The People's Bank of China (PBOC) announced on Friday that it would raise the reserve requirement ratio (RRR) by +50 bps to 19.5%, effective February 24. The 8th hike RRR in the current cycle and the second one this year reflected the government's commitment to curb inflation. Most investors concern about the impacts of tightening on China's growth and commodity demand outlooks. While commodity prices may be weighed down initially as the measures were announced, the longer-term outlook should remain robust. Strong economic growth in China will not be damped easily.
Tensions in the Middle East and North Africa (MENA) have raised concerns over oil supply disruption. As driven by the unrest in Egypt, Brent crude oil prices surpassed $100/bbl and have continued to trade about it. While Nymex crude oil prices have picked up in recent days, the WTI-Brent spread remained wide and the disconnected performance between the 2 benchmarks is expected to continue for some time.
G-20 finance leaders agreed on indicators, such as trade balance, exchange rates, interest rates and public and private debts, to closer monitoring of global economic imbalances. However, measures to narrow imbalances were not compromised. As mentioned by French Finance Minister Christine Lagarde, host of the meeting, ‘it wasn't easy, there were obviously diverging interests'.
Macroeconomic data to be released next week includes US consumer confidence which probably rose to a new 3-year high. In the Eurozone, flash PMIs are expected to have improved in the 17-nation region as well as in Germany. The minutes of the February BOE meeting may show more members favoring a rate hike.
This is amazing, lots of people wondering what going on. But the guy from FFT or http://www.forecastfortomorrow.com was talking about this amazingly many moons ago.
ReplyDeletehe called the stockmarket crash back in 2008 and the economic collapse many years ago. It is intrseting to see what he is saying now. Go check him out.