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September 2012

Prospects Daily: European stocks slipped on Friday with the benchmark index falling to a three-week low

Financial Markets…European stocks slipped on Friday with the benchmark index falling to a three-week low as early optimism on Spain’s new austerity measures was short-lived.

Spanish 10-year bond yield rose back above 6% amid uncertainty over its troubled banks before stress test results, fading optimism on the country’s debt cutting plan, and a looming Moody’s rating review which may cost the country its investment grade rating. 

Prospects Weekly: Latest bout of G3 monetary stimulus is likely to increase capital flows to developing countries

The latest bout of G3 monetary stimulus is likely to increase capital flows to developing countries, but may be limited by lingering economic uncertainty, and lower interest rate spreads. Notwithstanding the recent easing of financial market tensions, the anticipated rebound in real-side activity is lagging behind.

Prospects Daily: US GDP growth for Q2 revised down to 1.3%, Chinese industrial companies’ profits continue to decline

Financial Markets…Credit-default swaps on Spanish government bonds tightened 9 basis points to 393 bps today, gearing for their biggest monthly and quarterly drop. They are down sharply compared with 518 in August 31 and peak level of 640 reached in July 24.

Global corporate bond sale posted $949 billion in Q3 of 2012, bringing year-to-date volume to $2.9 trillion, the fastest pace since 2009. Borrowers have been taking advantage of record low borrowing costs amid unprecedented investor demand.

Prospects Daily: Credit risk on European government and corporate debt rises...French consumer confidence falls in September

Financial Markets…Credit risk on European sovereign and corporate debt climbed as Spain’s political and banking-sector woes prompted concern over the region’s worsening debt crisis.

Credit-default swaps on 15 European governments rose 7 basis points (bps) to 142 with Spanish swaps jumping 23 bps to 390. And contracts on of 50 mostly speculative-grade European firms climbed 24 bps to 575.

Prospects Daily: US home prices rise in July...Brazil's current account deficit narrows in August

Financial Markets… Spanish and Italian government bonds fell on Tuesday after their new debt sales. Spain’s 2-year bond yields rose as much as 12 basis points (bps) to 3.23% in morning trade, and comparable Italian yields climbed 7 bps to 2.32%. In contrast, German 10-year bunds advanced for a second day, sending yields to the lowest level in two weeks.

Prospects Weekly: The looming US “fiscal cliff” is one of the main downside risks to the global economy in 2013

The looming US “fiscal cliff” is one of the main downside risks to the global economy in 2013, with Latin America and East Asia and Pacific to be among the most affected if it materializes.

Prospects Daily: Stocks and commodities declined on Monday...German business sentiment dropped for a fifth successive month in September

Financial Markets… Global financial markets started the week on a weak note, with stocks and commodities declining, as disaccord among European leader over measures to stem the debt crisis and signs of deepening economic slowdown in Germany dampened investors’ risk appetite.

The benchmark MSCI world stock index fell 0.5% in morning trade, with Asian and European shares slipping 0.4% and 0.5%, respectively. The S&P GSCI index of 24 commodities fell 0.1% as oil prices faltered 1.3%.

Prospects Daily: Colombia's economy grows 4.9% in Q2...India cuts withholding tax on foreign-currency borrowing

Financial Markets…Safe-haven government bonds moved slightly lower on Friday as investors turned bearish amid Spain bailout speculation and growing inflation concern. Yield on 10-year Treasuries edged up 2 basis points to 1.78%, and German 10-year yield rose 1 basis point to 1.58%.

Prospects Daily: Euro Area business activity contracts... China’s PMI edges up

Financial Markets… Following sluggish Asian stock markets, which dropped from 4-month high, European equities, fell for the third time in four days on Thursday. U.S. stock-index futures declined as well, pointing to that the S&P 500 Index will open lower.

Oil prices weakened for a fourth consecutive day, falling below $91 a barrel, after high U.S. oil stock piles and weak global economic data signaled fuel demand may be easing.

Prospects Daily: European shares fell for a second day and the euro weakened...Turkey cut the ceiling on its interest rate corridor by 150 basis points

Financial Markets…European shares fell for a second day and the euro weakened on Tuesday, leading a broader decline in risky assets as growing concerns over Spain’s apparent reluctance for a international bailout,  and growing conflicts between China and Japan unnerved investors.

Taking their cue from slipping Asian markets, European benchmark stock index continued to decline from 14-month highs reached last week following the announcement of the Federal Reserve’s third round of quantitative easing.

Prospects Daily: European stocks slide from a 15-month high, India keeps rate steady over inflation concerns but cuts reserve ratio to support economy

Financial Markets… Investor sentiment turns more cautious on Monday following last week’s global stock market rally. European stocks slide from a 15-month high and the euro snapped a four-day rally, and Spanish 10-year bond yields rose 15 basis points to 5.93% on renewed concerns over as European debt crisis.

Prospects Daily: High-yielding assets from stocks to commodities rallied

Financial Markets… High-yielding assets from stocks to commodities rallied while the dollar dipped further to a four-month low versus the euro on Friday after the Federal Reserve announced a third round of quantitative easing in an effort to spur economic growth. The Fed said it would make open-ended purchases of $40 billion of mortgage debt per month.

Prospects Daily: US unemployment claims rise, Russia raises policy rate

Financial Markets…The dollar tumbled to seven-month low against the yen and global equities subdued in cautious trading on Thursday as investors awaited a statement by the Federal Open Market Committee later in the day. The greenback suffered from expectations for a third round of quantitative easing.

Stock market investors curtailed some of their resurgent risk appetite as the Fed statement is also expected to signal a weak U.S. economy. Higher-than-expected jobless claims in U.S. also weighed negatively on investor sentiment.

Property rights and investment activity: A page from the Zimbabwe diaries

Jamus Lim's picture

In 1999, Zimbabwe initiated a series of economic reforms that were designed to greater empower the indigenous population of the country, as well as correct for inequities in the distribution of the economic resources held by the population. Whereever one may stand on the broader merits of the policy, the economic consequences are amply clear: Beginning in 2000, output and investment contracted sharply.

World Bank published latest commodity prices: September 2012

John Baffes's picture

In August 2012, energy and precious metals prices increased by 7.8% and 2.8% respectively.    Non-energy prices declined 1.5%.  Food prices remained virtually flat, beverages fell marginally, raw materials dropped by 2.9%, metals down by 4.4% and fertilizers were up slightly.  The US dollar depreciated 1% against the euro and 0.9% against a broad index of currencies.