Daily Market News Digest

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UK sees steep rise in unemployment

"Around 1.97 million people in the UK are currently unemployed"


17th March 09, Tuesday

UK is reeling under growing massive unemployment. The job loss rate in UK has more than doubled in the past years. On an average, each job is being chased by at least 10 jobseekers. In Fx Trading pound rose for a fourth day against the dollar today.
According to the trade union body there a year earlier it was only 4 people seeking a job. At other council areas there are at least 20 people per job vacancy. In other figures, between January and March this year, there have been two million unemployed people in the UK.

The decrease in job vacancies has been equally shocking.

According to The British Chambers of Commerce (BCC), over the second half of the next year, more than 10% of the total workforce in Britain can be without a job.
UK is witnessing the first recession since 1991.

 

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People on Jobless Benefit in U.S. Rises to Record

20th march 09,Friday

Unemployment in the U.S. is on the rise. According to the recent reports from the Labor Department the number of U.S. workers seeking unemployment benefits has hit a new record.

Figures underscore the difficulty of finding a new job:

* 5.47 million People staying on the jobless rolls or the unemployment social security benefit.
* That makes the number of people filing new claims for jobless benefits rise to 646,000 from 658,000 the previous week.
* Over 4 million jobs lost in the country since the recession began 15 months back
* Jobless rate has hit 25-year high of 8.1 percent.
* Percentage of insured workers receiving jobless benefits jumps to the highest since 1983 to 4.1%

Analysts are not predicting a strong growth for the American economy until 2010.

 

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Americans still in fear of home prices drop

21st March 09, Saturday

Americans are still in fear that prices will drop steeply even after the Fed's efforts to revive the economy the real estate sector are going on full fledged, according to a poll here.

The Reuters surveyed homeowners who forecast their home values would fall by 2.2 percent in the year ahead.

Ever since the housing bubble burst, there have been heavy losses in the stock market and massive job losses across the US.Consumers in the US are still nervous about home prices. The chances of the US recession ending this year get bleaker in such a case.

House Prices in the US have tumbled more than 26 percent since their peak three years ago.

 

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China Hopes to Recover Sooner

23rd March 09,Monday

China may be the first country to recover from global crisis, according to the analysts there.

Officials Forecast Early Recovery:
The 4 trillion Yuan ($585 billion) worth stimulus package announced earlier in the year will run through 2010, adding 1.9% to this year’s expansion by spending on creation of roads, railways and houses.

How far that turns out to true remains to be seen:
China's economy has suffered a setback from the diminishing global demand and consequently plummeting exports.Unemployment has risen with millions of migrant workers losing jobs as factories are cutting production or shuting down.

The world's largest and most populous country is planning a record 950 billion yuan budget deficit this year.

 

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World Trade to Shrink By 9%

Global trade volume will shrink by at least 9% in the present year. In a forecast by the World Trade Organization (WTO), developed nations are being seen to be hit the hardest. Developed nations across the world can expect a 10% drop in the trade percentage. Poorer nations could expect 2-3% fall.

Falling Trade responsible for recession:
While blaming the shrinking trade volume as the reason for global slump, WTO also said that it could well be a "potent tool' for coping with the same.

World trade has witnessed the biggest fall since World War II.
World Trade is an important agenda at the upcoming G-20 Summit on April 2 in London.

Optimistic Outlook:
WTO, however, marked that there have been some positive signs with China, Singapore and Taiwan recording a rise in export- for the first time in months.China is counting on recovering sooner than rest of Asia.

 

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Car Factory output falls in Japan; Asian Stocks plummet



Japan's car factory output has fallen sharply for the fifth consecutive month in February.
Annual car production in Japan has fallen by more than 9% in this financial year. An independent industry data has showed that Car production in Japan had plummeted by 56% in the previous month.

IMF predicts gloomy picture:
The IMF expects Japan as one of the largest economies in the world, to register a contraction of up to 5.8% in the up coming financial year.
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Asian Stock Nosedive
Meanwhile world stocks fell on concerns the global slump is deepening.
Worst performers have been the Asian stocks which nose dived on speculation over persistent problems in the US car industry.

