Global Economic Review -Weekly Update 3/9/2014
Asian markets rallied off positive news in China and the US and Europe looks set to continue the trend with the main markets expected to open slightly higher along with the US indexes later today.
China's non manufacturing PMI for its services sector saw an unexpected increase over July just before data is release next week on the Balance of Trade and Import and Export data. China's official Services PMI came in at 54.4 with HSBC's just under at 54.1. This buoyed the markets to 1% and close to 2% gains on the Shanghai Comp and Hang Seng index's.
Imports are expected to have reduced on July, forecast at +10.7% with Exports fairing much better, returning back to growth al be it at a marginal +0.2%.
Anticipation in Europe should keep the markets positive as we are just one day away from the ECB's key decision on interest rates. The meeting being held in Frankfurt tomorrow is expected to underline the next phase of the ECB's stimulus plan for the Eurozone however it may be too soon for Mario Draghi to be announcing specific details of their possible asset buying program yet the fact that the issue is in the spot light should lead to some strong comments from the European Central Bank Chief before the end of the week.
With the majority of European members seeing a stagnant economy and the far reaching effects of the crisis in with Russia starting to become more significant, this has been touted as one of the most critical times in the EU's fragile financial history.
US markets continue to shirk geopolitical tensions and keep close to their record breaking highs. The Dow above 17,000 and the S&P 500 staying above 2,000 implies an economy impervious to the situations in Europe, the Middle East and Asia. This was backed up by the ISM's Manufacturing Activity Index score released yesterday. Coming in at 59.0 it was at its highest since March 2011 and was seen as a possible sign of an interest rate increase sooner rather than later.
One of the key issues in the US at the moment is employment and by the end of the week we will have a whole range of data on the employment sector which will give a better indication as to the health of the market and the future of the economy.
Key Market Data as of 3/9/2014:
Hang Seng: 25,217.59 (+1.89%) Nikkei 15,728.35 (+0.38%)
Dow: 17,067.56 (-0.18%) S&
FTSE: 6,829.17 (+0.06%) Dax: 9,507.02 (+0.30%)
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