The World Trade Organisation is refusing to be taken in regarding co-ordinated talks of a global economic revival. It cut its forecasts on Monday for trade growth, due to Europe’s weak economy. The WTO now expects world trade to expand by 2.5% in 2013, down from 3.3%. It also lowered its 2014 forecast to 4.5%, from 5%.
World trade is expected to grow by 2.5% this year and 4.5% in 2014, the World Trade Organization’s new chief Roberto Azevedo said on Monday, revising down their previous estimates of 3.3% and 5%.
Azevedo said the figures will be detailed in a report to be released on September 19th. He states that the forecasts had been cut because the European Union had been expected to recover in the second quarter of this year, but was now expected to bottom out in the third quarter.
So once again we’re the recipient of a a prediction that is out of step with many other market intelligence, particularly that from our source at Markit Economics, which have been incredibly bullish of late. It would be worth bookmarking September 19th to discover the full extent of the WTO’s predictions.
Market overview
The DJIA reversed its previous bearish direction to finish at 15036 on the day, closing up by 0.85%. The SPX closed up 0.94% and the NASDAQ up 1.13%. Confidence was buoyed due to a potential appeasement regarding the Syrian crisis and little in the way of negative news on a relatively slow high impact news day.
European markets then took their lead from the USA, reversing earlier losses to mostly finish down marginally on the day. The STOXX European index closed down 0.18%, UK FTSE down 0.25%, DAX up 0.01%. The Irish exchange closed up 1.16%, the Athens exchange up a stunning 4.05% on the day and the Istanbul exchange closed up 3.65% on the day.
Equity Index Futures
Looking towards Tuesday’s open the DJIA equity index future is currently up 0.85%, the NASDAQ up 1.13% suggesting that USA markets will open in positive territory. European indices are less bullish with the UK FTSE equity index future down 0.19% CAC down 0.28% and the DAX equity index future currently up 0.20%.
Commodities
ICE WTI oil fell by 0.91%, due to the lessening of Middle East tensions, to end the day at $109.52 per barrel. NYMEX natural rose by 2.12% at $3.60 per therm. COMEX gold finished the day at $1386.70 per ounce up 0.01%, whilst silver finished the day up 0.02% at $23.62 per ounce.
Forex focus
Sterling rose 0.6 percent to $1.5722 late in the London session after advancing to $1.5733, the highest level seen since June 17th. Sterling was little changed at 84.30 pence per euro after appreciating to 83.92 pence on Sept 6th, its strongest level since Jan 24th. Sterling rose to its highest level versus the dollar in 12 weeks as U.K. Chancellor of the Exchequer George Osborne said Britain’s economy is “turning a corner” and is in the early stages of a recovery. The pound has risen 7.3 percent in the past six months, the best performer among 10 major currencies tracked by the Bloomberg Correlation-Weighted Index, due to optimism that U.K. growth is accelerating. The dollar gained 1.3 percent and the euro advanced 3.4 percent.
The yen depreciated 0.5 percent to 99.58 per U.S. dollar. It reached 100.23 on Sept 6th, the weakest level since July 25tb. Japan’s currency dropped 1 percent to 131.99 per euro. The dollar fell 0.6 percent to $1.3255 per euro, after advancing 0.3 percent last week. The dollar fell on speculation that lower-than-forecast job growth may prompt the Federal Reserve to be less aggressive when tapering its monetary stimulus.
The U.S. Dollar Index, which measures the dollar versus its 10 major peers, fell for a second day and touched its lowest level since Aug 28th before trading at 1,027.65 late in the New York session.
The Aussie dollar rose 0.5 percent to 92.28 U.S. cents after touching the strongest since July 29th. Australia’s dollar, down 11.2 percent this year, strengthened after data showed exports rose more than expected in China, its biggest trading partner. Overseas shipments rose 7.2 percent in August from a year earlier, the General Administration of Customs said in Beijing on Sunday evening.
Fundamental policy decisions and high impact news events scheduled for September 10th
Tuesday sees very little in the way of high impact news events. However, in the overnight/early morning session China publishes its retail figures, predicted to print at 13.3% up marginally, and industrial production, predicted to rise to 9.9% from 9.7% the previous month.
The USA sees the publication of the NFIB small business index, and the JOLTS job openings. JOLTS measures job openings during the reported month, excluding the farming industry. It’s released late, but can impact the market because job openings are a leading indicator of overall employment.
