Thungen Financial 17th June 2014 - Main Global Economic and Market Update
Major market bourses were mixed yesterday and today as Europe looks to open lower on concerns over natural gas supplies from the Ukraine and oil reserves from Iraq.
Asian markets were mixed today as oil stayed close to 9mth highs during intraday trading. Last week saw $107.68 on Friday and today's Asian markets saw the cost per barrel drop slightly to $106.78. With little in the way of economic data for the region over the next few days local indexes will most likely been cautious as they await further news on what is happening in Europe and the Middle East. The Nikkei was the most positive today seeing small gains as the region looked to avoid risk and lock out some profits after what was a bumper last few weeks.
Europes main concern at the moment will no doubt be the Ukraine and the fact that Moscow has finally shut the Ukraine's natural gas supplies. The disputed $4.5bn reportedly owed to the Russian energy giant is still one of the major issues for the region and is being used as a huge bargaining chip on a table that doesn't seem to acknowledge it. The implications of the taps being turned off will not be felt over the next few months however it is most certainly on the minds of several Eurozone countries. With continued fighting between separatists and local forces the crisis is far from being resolved and looks to be the key issue many European leaders are too scared to discuss in earnest. Despite this, the markets though down on last week are still holding gains seen previously and the general sentiment in the EU is that the economy is expanding and business is getting back up to speed. If energy issues can be averted, the EU will continue to move from recovery to expansion as predicted.
The US markets kept it positive yesterday and posted gains as the rest of the world kept it cautious. With all three of the major indexes keeping it green the main question will be whether the same can be said for today. News from the IMF that they have downgraded growth forecasts for 2014 from April's 2.8% to 2% after May. One of the main issues they see is the disparity of wages and the fact that the minimum wage simply is not high enough. At its current rate employment is seen to be at full capacity by 2017 unless changes to wage levels are introduced. Even with a downgrade, the IMF still forecasts a 3% growth in the economy for 2015 which for a developed country like the US is acceptable. Today may see some profit taking as investors look to pull away from risk and look for non energy related vehicles. The price of oil could well brake $110 in the near future yet many analysts believe that this will be where it would stay till further decisions are made about Iraq and what the west will choose to do about the renewed activity by insurgents.
Asian Markets as of 17th June 2014:
Nikkei 14,975.97 +0.29% SSE Comp. 2,066.27 -0.95% Hang Seng 23,195.17 -0.45%
ASX 5,380.70 -0.18%
European Markets as of 17th June 2014
FTSE 6754.64 -0.34% Dax 9,883.98 -0.29% CAC40 4,510.05 -0.73%
BEL20 3,141.83 -0.59% Zurich SMI 8,663.59 +0.11% MICEX 1,499.11 -0.44%
US Markets as of 17th June 2014
S&P500 1,937.78 +0.08% Dow Jones 16,781.01 +0.03% NASDAQ 4,321.11 +0.24%
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DISCLAIMER The views, opinions, findings, and conclusions or recommendations expressed on this service are those of the author(s) and do not necessarily reflect the views of the Thungen Financial Advisors. All market data within this release is for your general information and enjoys indicative status only. Thungen Financial Advisors does not accept any responsibility for its accuracy or for any use to which it may be put. All share prices and market indexes delayed at least 15 minutes. 52 week high and low values are calculated from close price data.