the previous session, its lowest since June 19 before recovering slightly. Gold has lost 1.4 percent of its value this week. Gold came under pressure after data on Thursday showed the number of Americans filing new claims for unemployment benefits fell to the lowest level in nearly 8 1/2 years last week, suggesting the labour market recovery was gaining traction.

Gold

That sums up today’s highlights! Don’t forget to keep in touch with us via our Facebook, Twitter, Google+ & LinkedIn pages for all the latest trading developments of the day. We hope you have a profitable day on the markets.

 

Not a Banc De Binary trader?

Sign In
European Central Bank

Euro Stoxx 50 Rises as Draghi Boosts Confidence

The European region is currently enjoying its fastest growing rate since 2002 as virtually all stocks are seen rising in the Europe’s biggest rally in 19 months.

After reaching its 2013 low in June, the Euro Stoxx 50 Index (SX5E) has risen 21 percent with only thee stocks not showing increase. Companies across the board are recording gains with expanding prospects as the longest-ever European recession comes to an end. The pledge of European Central Bank’s President Mario Draghi to protect the euro as recovery takes hold has further boosted investors’ confidence in the economy of the region.

The Euro Stoxx 50 increased 0.7 percent to 3,038.96 yesterday, closing at 2 1/2-year high and a 15 percent overall improvement for 2013. The measure has taken its worse hit of 35 percent between February and September 2011 as the debt crisis that forced five countries to accept a bailout worsened.

Not a Banc De Binary trader?

Sign In
Mario Monti's Departure

Super Mario’s Departure

Leave a reply

The recent resignation of Italy’s Prime Minister Mario Monti is seen by many as a massive blow to the eurozone’s rehabilitation efforts. The man, often referred to as Super Mario, was for a long time the favorite technocrat of the austerity-minded European countries. Monti’s untimely departure might delight some Spanish and Greek politicians who struggle to keep their countries afloat in the face of tough austerity measures, shrinking work-forces and dwindling cash flows.

Where goes Italy, there usually goes Spain. If Italy’s new leadership is not interested in imposing Monti’s formula, then it is likely that Italy and subsequently Spain will falter and bring down the economic union. This might also mean that the anxious northern creditors will never be paid back in full.

Monti’s realism coupled with an understanding of southern European fiscal mentality might come haunt the Eurozone protagonists who wish to keep the zone together at any cost. Monti famously observed that “not all Greeks are ready to do whatever is necessary to stay in the euro”. Monti’s words might indicate that Greece, together with Spain and possibly Italy will form a pact to oppose tough austerity measures promulgated by northern European creditors.

Monti’s resignation came as a consequence to an announcement by Silvio Berlusconi’s People of Liberty Party (PDL) that the party no longer supports Monti’s government. The bombastic Berlusconi who has been embroiled in sex scandals, pronounced that he will be leading PDL into the next election in early 2013.

Not a Banc De Binary trader?

Sign In
The Euro

The Euro Is Here To Stay

Leave a reply

The current British foreign minister William Hague once described the euro as a burning building with no exits. Hague’s words still sound prophetic even though the eurozone’s house of cards is still standing. Perhaps the biggest flaw in the monetary union is the political union which preceded it and ultimately became a hindrance. For the euro visionaries, the political harmony and stability of the continent comprised the underlying drive for all the unions that followed; a cause célèbre for the generation that witnessed the horrors of World War II.

The idea to impose standardised monetary rules and regulations on European countries that are fundamentally different in terms of policy, efficiency, nature of workforce, purchasing power and other variables, has proven to be difficult and probably impossible.

Whether technocrats like Mario Monti or idealists like Francois Hollande, Europe will suffer from a self-imposed straight jacket which is also partly to blame for the sheer anarchy in Greece. The economists and policy makers in Europe have failed to grasp that culture determines a country’s success. Greeks are not Finns and certainly not Germans. Treating the south as north works on paper and in the numerous memos circulated in Brussels, but putting lipstick on a pig doesn’t change the fact that at the end of the day the pig is still a pig.

The euro will survive because European policy makers want it to survive. The euro has remained stable for the past years due to political will. However, investors should remember that the euro is the tail wagging the dog.

Not a Banc De Binary trader?

Sign In