The prospects of European Central Bank corporate-bond purchase weighed negatively on the euro and boosted European shares. The shared currency weakened against most of its 16 major counterparts as the ECB started to buy covered bonds and the private-sector report suggested that the ECB is considering expanding stimulus by purchasing corporate debt to bolster the euro-zone economy. Meanwhile, the Stoxx Europe 600 stock index advanced 2.1% in afternoon trading after falling to its lowest level of 2014 last Thursday.
Portugal led a sell-off in euro area’s high-yielding government bonds on Monday amid increased recession fears. The Portuguese 10-year bond yield soared 15 basis points (bps) to 3.46%, while the comparable Italian bond yield jumped 10 bps to 2.6%, extending last week’s rise of 17 bps. Greek bonds declined as well, extending losses that triggered a sell-off in the periphery last week. In contrast, safe-haven German bunds advanced, with the 10-year yield sliding 2 bps to 0.84%.
|Remittances to developing countries are on course for 5.0 percent growth this year, faster than the 3.4 percent growth recorded in 2013. The acceleration is driven largely by expanding flows to Asia and Latin America. Remittances to developing countries are expected to continue climbing over the medium-term, reaching $454 billion in 2015. The cost of sending remittances is falling, but remains high along key corridors, especially to countries in Sub-Saharan Africa.|
Developing-country stocks and currencies tumbled on Thursday amid deepening worries over slowing global growth. The MSCI emerging market stock index slumped 1.2% with Indian shares dropping to a 2-month low, while the benchmark gauge that track 20 developing-country currencies fell 0.6% with the Russian ruble sliding to a fresh record low. Oil prices continued to decline as well with West Texas Intermediate (WTI) crude fell below $80 a barrel for the first time since June 2012.
High Income Economies
China has been pursuing a comprehensive program of structural reforms since November 2013. The program aims to rebalance the economy from its reliance on investment toward consumption.