 

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Germany Records rise in Unemployment

Recession in Europe is worsening. Rate of Joblessness in Germany has risen to 8.6% which translates into around 3.4 million jobless people.Europe is facing growing unemployment concerns.Germany's export driven economy has been hit by global economic down swing.

Spain has recorded the highest jobless rate at 14%.Analysts are estimating further decline and stabilization in the second quarter.

Germany is expected to have around four-million Unemployed people by the end of 2009.

 

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Forex ~ Afternoon Forex Updates

US Dollar slips:
Risk sentiment has been soured with reports that bankruptcy could be a viable option for the car makers like GM. The Bloomberg reported today that the Obama administration is looking at a prepackaged bankruptcy for GM.

In fx trading,US dollar came off highs with further news that this report is "not accurate" and that President Barack Obama's thinking on the crisis facing GM has not changed since Monday. The dollar fell about 0.1 percent against the yen.

Traders alert before key events later this week:
ForexTraders are treading cautiously ahead of the G20 meeting and the ECB policy announcement in the coming days.

Business confidence at record low in Japan:
A survey by the central bank in Japan has showed that business confidence among manufacturers in Japan is at a record low. Government reports yesterday showed that U.S. home prices are still plunging.In online forex trading the yen traded near its weakest level in almost a month against the greenback.

 

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World News ~ A New World Order in the Making

G20 Summit Concludes

4th April,09 Saturday
The world leaders meet at the G20 Summit in London with the motto of Stability Growth and Jobs ended yesterday marking a turning point in the world history. Overall, there have been mixed responses regarding the success of the Summit.
Here are some of the highlights from the Summit.

*Hits*

* US president Barack Obama called the Meeting Historic in its pursuit to recover from the financial quagmire.
* IMF's managing director was happy after the summit and especially enthusiastic about IMF issuing $250bn worth of its own currency, the SDR. Top jobs in the IMF will be open to people from all parts of the world which until now had only Europeans on them.
* G20 meet succeeded in inciting cooperation on crackdown on tax havens as also greater support for the poorest countries.

*Misses*

* The Summit's biggest failure is being seen in its inability to settle on a global plan for recovery from the crisis.
* A representative from the World Development Movement said one of the biggest misses of the summit is that leaders failed to get a consensus on a global green new deal that puts the interests of poor people and the environment as an important part of the international trade and finance.


It remains to seen when and how the pledges at the Summit get transformed into real worth.
The G20 Summit is best being regarded as embarking of the journey of a new beginning..

 

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UK's budget could be worse than predicted.

6th April,09 Monday
The budget deficit is at least 2.7% more than what was being expected in the pre budget announcements by the Chancellor Alistair Darling.Darling who will be presenting the budget later in the month said the recession in UK has been more severe than expected.

In Fx Trading, the pound has tumbled amid these persistent economic problems here.

The £39bn (approx 58bn US dollars) deficit could be financed by either raising the tax limits or by putting a five-year real freeze in total public spending.The Institute for Fiscal Studies (IFS) estimates that taxes in Britain will have to rise by at least £20bn a year to cover record borrowing.

The prime Minister Gordon Brown,is hopeful the consensus reached at the worth $1.1 trillion (£681bn) deal at the G20 Summit will help build the dwindling confidence in the banks, and make a difference to the lives and to the aspirations of families and businesses in the UK.

 

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U.S. Budget deficit more than $1Trillion

Hello Traders
Here's the story for today

U.S. Budget deficit more than $1Trillion
The U.S. recorded a gigantic budget deficit of nearly $1 trillion in the first six months of this fiscal year which began on October 1.The estimates released on Monday by the Congressional Budget Office said the government likely recorded $953 billion in red ink from October through March.


Here's why Deficits matter

* Increased debt costs for government
* Increased risk of inflation
* Long-term pressure on dollar
* Could lead to higher taxes and spending cuts later


The CBO, the nonpartisan budget analyst for Congress, said the drop in corporate receipts was the largest in more than three decades.In addition to dropping revenue and the bailout money for Wall Street, the government has poured more money out the door to try to jump-start the ailing economy, which has been in recession since December 2007.

 

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China’s economy is in goof position than predictable, the Country’s Premier said, but in Japan a huge fall in wholesale prices showed the world’s second-largest economy was down back towards deflation.

