Emerging markets sell off for third day on China growth fearsJanuary 27, 2014 Posted by: Pete Karabatos
ECB Governing Council Member Christian Noyer said that turmoil in emerging markets is unlikely to derail Europe’s recovery. He commented that “the IMF has just revised upward its global growth forecast, so there’s no particular reason that Europe should be affected by the problems encountered by a small number of countries.” Separately, the Fed cited an improving labor market as the basis for its decision to taper bond purchases. One challenge this creates for incoming Fed Chair Janet Yellen is that the U.S. currently has very low inflation. According to Eric Rosengren, the Boston Fed President, a shock to the economy currently has the potential to lead to deflation. Yet Yellen is taking over a central bank committed to reducing stimulus at a time when it has failed to reach its 2% inflation target.
• German business confidence, as measured by Ifo’s business climate index, rose to a two year high of 110.6.
• Japan posted a record trade deficit of 11.5 trillion yen. The deficits are caused in large part by swelling fuel imports that followed the shuttering of nuclear power plants in the country after the Fukushima meltdown.
• U.S. new home sales fell by 7.0% in December, a larger drop than forecast that was due in part to poor weather, to 414,000.
• Emerging-market currencies and stocks are lower for the third day on concerns that China’s economy is slowing.
• Canadian consumer confidence fell to 57.6 from 58.7 on pessimism about personal finances.
01/28 GBP: UK GDP (Q4)
01/28 USD: Durable Goods Orders (Dec.)
01/28 USD: Consumer Confidence (Jan)
01/29 USD: FOMC rate Decision
01/31 EUR: Unemployment (Jan)
01/31 USD: Personal Income and Spending (Dec)
02/03 GBP: Manufacturing PMI (Jan.)
02/03 USD: ISM Prices Paid (Jan.)
02/04 EUR: Producer Price Index (Dec.)
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