Global Economic Update - Beginning of October 2014

Oct. 7, 2014 - PRLog -- Hexagon Capital Management is a privately held wealth management company that manages hundreds of client assets in a wide range of products and services with a non biased, client orientated program that is tailored to each individual or corporate requirement.

Global Economic Update - Beginning of October 2014

Markets globally are tentative today after a strong end to last week saw a weaker than expected continuation yesterday.

Asian indexes managed to reverse early loses this afternoon as expectations that the Bank of Japan will keep its policies the same as the Yen currently loses weight against the Dollar. The head of the BoJ stated that although their current economic performance is less than satisfactory, a weaker Yen will help improve the economy as it is seen to entice more orders from the US and Europe when it is weaker.

In China, markets managed a respectable day as they looked to rebound from the loses seen late last week when the Student Protests started on the streets of Hong Kong. This comes a day after the World Bank again revised down its forecasts for China's GDP growth for the next 3 years. Expecting a drop from 7.6% to 7.4% in 2014 and a drop from 7.5% for both 2015 1nd 2016 to 7.2% and 7.1% respectively  has caused much concern for the local government as they strive to implement policies that assist their growing middle class into becoming the driver of their economy.

After last week's announcement by the ECB that it will start its ABS buying program later this month the European markets have had little to cheer about since the news. With a benchmark rate of just 0.05% and a target of 2% being unachievable in the near future the European Central Bank had no other options but to add to its exisiting scheme and look to purchase Asset Backed Securities in a move very similar to the US's Federal Reserve. The President of the ECB, Mario Draghi said that they would look to extend their balance sheet from €2tn to €2.7tn over the next year. Many analysts feel this is an unwise move as it was securities like ABS's that caused the crisis back in 2009.

In the US markets took a step back yesterday as investors locked out some profit ahead of what could be a very interesting earnings season. With the US economy seen as expanding at a decent clip so far in the middle part of the year many are now concerned about economies such as Europe and Asia where strength is not being seen. Many large multi-nationals will be reporting earnings over the next weeks and it will be very interesting to see how they have been affected not only by geo-political issues but by the poor economics coming from other countries.

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