Markets Archives - Page 439 of 782

Do You Want to Bet Against another Japanese Rate Cut?

Early Tuesday in Tokyo, Japan will announce revisions to Q4 GDP. A downward revision to business spending risks will shave the initial estimate from a contraction of 1.4% at an annualized rate to 1.5%. Regardless, the key takeaway is that the world’s third-largest economy contracted in two of the four quarters last year. Recall initially, the consensus was for a 0.8% annualized contraction in Q4. The anticipated revision means the contraction was nearly twice as much as initially expected.

The Rally in Several Emerging Markets is Looking for Traction

Risk sentiment ended last week on a strong note, and that should carry over into this week. The global liquidity backdrop remains positive for EM, with the ECB widely expected to add more stimulus on Thursday. In a similar vein, the Fed is widely expected to remain on hold until June.

U.S. Jobs Paradox: Shouldn’t Pay Rise as Unemployment Falls?

Unemployment rates have fallen to near full-employment levels, but American workers are not getting a boost to their paychecks. Additionally, American workers are finding they have continually less bargaining power across the United States. Employers, thanks to at will employment laws and an increasing supply of educated labor, are finding it easier to fire “troublemakers” who demand raises, better working conditions, or other incentives to stay happy and productive.

India Manages to Strengthen Ties with ASEAN

The India–ASEAN relationship received a shot in the arm with the conclusion of the 8th Delhi Dialogue on 17–19 February 2016. Since 1991, India has been aggressively pursuing increased trade and strategic relations with Southeast Asian Countries as a part of its ‘Look East’ policy. Now, ASEAN has grown to be India’s fourth largest trading partner after China, the European Union and the United States.

China’s Reserve Ratio Cut and South America’s Woes Top EM News

1) China’s central bank announced a 0.5% cut in the required reserve ratio, 2) Moody’s cut the outlook on China’s Aa3 rating to negative from stable, 3) Argentina and the main holdouts agreed to a debt restructuring deal, 4) Brazilian press reported that a senator implicated both Rousseff and Lula in the corruption probe as part of a plea bargain, 5) Chile is cutting back government spending this year in response to low copper prices

The Week in Review: U.S. Economic Data Turns Sour

A substantial number of economic indicators suggest greater weakness in the American economy, as Americans struggle with rising prices, lower demand, and higher default rates. Jobless claims rose to 278,000, above expectations of 270,000 claims, reaching their highest point in a month, and services demand fell to contraction for the first time since 2013. At 49.7, the services PMI fell to its lowest level since 2010, below expectations of expansionary demand.

UK Indicators Point to Decline, Pound Suffers

A growing number of economic indicators are pointing to worsening economic conditions in the UK, causing the British pound to fall further in value. The services Purchasing Managers’ Index fell to 52.7 in February, according to Markit Economics. The decline follows consistent weakness in services demand throughout the country, and is far below expectations of a 55.1 reading. In January, the PMI reading was called “disappointing” by Markit and several economists, although it was far above current levels at 55.6.

Japan Faces the Long-Term Consequences of the Tsunami

The stillness is most overwhelming. The rubble has been cleared away. The grass has grown back. However, along much of the coastal strip devastated by the tsunami that struck Japan on 11 March 2011, a silence remains.

Global Deflation Signals Persist, Signaling Economic Slowdown

More signs of a deflationary environment are appearing in Europe and Asia, leading many economists to give up on hopes of stronger growth in the near future.

In Japan, the government sold bonds at negative yields for the first time, while ten-year Japanese government bonds fell to negative yields. Despite the fact that bond buyers are now paying Japan for the privilege of lending the government money, the auction had a high turnout and issues were able to sell to cash-rich institutions looking for a place to park capital.

We All Live in an Expensive Submarine

Australia’s future submarine program is the largest and most complex defence procurement in the nation’s history. While technical issues to establish the ‘best’ submarine remain important, strategic, political and economic factors are key to Australia’s decision. The deal could have a significant impact on Australia’s regional relations and its ability to act independently within the region.