The G-20 does not give the desired impetus to investors in Asian trade today, it is felt by most of the shares in the region reported a decline. After meeting the most developed economies, held in Canada this weekend, was circulated communique, which gives a greater grace period for banks to increase their capital and liquidity and which promises to strike a balance between fiscal consolidation (reducing the deficit ) and the ongoing measures to stimulate the fragile economic recovery. Meanwhile, one of the biggest players in the forex market – John Taylor, who runs the biggest currency hedge fund FX Concepts LLC stated that “we are very scared some owners euro. Taylor predicted with great accuracy the decline in the single European currency had two months, said he hoped the depreciation of the euro should not last longer than August. Asia-Pacific MSCI Asia Pacific Index closed with a fall of 0.1 percent. Nikkei fell 0.45% (due mainly to the strengthening of the yen forex market that Japanese exports more expensive), Hang Senga rose by 0.49%, Shanghai Composite fell by 0.58 percent, while South Korean Kospi index rose by 0.13 percent, says Finance.news.bg . Before the official start of trading in Wall Street index S & P 500 reported a decrease of 0.1%. European index futures 600 Euro Stoxx went up after last week they reported the first index to decline last month. FTAE100 futures rose by 0.6%, the DAX by 0.5% and 0.9% CAC40.
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U.S. intends to pressed their economic partners of G20 is not rash with plans to tighten fiscal policy, while recovery in the global economy still looks uncertain, says the Wall Street Journal. U.S. President Barack Obama expressed concern that the context of fragile global economic recovery may again fall into a recession if government incentives are withdrawn too quickly, as happened during the administration of President Herbert Hoover in the 30 years past century, soon after the start of the Great Depression. Obama will call on leaders of the G20, which will meet in Toronto this weekend to extend their programs to stimulate the economy and thereby promote economic growth. Meanwhile, governments worldwide adopted measures to cut spending and tightening fiscal discipline. Especially wary European leaders have proved over the situation in Greece, where the huge debt and the prospect of bankruptcy of the state scared investors and led the European Union and the International Monetary Fund to adopt a rescue plan for nearly a trillion dollars. Representatives of the Chinese government stressed that if the programs to stimulate the economy be maintained, this can create financial bubbles that will generate risk. Analysts say one reason why China announced on Saturday that will allow some flexibility in its currency, is inflation, making the country imports more expensive. Furthermore, fiscal policy and other topics, which are expected to be discussed at a meeting in Toronto, have low levels of consumption and large trade imbalances of Germany and Japan.
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The unexpected increase in new applications for unemployment benefits in the U.S. last week renewed fears about the state of the labor market and the recovery of U.S. economy. As a result, all three major indexes on Wall Street took down sharply in early session today. From the sale of shares suffered most manufacturers of durable goods, including Caterpillar, Boeing, Honeywell and Deere. Their share dropped by over 1% in morning trade. The index of 30 largest and often traded U.S. companies Dow Jones IA decreased by 0.7% to 10 338.19 points an hour after the start of the session. The broader S & P 500 lost 0.6 percent to 1 107.61 points and Nasdaq Exchange main index Nasdaq Composite fell by 0.7% to 2 291.05 points. All three stock closed yesterday Measure volatile session of the neutral zone after repeatedly changed its direction of movement. The series of U.S. economic data today showed that prices of consumer goods fell for the second consecutive month in May, and initial unemployment benefits rose unexpectedly last week. Meanwhile, it was clear that the growth of imports at the beginning of this year has increased and the negative balance on current account of the country to 109 billion dollars in the first quarter. Shortly thereafter came the data for the index of leading indicators, which predicts the development of the U.S. economy in the future. He rose for the 13th time in 14 months, adding 0.4 percent on a monthly basis in May after April remained unchanged.
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Year after China called on U.S. fiscal policy “irresponsible” Asian country shows signs of increasing confidence in the policies of U.S. President Barack Obama. This is evident from the data on the size of China’s position in U.S. government bonds. In March and April this year grew by 2.6 percent to 900.2 billion after last year between November and February that she was reduced to 6.5 per cent. So long series of negative has been reported a decade, official data showed. During the two months considered China increased its position in U.S. government bonds with 22.7 billion dollars. This is only part of the increase in foreign assets of the Asian country, which amounted to 205.2 billion dollars. Purchases in recent months have focused on the acquisition of long-term U.S. debt. Unlike now, in 2008 China increased mainly purchases of short-term bonds. For the 12 months to the end of April this year the increase of the position in U.S. bonds with a maturity of two years or more with 46 percent, data show. With the acquisition of long-term bonds China helps the U.S. to keep its funding costs at a record low. Analysts also support companies and consumers in the U.S. and accelerates the process of economic recovery.
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The crude oil price started running down months, which was caused by weak economic indicators for the eurozone and China. They gave new strength to the speculation that the recovery of global economy from the crisis is slowing. During yesterday’s trading session in New York oil price with delivery in July fell 1.9 percent to 72.58 dollars a barrel. At a certain point of black gold trade was moving with a decline of more than 3 percent as analysts said the main reason for this data were to fall in the PMI index for China May. This morning oil lost another 0.35 per cent to 72.24 per cent, even at night to travel with a decline of over 1 per cent. Thus black gold continues its series of negative, which in May remove 14 percent of its value. Among the key to oil market news was the failure of BP’s shares, which yesterday reported its strongest decline in the past 18 years. They dropped by 13 per cent to 4,3 pounds after the number of forecasts for the cost of cleaning up after the Gulf of Mexico oil platform accident with the company there. Yesterday in London, Brent crude from oil fell 2.6 percent to 72.71 dollars a barrel.
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The Index Dow Jones Industrial Average experienced the worst May of 1940, and many hedge funds that have performed remarkable well in the months after the collapse of Lehman Brothers, suffered heavy losses. According to data from HFRX Global Hedge Fund Index, hedge funds in the U.S. lost an average of 2.7 percent in May, against the debt crisis in Europe, the subsequent decline in shares, the euro and commodity prices, and melt the difference between yields on short and long-term U.S. securities. This is the most significant decline in hedge funds in November 2008 when for months they lost an average of 3% resulting from the bankruptcy of Lehman Brothers in September. Almost every investment strategy has been losing in May, comment from Chicago-based Hedge Fund Research Inc. Dow Jones Industrial Average sank by 7.6 percent due to fears that problems with the Greek debt will be spread to Spain and Portugal. Profits of some of the most famous hedge funds this year were deleted. “Trying to manage risk in an environment where anything can go wrong, goes wrong, it is a lost cause,” said Brad Baltar, director of Boston-based Balter Capital Management LLC. “The only defense which seems to act like this in months, is to pay everything in cash.
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