Tuesday, July 12, 2011

Global Market Weekly Review, 3 - 9 July 2011

European producer-price inflation slowed more than economists forecast in May as the economic recovery faltered and oil prices retreated. Factory-gate prices in the euro region increased 6.2% from a year earlier after rising 6.7% in April. Economists had projected a gain of 6.3% in a survey. Prices fell 0.2% from April, when they rose 0.9%.

European investor confidence rose for the first time in four months in July after oil prices retreated and the economy gathered strength. An index measuring sentiment in the 17-nation euro region rose to 5.3 from 3.5 in June. A gauge of current business conditions climbed to 19.25 from 18.50, while an indicator of expectations advanced to minus 7.75 from minus 10.50.

Portugal’s credit rating was cut to below investment grade by Moody’s Investors Service on concern the country will need to follow Greece in seeking a second bailout. The long-term government bond ratings were lowered to Ba2 (junk) from Baa1, and the outlook is negative.

Australian retail sales unexpectedly fell and building approvals dropped in May by the most in four months, sending the nation’s currency lower on expectations the central bank will extend a pause in raising interest rates. Sales dropped 0.6% from a month earlier and permits to build or renovate houses slumped 7.9%. That compares with the median forecasts of economists for a 0.3% gain in retail sales and a 0.5% drop in approvals.

Source: ING Funds Berhad

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