Monday, 25 August 2008
Is uk in recession
Not yet ,but all signs are pointing in that direction .A recession is a period of negative economic growth for 2 consecutive economic quarters. In the post war period UK economic growth has been characterized by the boom and bust economic cycles. A period of growth is followed by high inflationary growth and then a downturn in the economy. However since 1992 the UK has experienced a long period of economic growth, the longest period of uninterrupted growth this century. It appears the UK has temporarily avoided the threat of recession, but although forecasts remain positive there are many factors that could push the UK into recession
Monday, 19 May 2008
will world cope up with this turmoil
A lot of things are going around us ,money is being hoarded like anything and inflation is going up ,oil prices near 200$ ,food prices soaring ,if the prices go up like this poor people may not be able to afford to eat and it will lead to violence due to shortage of food .things may seem like fairy tale and it would happen if things move at this pace .
Wednesday, 5 March 2008
is usa in recession
It said that Friday's employment report, which sent shares tumbling worldwide, confirmed that the US is in the first month of a recession.
Its view is controversial, with banks such as Lehman Brothers disagreeing.
But a reserve member of the committee that sets US rates warned that it could do little about the below-trend growth expected in the next six months.
"I am concerned that developments on the inflation front will make the Fed's policy decisions more difficult in 2008," Charles Plosser, president of the Federal Reserve Bank of Philadelphia said.
He was referring to the problems faced by the US Federal Reserve, which might want to cut interest rates to avoid a recession, but is worried about inflationary factors such as $100-a-barrel oil.
'Significant decline'
An official ruling on whether the US is in recession is made by the National Bureau of Economic Research, but this decision may not come for two years.
The NBER defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months".
It bases its assessment on final figures on employment, personal income, industrial production and sales activity in the manufacturing and retail sectors.
Merrill Lynch said that the figures showing the jobless rate hitting 5% in December were the final piece in that puzzle.
"According to our analysis, this isn't even a forecast any more but is a present day reality," the report said.
'Actual downturn'
But NBER president Martin Feldstein denied Merrill's claims.
"I think we're not in a recession now," he told CNBC.
"But I think there is a serious risk that it could get worse and we could see an actual downturn," he added.
Merrill said that the current consensus view on Wall Street that there is a good chance of avoiding a recession is "in denial".
It also objected to the use of euphemistic terms for the state of the economy.
"To say that the backdrop is 'recession like' is akin to an obstetrician telling a woman that she is 'sort of pregnant'," the report said.
Housing figures
There were further signs of the housing slowdown that has sparked off the problems in the US economy in home sale figures.
Pending sales of existing homes fell 2.6%, according to the National Association of Realtors, which saw its pending sales index drop to 87.6 in November, 19.2% below the point it was at a year ago.
The figures were better than expected, however, because October's index reading was revised upwards from 87.2 to 89.9.
Meanwhile, US phone giant AT&T said it was now disconnecting a growing number of home phone and broadband customers for failing to pay their bills.
Its view is controversial, with banks such as Lehman Brothers disagreeing.
But a reserve member of the committee that sets US rates warned that it could do little about the below-trend growth expected in the next six months.
"I am concerned that developments on the inflation front will make the Fed's policy decisions more difficult in 2008," Charles Plosser, president of the Federal Reserve Bank of Philadelphia said.
He was referring to the problems faced by the US Federal Reserve, which might want to cut interest rates to avoid a recession, but is worried about inflationary factors such as $100-a-barrel oil.
'Significant decline'
An official ruling on whether the US is in recession is made by the National Bureau of Economic Research, but this decision may not come for two years.
The NBER defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months".
It bases its assessment on final figures on employment, personal income, industrial production and sales activity in the manufacturing and retail sectors.
Merrill Lynch said that the figures showing the jobless rate hitting 5% in December were the final piece in that puzzle.
"According to our analysis, this isn't even a forecast any more but is a present day reality," the report said.