Last month a jump in china’s industrial production, with a record climb in new lending, gave additional credibility to the plan that the bottom of the worst global financial crisis as the Great Depression may not be distant.
On Saturday, Premier Wen Jiabao told to the reporters in Thailand, that China’s economy had shown some latest signs, but we all know that our financial system still facing big difficulties.

The China Securities Journal reported on Monday that china was planning a new economic stimulus package targeted to increasing consumption, citing a senior officer of the State Information Center which is associated with the top planning agency of the country. The economic positions in Japan remain doubtful while in China things were looking intense.

 

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On Wednesday, Oil rose for the second day, nearing $49 a barrel on support from the bullish data and Wall Street on US oil inventories, though gains were tempered by weak demand data from major currencies.

On Tuesday, American Petroleum Institute numbers released after the close of trade showed a surprising fall in US crude stockpiles last week of 1 million barrels, increasing hopes that Energy Information Administration data on Wednesday could break the pattern of large stock builds.

Remarks from US Treasury Secretary Timothy Geithner the most US banks have sufficient capital also soothed nerves that had been battered by a larger than predicted record by America’s largest bank on Monday that sent oil prices losing 9%.

But the demand for oil remains weak with data from South Korea, Japan and China underlining this trend and OPEC member Iran saying the association may have to cut supply again in response.

US crude for June delivery rose 25 cents to $48.80 among thin trading with prices still less than levels over $50 seen before Monday’s equities-led fall.

 

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China’s economy to improve in second quarter enhanced by increasing investment and a slower decline in exports, a leading government economist remarks on Friday.

According to latest Forex updates the annual growth in GDP slows down in the first quarter from 6.8% to 6.1%, but economists said this marked a development in sequential, quarter-on-quarter increase.

This trend will continue, according to Zhang Liqun an economist with the Development Research Centre, a think tank under the China’s cabinet, the State Council, as demand and supply come into balance.

In March export declined by 17.1% from earlier year, improving from 25.7% decrease recorded in February. Zhang said that he expected exports for all of 2009 to reduce 10-15%.

The pace of investment, which rose up sharply in the first quarter will continue to gather momentum all through the year, Zhang said, without giving any estimate.

Fixed-asset investment expanded 28.8% in the first three months as compared with past years as the first stage of Beijing’s 4 trillion Yuan ($585 billion) stimulus planned break down.

The economist said that he expected a development in overall domestic demand, determined in part by real estate markets.

 

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On Friday, the Federal Reserve of the US released an expected report which has shown that the present financial condition and wild market instability have ‘substantially reduced’ the fiscal reserves at some of the major banks are under operations. However, the report has shown that the most firms still hold excess reserves in accordance with the previous regulatory standards.

This report is planned to restore the public’s confidence that the biggest of banking institutions in the US are stable. The stress test is done with the 19 banking institutions in the US with methods used to decide the strength of the banks portfolio by suggesting two different situations with the final results being released in ten days, on 4th May.

Regulators who performed the tests required to keep financial institutions lending over the coming years also decided the amount of capital they may require during a protracted and/or worsening economic slump. The amount of capital each institution holds will predict the company’s ability to remain earnings over the course of the coming years, including access to private capital in future and the ability to cover future draw downs on capital.

 

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Analysts said that the gain is riskier currencies was come from a confluence of improving US economic signs, indicates that the new flu strain occurrence seem less severe than rising stock markets. The S&P futures rose 0.5%, indicating a positive start on Wall Street later.

On Friday, Forex updates showed that US consumers felt more confident about the economy in April whereas a key gauge of manufacturing recommended the sector was slowly rising out of a deep fall.

 

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A stronger shrink in the European economy led the Euro towards a downfall, the worries about the Canadian financial system propelled the CAD higher and although Swiss retailing strike the expectations, the Swissy got elevated on the concerns about the central bank intervening in the currency.

Except of the Japanese yen the USD closed stronger against all of the other major currencies, in this week. On Friday the Euro (Euro/USD) fell 150 pips as the European economy contracted the most in 13 years, recovery will be slower than expected.

 

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There has been a come back of skepticism on stock trading and the market is reacting in conditions of a bounce back in the USD and the Stockholm-based SEB currency.