POLITICS & ECONOMICS
Occidental:
The latest global economic numbers have been negatively accumulating, Crude stocks increased, real estate sales decreased terribly and the consumer confidence remains poor. The positive ECO figure that was published today was the jobless claims in the US, decreasing more than previously forecasted.
Reported on business week: “Commodity assets under management gained about $8 billion in July to more than $300 billion, driven mostly by new inflows, according to Barclays Capital. Arabica is the best-performer on the Reuters/Jefferies CRB Index this year “
Last week China became the second largest trading economy and the US is now trying to react regarding its import / export system with China. The trade flow between the two countries may be penalized with an increase custom duty fees. All this to gain more control over the market and put a stop to illegal imports. Obama’s administration is looking to double exports, targeting a reduction jobless claim.
Emerging Markets:
China has been purchasing bonds abroad at a record rate except for the US, which still remains the biggest market for them. These acquisitions show that their economy is looking for diversification, looking to spread their reserve.
The food inflation in India has been taken in control by the government restricting food related commodity export, has domestic prices have risen to a certain extend that it needs to be controlled.
Russia is now rising from ashes, where its market has been going down since the beginning of August. Now that all the climatic issues are being taken care of, we could see the market coming back for a hike, the only issue is that consumer confidence is not looking so well, and the public opinion may slow things down.
Interest rates in Brazil could be maintained at the 10.75% level for the rest of the year by the central bank as it has been continuously falling for the past 2 months. The country is expected to grow just under 9%. The election coming ahead in Brazil, where Dilma Rousseff is widening its lead supported by Lula, could bring the attention of most foreign investors on the country. The World Cup and Olympic Games are important events political figures are betting on at the very moment.
In Pakistan 600,000 have been ordered to flee their villages as floods get worse than ever, which could also have a direct impact on commodities demand in the country.
CURRENCIES
Brazil unemployment rate declines to 6.9%, and economy is running at its full capacity, driving the real to high levels. But the country is doing well at maintaining consumer prices at convenient levels and escaping inflation.
The Asian currencies are the main trend to trade at the moment, as the whole region is trading at high level vs the USD. The Far East Asian countries could expand above 9.3% average for 2010. As for Japan, the country has been skyrocketing, and profit margins have very much expanded. The Japanese stock market seems to be very interesting for investors these days. The Yen may be limited by the bank of Japan where the government could decide to purchase some USD, but the country is more looking at its election process, due mid September.
