Mithril Asset management - Weekly Bulletin presented by Square Mile Financial Services
Market Roundup 6th of Feb. 2012Market Roundup: Equity markets continued to progress with confidence. Global equities are off to the best start in 18 years as U.S. economic growth shows signs of accelerating and European leaders move closer to a solution on the region’s debt crisis. The MSCI All-Country World Index rose 5.8% as banks and mining companies rallied 9.3% or better. Global bonds climbed 0.6% and the U.S. dollar fell 1.1%. Markets have been in confident mood for the past month thanks to policy makers around the world allowing for a more accommodative monetary environment. The Federal Reserve announced they remained concerned about the economy’s lack of vigour two years after the 2009 recession, thus prompting a pledge to keep interest rates low at least until late 2014. Quite importantly, further bond purchases to bolster the economy, were not ruled out. China has reduced capital requirements on its banks and increased the lending quotes. India recently cut its cash reserve rate to 5.5%. In an instant, this effectively released $3.2Bln into the system coupled with the $14.1 the Reserve Bank of India has been pumping in since November. The S&P 500 Index edged toward its longest weekly rally in a year, as employment growth beat estimates and the jobless rate unexpectedly declined to 8.3%. The 243,000 increase in payrolls was the most since April and exceeded all forecasts. |
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