In the past week the Bank of England holders, with an unexpected decline of 1.5% for. The initiative was widely meditation as a tactic of struggle for the economic difficulty of the United Kingdom before the important Christmas business. The spread of the yard for several months, have much less influence, because it can take several months to take advantage of a reduction filters for consumers. This is particularly the case currently with the banks until you on the cuts for customers. The BA has sent a message that they are prepared to do so against the background of the threat posed by the global economic slowdown, very seriously. Unfortunately, this message is a double-edged sword, the euphoria that are directly associated with the type of cut, however, was of short duration and low and dragged the FTSE down in the day.
It is also possible that today the reduction of the rate for the less likely that the BA from the new in the near future. The experts have to cuts of this magnitude for several months, but the countries of the Mediterranean in May of the totality of their sentence should be cut in a spectacular deployment of the dice. He May a some time to cut back, but to dust fall into the largest cut in a generation.
Friday’s U.S. numbers were ugly pays any measure, with the presumed loss of 240,000 jobs, slightly worse than expected. The worst of data from the fact, was in the revision of the figures decline in the September payroll, the effect of the September payroll -159,000 to -284,000. This means that, until now, in 2008 more than 1 million jobs have been lost, most of them were in the financial sector, but the depression is in almost all the U.S. sector.
Opposite them, it is perhaps surprising to see the recovery in equity markets on Friday strongly, particularly against the background of the acceleration of unemployment in the world economy. But the reality is that financial markets are essential for the future, which means that in most cases the bad news is already taken into account. Friday’s figures would pay even worse, that they are already in the assessment by the recovery, we are witnessing a significant proportion of cases on Wednesday and Thursday May, the dealers were rushes to sell before the figures on Friday. The result is that the previous two days to sell, seems slightly exceeded.
In the markets funds, labor and swaps of standard continues to improve, the largest financial environment for business. The costs of hedging against the company because its debt is still very high in historical, but they have a long way in recent weeks. Morgan Stanley and Goldman Sachs are still an issue, while the United Kingdom, HSBC currently has the lowest of the CDS other large banks and independent brokers. In short, things have definitely improved since the dark days of October, but there is still a long way to go before they say with certainty that this credit crisis is finished.
Begins in the next week with the IPP figures for the United Kingdom and the ECB president Trichet, a series of speeches with other central banks during the week. The ECB should greatly reduce 50bp in the past week, but there was a bold prediction last-minute court 100bp. Investors are open to all recommendations Trichet on future decisions. Friday, the week promises the most of your day with the U.S. in retail sales and Federal Reserve Chairman Ben Bernanke takes the floor at the 5th Central Conference of the ECB.
In the last week, Morgan Stanley, European strategist Teun Draaisma said that the stocks are now flashing a “house” buy signal. After Draaisma markets already fully prices in the recession and the profits of small investors, operators of buying and selling by analysts to have capitulated. Although very early in the run-up to the takeover in 1998, it was not very far in 2002. His house to sell full-time signals from the peaks of 2000 and 2007, almost perfect, if. In this sense, it would perhaps be the case that the markets have moved into the next handover of the recession, and we wait for what happens beyond.