Investor anxiety is definitely growing around the world, but the question is will it also hit the United States. Japan's faith in the radical reforms of Abenomics is failing, while China's growth is slowing. Latin America is also a mess - from Brazil's massive corruption scandal to Argentina's efforts to turn around its government. The mood doesn't get better in Europe, as the continent faces an economic and refugee crisis, and Britain threatens to leave the EU. On the political and security front, the implosion of the Middle East continues.
Tuesday, December 29, 2015
Monday, December 28, 2015
Japan's factory output and retail sales both fell 1% in November, suggesting that a clear recovery in the world's third-largest economy will be delayed until 2016. On Friday, the country was hit with a raft of disappointing figures, including inflation data, household spending, jobless claims and falling incomes. The numbers could also put more pressure on the Bank of Japan to expand its stimulus program, which was last fine-tuned on Dec. 18 to ensure it can maintain and accelerate its money-printing.
Monday, December 21, 2015
Brent crude is shattering records, losing a fifth of its value in the last month and a third since early October. The benchmark has now hit levels not seen since 2004, skidding 2% to as low as $36.06 per barrel, as oversupply concerns and a strong dollar continue to weigh on the market. With a ban on U.S. oil exports lifted and new supplies looming from Iran, West Texas Intermediate crude is also feeling the pressure, down 0.9% at $34.42/bbl, its lowest since February 2009.
Wednesday, December 16, 2015
The day we've all been waiting for has finally arrived. The Federal Reserve is expected to hike interest rates when its two-day policy meeting concludes later today, marking the end of a decade of near zero interest rates. But how much and how fast could the Fed raise rates in the coming months? The answer to that question is likely to come from the triple-dose of news the central bank will issue this afternoon - a policy statement, economic forecasts and a news conference by Chair Janet Yellen. Stocks are green across the globe ahead of the big decision.
Sunday, December 13, 2015
China's yuan traded at its lowest level in over four years as Beijing continues to let the currency devalue. The yuan fell to as low as 6.4515 to the dollar. Some economists think that the People's Bank of China will allow the yuan to float lower until the Federal Reserve meets next week.
Thursday, December 10, 2015
The Swiss National Bank left its interest rates unchanged in negative territory today, declaring that it would remain active if necessary to weaken the highly-valued Swiss franc. "Despite depreciating somewhat in recent months, the franc is still significantly overvalued," the central bank said in a statement. The SNB kept its target range for three-month Libor at between -1.25% and -0.25%, and maintained a -0.75% interest rate on sight deposits.
Tuesday, December 1, 2015
The IMF added the yuan to its Special Drawing Rights basket yesterday, but what does that mean for the currency? 1) Effective Oct. 1, 2016, the renminbi will officially be recognized as a reserve currency, meaning central banks will have an alternative for foreign exchange reserves. 2) The basket's currency weighting will get mixed up, with the euro seeing the biggest percentage drop from the new formula. 3) The yuan also meets criteria of being "freely usable," or widely used for international payments and in foreign exchange markets, boosting China's influence in the global economy.