'Actual downturn'
But NBER president Martin Feldstein denied Merrill's claims.
"I think we're not in a recession now," he told CNBC.
"But I think there is a serious risk that it could get worse and we could see an actual downturn," he added.
Merrill said that the current consensus view on Wall Street that there is a good chance of avoiding a recession is "in denial".
It also objected to the use of euphemistic terms for the state of the economy.
"To say that the backdrop is 'recession like' is akin to an obstetrician telling a woman that she is 'sort of pregnant'," the report said.
Housing figures
There were further signs of the housing slowdown that has sparked off the problems in the US economy in home sale figures.
Pending sales of existing homes fell 2.6%, according to the National Association of Realtors, which saw its pending sales index drop to 87.6 in November, 19.2% below the point it was at a year ago.
The figures were better than expected, however, because October's index reading was revised upwards from 87.2 to 89.9.
Meanwhile, US phone giant AT&T said it was now disconnecting a growing number of home phone and broadband customers for failing to pay their bills.
Saturday, 26 January 2008
where is my money safe
in todays market conditon where can keep my invested as well as safe,as market goes up and down in roller coaster rides so often ,traders are really confused ,how can i keep my money earning even in this market conditoins ,analysts say it better to be in sidelines and watch till this turbulence ends ,bond are really safe but on yields side its not as promising as equity ,banking and financial stock are tradining at the bottom fo their valuations,so they are a good but when can i enter them have they reallly bottomed out ,or really have reached the bottom ,these are the questions to be aswered ,so best thing is to watch where the market heads ,2008 eight has been a bad year as far as trading is cconsiderd ,lets hope worst is over
Saturday, 15 December 2007
indian growth story
India's rupee is set to head higher against the dollar as foreign investors pour money into the rapidly growing economy and the only question is how fast the currency will rise, analysts say.
Lifted by a tide of overseas money into domestic shares following a cut in US interest rates, the Indian currency strengthened beyond the psychologically key 40 rupees to the dollar barrier for the first time in nine years last week.
The rupee closed on Friday at 39.87 to the dollar and analysts expect it to gain further in coming months as foreign investors buy shares and pour money into plants and infrastructure projects to exploit the booming economy.
"We're looking for a rupee of around 39 to the dollar by year end and for the rupee to go to around 38.5 or 38 to the dollar by mid next year," said Richard Yetsenga, HSBC's Asia currency strategist in Hong Kong.
"The rupee is definitely going up" but the speed of its rise "entirely depends on how vigorous (central bank) authorities are in slowing the rupee's appreciation," Yetsenga said.
The central bank has "expressed its desire for slow rupee appreciation but pressure on the rupee (to rise) is so fundamental and robust" that a level of 35 rupees to the dollar "is not out of the question," he said, not specifying a timeframe for such a move.
The rupee has already risen by 11 percent this year against the dollar, making it Asia's best performing currency.
Foreign funds have invested 10.47 billion dollars in Indian equities so far in 2007, more than twice the 4.69 billion dollars they pumped in during the same period last year, lured by record economic expansion. India logged first-quarter growth of 9.3 percent -- the world's fastest after China.
BNP Paribas country treasurer Manoj Rane forecast the rupee would "rise further on the back of strong capital inflows," adding the currency could touch 38.50 levels against the dollar by year end.
The rupee got its latest burst of wind last Tuesday when the US Federal Reserve Board cut rates by a surprise 50 basis points to ease credit stress that threatens the world's biggest economy.
Typically when the Fed lowers rates, investors start looking for higher returns in emerging markets.
The benchmark Bombay Stock Exchange Sensitive Index or Sensex has climbed by 5.7 percent to a record 16,564.23 points since the rate cut with investors seeing India as a haven from international subprime credit turmoil.
While the nation of 1.1 billion people has been gradually easing rigid state controls on trade and investment and opening up its economy, it remains far less exposed to global financial upheaval than many countries, economists say.
