Posted on 3 June, 2012 filed under economic commentary
Weekly Economic Commentary 3 June 2012
Markets
Disappointing data across the board - US jobs, growth concerns in China and India - added to the existing fears of a global slowdown and sent equity markets sliding. Ireland’s positive vote on the EU fiscal compact was the only cheerful note for European markets. Regional markets were no different with most markets down with the exception of Oman (it hit a 3-week high after Bank Nizwa’s IPO and almost 11 times oversubscribed). The euro hit a 23-month low against the dollar and fell to its weakest in more than 11 years against the yen (safe haven). Crude oil prices are the lowest since Oct 2011 as worries about weaker global demand led prices tumbling down while gold price rose as investors flocked to safe-haven assets.
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Posted on 27 May, 2012 filed under economic commentary
Weekly Economic Commentary May 27, 2012
Markets
The long Greek journey into the night continues to send shock waves throughout the markets (with additional input from Spain’s Catalonia, after Bankia’s bail-out, needing help to refinance its debts and ongoing banking sector troubles) which have been highly volatile around a downward trend driven by entrenched risk aversion. Regional markets were mixed, with Egypt’s exchange gaining the most amongst its counterparts on domestic elections. The euro hit a 2-year low against the USD on worries about a collapse in Greece and an exit from the euro zone. Oil slumped and gold has lost its allure as a safe haven.
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Posted on 20 May, 2012 filed under economic commentary
Weekly Economic Commentary May 20, 2012
Markets
It was a dismal week for equity investors with all regions affected by the ongoing Greek drama and Spain sub-plot as even the Facebook IPO received only a muted response. Regional markets were not spared either, with Tadawul closing near a 3-month low on Saturday. While the euro continued to be battered, the Indian rupee continues to slide to record lows given its burgeoning current account and fiscal deficits alongside withdrawals by foreign funds. Among commodities, gold was one of the gainers, posting its biggest weekly gain in a month, while crude oil prices slipped.
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Posted on 13 May, 2012 filed under economic commentary
Weekly Economic Commentary May 13, 2012
Markets
Election week created generalised turbulence in equity markets, with news on JP Morgan’s loss adding fuel to fire. Asian markets had their worst ever week since Nov last year. Regional markets mirrored activity in world markets, with all markets closing lower compared to the previous week, except for Egypt where Presidential elections are ongoing. The Greek uncertainty led to a three and a half month low in the euro alongside a rise in the pound as BoE decided to put QE on hold. Gold prices recorded the biggest weekly drop this year, losing its safe haven status while oil prices were down on slowing Chinese demand concerns.
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Posted on 6 May, 2012 filed under economic commentary
Weekly Economic Commentary May 6, 2012
Markets
Holidays in Japan and Labour Day around the world resulted in low liquidity amidst choppy trade in most markets, then at the end of the week data on the weakness of US and European labour markets hit stocks, sending the S&P 500 to its biggest weekly retreat this year after two weeks of gains. Electoral results in France and Greece will be affecting Eurozone markets by tomorrow, likely leading to greater economic policy uncertainty if Socialists regain power in France. Since the bad news came on Friday, regional markets were less affected. Gold benefited from the uncertainty, while oil retreated on renewed concerns for the global economy. The yen gained as a result of the weak data, but other main exchange rates remained broadly stable.
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Posted on 29 May, 2011 filed under economic commentary
Weekly Economic Commentary May 29, 2011
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Markets
Risk aversion is prevailing in most markets waiting for direction at macro level and on major policy fronts primarily fiscal, with the battle on the debt ceiling in the US and in Europe with sovereign crises which last week sunk the euro and the European bourses. Emerging markets meanwhile have rebounded, though regional markets have been down as weak Q1 results played on investor sentiment and led to a three-week low in Dubai volumes. The Yuan went past its previous peak (May 2nd) after the PBoC set a new level for the mid-point and commodity prices continued to rise, with gold surging to a three-week high on softer dollar.
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Posted on 22 May, 2011 filed under economic commentary
DIFC Weekly Economic Commentary May 22, 2011
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Markets
Commodities markets remain a key to development in equity markets as large investors had set up strategies based on a double play hinging on continued global growth. Signs of slowdown in the world economy, the end of QE2 in June and the uncertainty over the handling of fiscal crises in Europe put in question the wisdom of those strategies. Regional markets were mixed with Egypt gaining the most last week as the dollar surged and the euro plunged towards the end of the week. Oil prices were volatile - crude futures fell after the IEA called for increased oil output to tackle the problem of high prices, coming close under the heels of a rally after the US Department of Energy announced that US crude stockpiles had failed to rise as expected in the week to May 13 - while gold prices closed higher at the end of the week.
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Posted on 15 May, 2011 filed under economic commentary
DIFC Weekly Economic Commentary May 15, 2011
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Markets
Stock markets suffered after investment strategies focusing on rising commodity prices were severely hit after oil prices tumbled because of a dollar rally and data suggesting demand was slowing in the US and China, the world's biggest energy users. Oil has recovered since, but stock markets have been weak since last week. Among regional bourses, Qatar surged to a new one-month high on Wed on hopes of a possible index upgrade and Egyptian stocks rebounded on a report of USD debt relief worth USD 1bn for the country. The EUR gained some ground end of last week as expectations rose for an ECB raise while Asian currencies were weak. CNY recorded its sharpest weekly decline in two months as China raised bank reserve-requirement ratios; KRW dropped to a three-week low after Bank of Korea unexpectedly left interest rates unchanged.
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Posted on 8 May, 2011 filed under economic commentary
DIFC Weekly Economic Commentary May 8th 2011
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After hitting multi-year record levels stock markets took a pause which not even the killing of Osama Bin Laden could interrupt. After a brief euphoria investors focused on fundamentals which hardly support bulls. Regional markets were down, with Dubai slipping to a three-week low with volumes at a 15-week low. The dollar rebound, euro continued to decline and CNY passed the 6.5 mark for the first time ever. Oil lost some ground after US inventories data showed robust build up and finished the week $16 lower on demand worries and a move by investors to slash commodities exposures. The same trend hit precious metals: gold declined in volatile trade while silver prices tumbled by more than 10% on Thurs, the biggest one-day drop since 1980.
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Posted on 2 May, 2011 filed under economic commentary
DIFC Weekly Economic Commentary May 01, 2011
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Markets
Stock markets are at a three year high - shrugging concerns on macroeconomic outlook and fiscal uncertainty, cheering buoyant Q1 results in US; the concern remains mainly over the continuation of QE2 and loose monetary policy which was duly confirmed by the Fed and touted in the first interview by Bernanke. On the regional front, markets were mixed: UAE markets rose on strong Q1 earnings but dropped significantly on Thurs following the extension of when brokerages have to switch to the new DvP settlement system. While the dollar index touched three-year lows, both gold and silver broke records as oil closed at $125 per barrel.
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