Posted on 13 May, 2012 filed under economic commentary
Weekly Economic Commentary May 13, 2012
Markets
Election week created generalised turbulence in equity markets, with news on JP Morgan’s loss adding fuel to fire. Asian markets had their worst ever week since Nov last year. Regional markets mirrored activity in world markets, with all markets closing lower compared to the previous week, except for Egypt where Presidential elections are ongoing. The Greek uncertainty led to a three and a half month low in the euro alongside a rise in the pound as BoE decided to put QE on hold. Gold prices recorded the biggest weekly drop this year, losing its safe haven status while oil prices were down on slowing Chinese demand concerns.
Posted on 6 May, 2012 filed under economic commentary
Weekly Economic Commentary May 6, 2012
Markets
Holidays in Japan and Labour Day around the world resulted in low liquidity amidst choppy trade in most markets, then at the end of the week data on the weakness of US and European labour markets hit stocks, sending the S&P 500 to its biggest weekly retreat this year after two weeks of gains. Electoral results in France and Greece will be affecting Eurozone markets by tomorrow, likely leading to greater economic policy uncertainty if Socialists regain power in France. Since the bad news came on Friday, regional markets were less affected. Gold benefited from the uncertainty, while oil retreated on renewed concerns for the global economy. The yen gained as a result of the weak data, but other main exchange rates remained broadly stable.
Posted on 29 April, 2012 filed under economic commentary
Weekly Economic Commentary April 29, 2012
Markets
Markets were volatile, though strong corporate earnings results overshadowed the soft data releases, especially the muted GDP growth in US, and the S&P downgrade of Spain’s sovereign debt last Thursday. Regional markets were mixed, with Q1 profits announcements key; many UAE listed companies, including real-estate firms, announced better-than-expected earnings. The US$ weakened on soft US data though the euro held surprisingly strong in spite of the downgrade; the pound, meanwhile, hit a 22-month high against the euro. Gold prices were up and EIA’s announcement that increased Saudi output helped global oil supply exceed demand by 500k bpd in Feb-Mar also led to some minor fluctuation in oil prices.
Posted on 22 April, 2012 filed under economic commentary
Weekly Economic Commentary April 22, 2012
Markets
Markets were volatile and choppy. US Shares rallied for most of the week, buoyed by corporate earnings, while Eurozone worries persist in the background, somewhat alleviated by increased IMF funding of $430 bn. Regional markets were mixed, with Saudi’s Tadawul rising the most from a week ago on strong Q1 profits. Euro had a good week, helped by German IFO & ZEW numbers, while the yen fell on speculation of additional stimulus from the BoJ. Oil price was gliding down while gold posted a weekly drop.
Posted on 15 April, 2012 filed under economic commentary
Weekly Economic Commentary April 15, 2012
Markets
Markets are again on the defensive. Lower Chinese growth rates spooked investors. Regional markets were mixed, with profit taking weighing on exchanges like Saudi while the Muscat Securities Market surged, helped by the banking and services sectors. The euro fell as the spike in Spanish bond yields revived debt concerns in Europe while the dollar gained against the CHF and JPY. Gold prices, which were rallying most of last week, dipped almost 1.5% on Friday after release of China’s Q1 data. Oil prices have been fluctuating within a rather narrow band despite IEA assessment of weaker future demand.
Posted on 8 April, 2012 filed under economic commentary
Weekly Economic Commentary April 08, 2012
Markets
Easter mood did not sedate markets, which were generally weak especially after FOMC minutes reinforced the message that the Fed is not contemplating additional monetary stimuli. It is worrisome that stock markets are again primarily influenced by expectations of central bank liquidity injections like an addict mesmerized by the perspective of another shot, and not focusing on economic fundamentals. Bond markets on the contrary were retrenching to safe havens while spreads on Italian and Spanish bonds widened sharply again. The bad number on US payrolls added to gloom. Regional markets were mostly down, though Oman and UAE outshone their counterparts, buoyed by specific stocks. The combined effect of Fed hawkishness and Draghi remarks on 'downside risks' in Euroland hit the euro and lifted the dollar. Likewise gold tumbled after hopes of QE3 were dashed. Oil was hit by the dollar strength but remained broadly resilient.
Posted on 1 April, 2012 filed under economic commentary
Weekly Economic Commentary April 01, 2012
Markets
After the speech by Bernanke, which was interpreted as an announcement of loose monetary policy and possible QE3, equity markets were marking time, with the mood generally negative especially in Asia. Regional markets were mixed though optimistic sentiment continued in the Saudi bourse, where the index lifted to levels not seen since the collapse of Lehman. The euro rallied against the dollar and the yen after Spain announced budget cuts; also, the GBP rose to a 4-month high and the yen was boosted by its fiscal year-end repatriation flows. Talks by some of the biggest global oil buyers over the possible release of emergency reserves and a ventilated intervention by Saudi Arabia spooked oil prices while gold prices rose.
Posted on 25 March, 2012 filed under economic commentary
Weekly Economic Commentary March 25, 2012
Markets
A tumultuous week for global markets: markets were on a roller-coaster last week, having touched close to 8-month highs, but were spooked by the decline in Chinese manufacturing data only to rebound on Friday. Among regional markets, Saudi and Oman were the biggest gainers as in the latter, talks of a potential merger between HSBC Holdings‟ local unit and Oman International Bank lifted shares. The euro closed at a three-week high against the dollar while gold recorded a fourth consecutive weekly loss, in spite of recording the biggest one-day gain in a month. Concerns about Iran continue to affect oil prices, with Brent closing at USD 125.13 on Friday.
Posted on 18 March, 2012 filed under economic commentary
Weekly Economic Commentary March 18, 2012
Markets
Markets have been choppy in the absence of major macro news and a catalyst which could guide expectations. Even the bank stress tests that were negative for Citigroup and other large US banks had limited impact. Regional markets, except KSA (where the trend points upwards), are caught in the erratic swings. Meanwhile, US Treasury yields moved up on better economic data and a reversal of flight-to-safety flows. Asian currencies were weak against the dollar; however, the higher than expected US inflation data towards end of the week led to a slight decline in the greenback. Tensions regarding Iran continue to impact oil prices; gold is mostly weak, leading to increased buying from central banks.
Posted on 11 March, 2012 filed under economic commentary
Weekly Economic Commentary March 11, 2012
Markets
The upward trend is faltering, due to China which announced lower expected growth for 2012 and the waning of the relief after the Greek deal. Difficult decisions remain on the table with little political appetite or coherence to tackle them. Stock markets were feeble and choppy, with regional markets no different - both the DFM and ADX dipped on profit-taking, with the former registering the largest one-week drop since early March 2011. The euro declined in spite of the swaps agreement while positive US data helped the dollar reach multi-month highs against various currencies (hitting the highest in almost a year against JPY). Oil market halted its run while heavy trading on Friday helped gold regain losses made during the week.