Domestic drivers such as strong capital expenditure and consumption growth "for the Indian market override the concerns from recent dislocations in the global credit and mortgage markets," said investment bank UBS in a note.
The rupee's muscle is a novel experience for Indians more accustomed to a currency that a few years back just seemed to lose ground. Until economists began talking about India as an emerging economic powerhouse, "on average you would factor in about a five percent annual depreciation," noted an analyst.
In mid-2002, a dollar bought 49 rupees. The rupee's strengthening has created headaches for exporters, especially for the 50-billion-dollar software industry which earns two-thirds of its revenues in US dollars.
"People can factor a steady appreciation into their business costs, it's when appreciation is too fast it creates problems," National Association of Software and Services Companies president Kiran Karnik said.
Already average monthly growth in total exports has fallen to 18 percent so far this fiscal year from 25 percent in 2006 but exports only account for 14 percent of GDP so the impact on growth is expected to be limited.
The government's "ambitious export target of 160 billion dollars -- up 25 percent from the previous year -- will be unachievable," said Deepak Lalwani at London's Astaire and Partners. But he forecast a "still respectable increase" to 145 billion dollars.
The central bank will keep trying to break the currency's rise through intervention -- buying rupees and selling dollars, analysts said.
"We expect the Reserve Bank of India to continue intervening in the currency markets, in order to allow for some depreciation in the rupee," said Manika Premsingh, economist at Mumbai's Edelweiss Capital.
But the bank's rupee sales to support the dollar and unprecedented foreign investment inflows are raising fears about excess cash sloshing about in the Indian economy that could stoke inflation.
Lifted by a tide of overseas money into domestic shares following a cut in US interest rates, the Indian currency strengthened beyond the psychologically key 40 rupees to the dollar barrier for the first time in nine years last week.
The rupee closed on Friday at 39.87 to the dollar and analysts expect it to gain further in coming months as foreign investors buy shares and pour money into plants and infrastructure projects to exploit the booming economy.
"We're looking for a rupee of around 39 to the dollar by year end and for the rupee to go to around 38.5 or 38 to the dollar by mid next year," said Richard Yetsenga, HSBC's Asia currency strategist in Hong Kong.
"The rupee is definitely going up" but the speed of its rise "entirely depends on how vigorous (central bank) authorities are in slowing the rupee's appreciation," Yetsenga said.
The central bank has "expressed its desire for slow rupee appreciation but pressure on the rupee (to rise) is so fundamental and robust" that a level of 35 rupees to the dollar "is not out of the question," he said, not specifying a timeframe for such a move.
The rupee has already risen by 11 percent this year against the dollar, making it Asia's best performing currency.
Foreign funds have invested 10.47 billion dollars in Indian equities so far in 2007, more than twice the 4.69 billion dollars they pumped in during the same period last year, lured by record economic expansion. India logged first-quarter growth of 9.3 percent -- the world's fastest after China.
BNP Paribas country treasurer Manoj Rane forecast the rupee would "rise further on the back of strong capital inflows," adding the currency could touch 38.50 levels against the dollar by year end.
The rupee got its latest burst of wind last Tuesday when the US Federal Reserve Board cut rates by a surprise 50 basis points to ease credit stress that threatens the world's biggest economy.
Typically when the Fed lowers rates, investors start looking for higher returns in emerging markets.
The benchmark Bombay Stock Exchange Sensitive Index or Sensex has climbed by 5.7 percent to a record 16,564.23 points since the rate cut with investors seeing India as a haven from international subprime credit turmoil.
While the nation of 1.1 billion people has been gradually easing rigid state controls on trade and investment and opening up its economy, it remains far less exposed to global financial upheaval than many countries, economists say.
Domestic drivers such as strong capital expenditure and consumption growth "for the Indian market override the concerns from recent dislocations in the global credit and mortgage markets," said investment bank UBS in a note.
The rupee's muscle is a novel experience for Indians more accustomed to a currency that a few years back just seemed to lose ground. Until economists began talking about India as an emerging economic powerhouse, "on average you would factor in about a five percent annual depreciation," noted an analyst.
