Posted on 21 August, 2011 filed under economic commentary
DIFC Weekly Economic Commentary August 21, 2011
Markets
As soon as the stock markets had regained some stability and a holiday mood prevailed, German GDP data were a cold shower. This was followed by a dramatic slide towards the end of the week, with recession fears weighing high on investors' mind. Regional markets were mostly down, with Oman and Qatar closing a tad above a week ago; Saudi market fell the most in two weeks when it opened yesterday. The Chinese Yuan rose to its highest ever against the greenback as the PBoC set a fifth straight record-low dollar/Yuan reference exchange rate while the Swiss Franc continued to rise desspite curbs by the SNB and the Yen's rise adds pressure on Japanese exporters. Demand for the safest assets sent the price of gold closer to $1900 per oz.
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Posted on 14 August, 2011 filed under economic commentary
DIFC Weekly Economic Commentary August 14, 2011
Markets
Volatility is king and mood swings have produced a roller-coaster of most stock markets indices. The US downgrade has been largely discounted in asset prices and no longer the critical factor; rather, recession fears predominate and drive investor strategies. Heightened risk aversion is the dominant factor and is not going to disappear for a while. Regional markets were mostly subdued and oil followed the gyrations of stocks, but has been mostly weak on expectation of an impending double-dip recession. The Swiss franc had been rallying amidst volatile markets, but fell on speculation that the Swiss National Bank might take further measures to weaken its currency. Gold price touched $1800 per oz last week, though retreated following a short rally in equities on Friday.
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Posted on 7 August, 2011 filed under economic commentary
DIFC Weekly Economic Commentary August 07, 2011
Markets
The US debt deal had temporarily lifted the markets’ mood, but increased probability of a double dip, the S&P US downgrade and the European debt/fiscal crisis caused the most severe global equity downturn since 2008, leaving almost no markets untouched. Finance ministers from the G7 major economic powers are holding emergency talks on how to calm the markets before they reopen on Monday. The regional markets are likely to see the impact hit this week - mirroring Saudi Arabia, which recorded the largest intra-day loss since last March on Saturday. Regional markets plummeted on opening today, with the DFM dipping close to 5% in early trading before paring losses and recording a 3.7% decline at close; both Abu Dhabi and Qatar's indices tumbled 2.5%. To make a comparison, DP World which is listed on Nasdaq Dubai shed 7.1% today and on the London Stock Exchange fell 14% during Thur-Fri last week. As the safe-haven demand continued to rise, both the Bank of Japan and Swiss National Bank took steps to halt currency appreciation while Asian currencies posted their biggest weekly decline since Nov, led by the Malaysian Ringgit and Indian rupee. Meanwhile, gold prices continued to surge.
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