Despite these trends, equity markets around the globe are very active, and will probably never cease to be. The only exception to this statement is the Chinese stock market, which through internal and external factors has slowed considerably due to failing monetary policy designed to curb issues with the Shanghai Composite Index. Last session the index fell by -1%. Other disappointing figures include the US GDP report, with the Q2 figures widely expected to be a success but largely disappointing after slow growth in Q1. Personal consumption expenditure in Q2 rose to 1.8% from 0.8%, getting close to the Fed’s target of 2.0%. This indicates that monetary policy tightening might come earlier than expected, while the FOMC seems confident on labour employment but not for inflation. Japan has escaped deflation as of yet. Acceleration of prices in the country has increased with a 0.4% pace since May. On the contrary, household spending in July was down 21%. The labour market and inflation still remain a concern. Lower prices led to a boost of the industrial production which helped in raising exports. Balance of payments will not experience a dramatic change for the reason of the high debt present in Japan.
Global Uncertainty and Falling Commodities
Weekly Report - 03/08/2015