Tuesday, July 19, 2011

Global Market Weekly Review, 10 - 16 July 2011

Ireland joined Portugal and Greece as the third euro-area nation to have its credit rating reduced to below investment grade as European Union finance ministers struggle to contain the region’s sovereign debt crisis. Moody’s Investors Service cut Ireland to Ba1 from Baa3, citing the probability that Ireland will need additional official financing and for investors to share in losses before it can return to the private market to borrow.

Trade deficit in the US widened in May to the highest level in almost three years, reflecting a surge in the cost of imported crude oil. The gap grew 15% to US$50.2bn, exceeding all forecasts of 73 economists in a survey and the biggest since October 2008. Estimates ranged from deficits of US$40bn to US$48bn.

The number of Americans filing first-time claims for unemployment benefits dropped last week to the lowest level since April, a sign weakness in the labor market may be starting to abate. Applications for jobless benefits decreased 22,000 in the week ended July 9 to 405,000. Economists forecast 415,000 claims.

US wholesale costs dropped more than forecast in June, restrained by the biggest decrease in energy prices in two years. The 0.4% decline in the producer price index followed a 0.2% gain in May.

Source: ING Funds Berhad

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