13th June 2014 Global Index and Economic Review
Disappointing data out of the US cooled Asian markets at the start of trading as the week looks to close out with a range of economic indicators being released later today.
The Bank of Japan Governor, Haruhiko Kurodas made no new policy changes after a 2 day session of the BoJ. No major policy changes were expected however it is of concern that no real comments have been raised about the Japanese Economy. The Nikkei started the day out trading lower as exposure to risk seemed to be adverse, mainly driven by fears over the situation in Iraq and how war there would affect oil supplies. In afternoon trading the local market picked up turning a pre lunch dip of 0.6% into a gain of just under 1%, closing out the week on a positive note. Data out of China later today, if as forecast, will help solidify the fact that the economy is back on track. Despite Retail Sales being predicted lower Industrial Sales are forecast to be substantially higher. This along with the recently announced stimulus measures for the Yangtze River region should help ease concerns about the Chinese Economy and how they are looking to keep it in expansion. The infrastructure deal announced will see new roads, railways and airports for the region and will help bring the inland provinces closer to Shanghai. It is estimated that the region accounts for almost 41% of China's GDP and expanding the routes into Shanghai will enable more business to grow towards the capital.
Good news continues to come out of Europe at the moment. Industrial Production came in above forecast and was substantially higher than predicted. Year on Year production was up 1.4% as opposed to last month's 0.2% and when looking at month by month basis an increase seen in May of 0.8% rectified the -0.4% of April. This positivity should continue today as the Balance of Trade is announce. This too is forecast to have contracted from April and a €10.9Bn Balance of Trade would have plenty of analysts rubbing their hands. The majority of the markets held flat yesterday, as with Asia they saw a reduction in risk appetite and as with Asia this could roll into today as concerns over Iraq continue to grow. Helping the FTSE stay in the green was the announcement of the Bank of England that they could see a rise in interest rates sooner than initially expected.
Markets in the US had a second day of cooling as poorer than expected data on Retail Sales and Initial Jobless Claims hit the market. As with the rest of the global indexes, concerns over oil supplies helped pull back the indexes as investors in the US looked to lock out some profit. Retail Sales still managed growth however were almost half the forecast figure at 0.3% for May. Initial Jobless figures came in at 317,000, slightly above what was advised however sentiment seemed to go with Business inventories which were at 6 month highs. If the economy continues at this pace it is set to increase by 3 to 4% for the second quarter, much better than the 1% seen for the first quarter of 2014.
Major Indexes as of 13th June:
Index % Change Close/
DOW Jones (-0.65%)
FTSE 100 (+0.06%)
CAC 40 (-0.02%)
Nikkei 225 (+0.83%)
Hang Seng (+0.73%)
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