Archive for June, 2012
(As written for My Paper on 26 June 2012. Click here to enlarge)
Last week, none of the news released can be considered as entirely positive news. Although the conservative party won the elections in Greece, investors were not upbeat as they were aware of the tough challenges that the Euro Zone is facing.
German’s flash PMI dropped from the previous figure of 45.2 to 44.7, which not only reflected the deteriorating demand of Euro Zone, but also the biggest economy starting to contract from the debt contagion.
However, markets have ceased being jittery as before. The slow economic growth and negative investment banks’ outlook due to the worsening quality of their assets have been priced in.
(As written for My Paper on 19 June 2012. Click here to enlarge)
On 6th May, Greece was left with a political stalemate after the general election. This led to another election which took place over the weekend. Yesterday, official projections showed that pro-bailout parties won enough seats to control Greece’s parliament.
There were basically three honchos which led the pack – the New Democracy, Pasok and Syriza.
The New Democracy won 29.8 percent of the vote and secured 129 seats in Greece’s legislature. Anti-bailout party Syriza gained 26.8 percent and 71 seats, while socialist Pasok, with 12.4 percent, gained 33 seats.
(As written for My Paper on 12 June 2012. Click here to enlarge)
Last week, four of the world’s most powerful central bankers turned dovish on the world economy.
On 5th June, Reserve Bank of Australia (RBA) chief Glenn Stevens cut interest rates from 3.75% to 3.5%, its lowest since November 2009.
On 6th June, European Central Bank (ECB) President Mario Draghi met the press and left the door open to a possible rate cut from the current level of 1%. This could be a turning point because the ECB rate has never gone below 1%. However, recent Eurozone news show that inflationary pressures are down and economic activity is weakening.
(As written for My Paper on 5 June 2012. Click here to enlarge)
Last week recorded the fifth straight week of losses for Asian currencies, the longest losing streak in three years.
The biggest loser was the Indian Rupee, which breached the 56 mark against the US dollar several times in May. It has fallen over 6% against the US dollar in the month of May alone, en route to hitting record lows.
Besides the ongoing concerns about Europe’s debt crisis and China’s soft landing, what triggered Asian currencies to hit a 20-month low was last Friday’s horrible Non-Farm Payroll (NFP) numbers by the USA.