In mid-2002, a dollar bought 49 rupees. The rupee's strengthening has created headaches for exporters, especially for the 50-billion-dollar software industry which earns two-thirds of its revenues in US dollars.
"People can factor a steady appreciation into their business costs, it's when appreciation is too fast it creates problems," National Association of Software and Services Companies president Kiran Karnik said.
Already average monthly growth in total exports has fallen to 18 percent so far this fiscal year from 25 percent in 2006 but exports only account for 14 percent of GDP so the impact on growth is expected to be limited.
The government's "ambitious export target of 160 billion dollars -- up 25 percent from the previous year -- will be unachievable," said Deepak Lalwani at London's Astaire and Partners. But he forecast a "still respectable increase" to 145 billion dollars.
The central bank will keep trying to break the currency's rise through intervention -- buying rupees and selling dollars, analysts said.
"We expect the Reserve Bank of India to continue intervening in the currency markets, in order to allow for some depreciation in the rupee," said Manika Premsingh, economist at Mumbai's Edelweiss Capital.
But the bank's rupee sales to support the dollar and unprecedented foreign investment inflows are raising fears about excess cash sloshing about in the Indian economy that could stoke inflation.
Wednesday, 12 December 2007
rate cut and reaction
Rate cut yesterday did not go well with the us stock market,stocks fell almost by 300 points ,stock recovered today after the five central banks formed a joined fund to lend to the banks in auction ,so that they can be rescued in case of a crisis,stocks recovered after this intervention ,yen also slided after this step to three months low , the us stocks has been closely related to the movement of yen ,so this shows the markets are moving forwards ,but analysts fear that ,this might look like a panic reaction by the Central banks ,tomorrow the markets are bound to be range bound.
Monday, 10 December 2007
forex today
U.S. Dollar Trading (USD) was buoyed by positive payroll readings for the month of November. Following strong release of jobs data earlier in the week, Non Farm Payrolls did not disappoint with the figure coming in slightly higher than forecasts at 94k (Forecast: 90k), whilst previous figures were revised higher to 170k. Bets that the Federal Reserve will cut rates by 50 basis points in the upcoming week were trimmed. Further more the Unemployment Rate for the month of November was unchanged at 4.7%, despite markets expecting a rise to 4.8%. In U.S. share markets the NASDAQ was down -2.87 points (-0.11%) whilst the Dow Jones was higher by 5.69 points (+0.04%) to have little impact on the market. Crude oil fell once again on Friday by US$1.89 a barrel to US$88.34 on expectations that inventories will meet demand during the North American winter. Looking ahead, the week begins with the release of Pending Home Sales data for the month of November. Forecast lie at a net change of -1% (Previous: 0.2% and 85,700)
· The Euro (EUR) eased initially following sturdy payrolls data out of the U.S., as the government report showed that the economy added slightly more jobs then expected for the month of November. In Eurozone specific data, the regions largest nation in Germany saw Industrial Production fall by -0.3%, slightly less than the forecasted -0.4%. Overall the EURUSD traded with a low of 1.4599 and a high of 1.4673 before closing the day at 1.4654 in the New York session. German Trade balance for the month of October will be made public today (Forecast: 17 bln; Previous: 17.9 bln).
· The Japanese Yen (JPY) fell against the dollar for a third consecutive session, extending its longest decline since October. Much of the moves were attributed to positive payrolls data out of the U.S., prompting further weakness against a number of high yielding currencies, as data reflected confidence in carry hungry investors. The JPY lost a total of 0.4% against the USD throughout the week and a 0.6% versus the Euro. Much of the decline in the later part of the week were attributed to President Bush’s plan to freeze interest rates on some sub-prime mortgages, easing concern that credit-market losses will drag down economic growth. The USDJPY traded with a low of 111.18 and a high of 111.79 before closing the day at 111.71 in the New York session. Machine orders for the month of October are released out of Japan on Monday, with forecast at 7%, up from the previous -7.6%.
