Week Ahead: Markets Watch Iraq, Oil, Fed, Earns
Sky high stock markets face threats this coming week with the unfolding
crisis in Iraq that has pushed oil prices up to a nine month high, and
the Federal Reserve’s policy statement that may give some clues on the
timing of higher interest rates.
On Wednesday, the Fed will finish its two-day policy meeting and is
expected to continue reducing its huge bond-buying stimulus measure by
$10 billion a month.
Further, investors will as usual pounce on any hints — real or imagined —
as to when when the Fed is likely to begin raising interest rates.
This week also bring a huge amount of corporate news as mergers and
acquisitions activity continues at pace and companies reporting earnings
will include Oracle, FedEx and Adobe Systems.
Also, Amazon.com may unveil a smartphone product on Wednesday.
The initial public offering of London-based trading information company Markit is expected at some stage this week.
US industrial production updates are due on Monday, with US housing starts and building permits expected on Tuesday.
Stock markets have been on a tear for a long time, with equities making up a growing slice of the public’s wealth.
Boston Consulting Group reported recently that global private financial
wealth grew 14.6 per cent to $152 trillion at the end of 2013, with
stock market wealth driving this growth.
The events of the coming week could test the market’s confidence.
India’s Forex Reserves Surge to $312.58 Billion in Week through June 6
The Indian foreign exchange reserves accelerated to $312.58 billion
in the week through June 6, an increase of $203.2 million, according to
data compiled by the Reserve Bank of India.
The growth, the first one after two successive weeks of decline, was
mainly due to a quick jump in the value of international currency
holdings. The forex reserves had earlier declined by $273.8 million to
stand at $312.38 billion in the week through May 30. In the week through
May 23, the reserves had lost $2.26 billion to stabilize at $312.65
billion, reported the Times of India.
RBI’s data showed that foreign currency assets, which constitute the largest segment of the foreign exchange
reserves, rose by $338.9 million to $285.63 billion in the week through
June 6. The foreign currency holdings had declined by $269.3 million to
stand at $285.29 billion in the week ending May 30. Foreign currency
assets, which are usually denominated in the U.S. dollar, take into
account the depreciation or appreciation of non-US currencies held in
reserves such as the yen, pound, euro and sterling.
The country’s reserve position at the International Monetary Fund
rose by $37 million to close the week at $1.71 billion. The valuation of
India’s special drawing rights (SDRs) shot upwards by $2.7 million to
$4.45 billion. Nonetheless, the valuation of gold reserves declined over
the week after having stagnated at $20.79 billion from May 2. The value
of gold reserves fell by $175.4 million to close the week at $20.79
2014-06-16 03:20 GMT (or 05:20 MQ MT5 time) | [AUD - RBA Assist Gov Kent Speech]
Unemployment Rate To Remain Elevated In Coming Years - RBA's Kent
Labour demand has improved over the recent months after the slowdown
in labour demand and supply in the recent past, although the jobless
rate is expected to remain elevated in the coming years, Christopher
Kent, Assistant Governor of the Reserve Bank of Australia, said on
Monday in his address on Labour Market Developments.
previous year, demand for labour was affected by the decline in mining
investment, decline in trade, high level of exchange rates and weak
growth of public demand.
The labour supply was affected as a
consequence of a discouraging effect from the decline in demand and also
due to ageing population, he said.
Kent noted that wages declined steadily due to the labour demand-supply weakness.
decline in wage growth has contributed, at the margins, to a turnaround
in the real exchange rate and helped cushion the effect of slower
growth of domestic demand on employment growth. It has also helped to
contain domestic cost pressures thereby offsetting the effect of the
lower exchange rate on consumer prices" Kent said.
noting that the demand for labour has improved over recent months, with
some of that reflecting a 'catch-up' after a period of weak employment
growth last year, Kent said some forward-looking indicators are higher
than they have been, though they are still at levels consistent with
only moderate employment growth in the next few months. The Assistant
Governor added that the central bank's latest forecasts are for
employment growth to pick up gradually over the next two years.
unemployment rate, though forecast to remain high in the upcoming
years, is expected to decline later in 2015 when GDP growth is expected
to pick up, he added.