· The Sterling (GBP) paired its gains following the U.S. payrolls data despite its previous session rally in light of rate cut by the BoE of 25 basis points. Overall the GBPUSD traded with a low of 2.0224 and a high of 2.0343 before closing the day at 2.0314 in the New York session. Looking ahead, PPI data (both input and output) for the month of November kick the week off for the UK.
· The Australian Dollar (AUD) traded sideways once again, on the back of other majors. In the little support that the currency found was attributed to growing interest in the carry trade, as speculators grew confident that the U.S. will avoid heading into a recession following Fridays NFP release. Overall the AUDUSD traded with a low 0.8744 and a high of 0.8826 before ending the session at 0.8774 in New York.
· The Canadian Dollar (CAD) was one of the few currencies to find strength following reports which showed the nation's employers added five times more jobs in November than economists had forecast, stretching the rally to two consecutive sessions. In other news, Unemployment Rate for the month of November failed to add any extra boost coming in at 5.9%, up from the previous 5.8%. Overall the USDCAD traded with a low of 1.0010 and a high of 1.0150 before ending the day at 1.0045 at close of New York.
· Gold (XAU) was volatile once again, falling on the back of declining energy costs reduced appeal for an inflation hedge. XAU traded with a low of 791.70 and a high of 804.80.
· The Euro (EUR) eased initially following sturdy payrolls data out of the U.S., as the government report showed that the economy added slightly more jobs then expected for the month of November. In Eurozone specific data, the regions largest nation in Germany saw Industrial Production fall by -0.3%, slightly less than the forecasted -0.4%. Overall the EURUSD traded with a low of 1.4599 and a high of 1.4673 before closing the day at 1.4654 in the New York session. German Trade balance for the month of October will be made public today (Forecast: 17 bln; Previous: 17.9 bln).
· The Japanese Yen (JPY) fell against the dollar for a third consecutive session, extending its longest decline since October. Much of the moves were attributed to positive payrolls data out of the U.S., prompting further weakness against a number of high yielding currencies, as data reflected confidence in carry hungry investors. The JPY lost a total of 0.4% against the USD throughout the week and a 0.6% versus the Euro. Much of the decline in the later part of the week were attributed to President Bush’s plan to freeze interest rates on some sub-prime mortgages, easing concern that credit-market losses will drag down economic growth. The USDJPY traded with a low of 111.18 and a high of 111.79 before closing the day at 111.71 in the New York session. Machine orders for the month of October are released out of Japan on Monday, with forecast at 7%, up from the previous -7.6%.
· The Sterling (GBP) paired its gains following the U.S. payrolls data despite its previous session rally in light of rate cut by the BoE of 25 basis points. Overall the GBPUSD traded with a low of 2.0224 and a high of 2.0343 before closing the day at 2.0314 in the New York session. Looking ahead, PPI data (both input and output) for the month of November kick the week off for the UK.
· The Australian Dollar (AUD) traded sideways once again, on the back of other majors. In the little support that the currency found was attributed to growing interest in the carry trade, as speculators grew confident that the U.S. will avoid heading into a recession following Fridays NFP release. Overall the AUDUSD traded with a low 0.8744 and a high of 0.8826 before ending the session at 0.8774 in New York.
· The Canadian Dollar (CAD) was one of the few currencies to find strength following reports which showed the nation's employers added five times more jobs in November than economists had forecast, stretching the rally to two consecutive sessions. In other news, Unemployment Rate for the month of November failed to add any extra boost coming in at 5.9%, up from the previous 5.8%. Overall the USDCAD traded with a low of 1.0010 and a high of 1.0150 before ending the day at 1.0045 at close of New York.
· Gold (XAU) was volatile once again, falling on the back of declining energy costs reduced appeal for an inflation hedge. XAU traded with a low of 791.70 and a high of 804.80.
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