Stock prices fell in Europe and United States last week on worries on corporate earnings. Stocks also fell in early morning trading in Asia on growth concerns ahead of the third-quarter corporate earnings session. The Euro slipped against the USD on lack of clarity over Spain’s bailout prospects. EURO/USD trade at 1.2901. The dollar index against a curve of six major currencies is up 0,3%. The stronger dollar is undermining dollar denominated commodities. Copper is falling to its lowest level in two weeks. Brent crude is down half a dollar to 114. Precious metals are continuing its fall from last week. Gold drops 20 dollar an ounce trading at 1643. Silver is at 33,20.
European shares are expected to open lower. Futures for the US are flat compared with Friday. The MSCI-index for the South East Asian Pacific fell 0,3 percent. The Japanese Nikkei added 0, 4 %. The forecast for third quarter growth in China is expected to be 7,4% in line with expectations. Some major Chinese firms have issued profit warnings which did not help encourage market sentiments. A decline in Chinese consumer and producer prices in September left scope for policy easing for Chinese authorities to underpin growth.
The US markets wrapped up their worst week in four months led lower by financial shares. More financial institutions are going to report earnings over the next days including Citigroup, Goldman Sachs and the Bank of America. This amid concerns about their shrinking profit margins.
The International Monetary Fund half annual meeting ended in Tokyo over the week end. Federal Reserve’s President Bernanke came under strong pressure from ministers from developing countries. Both the Brazilian, Chinese and to a minor degree the Russian minister of Finance were critical to the world wide effects of monetary easing which put strains on the exports from the developing countries and undermine their currencies by seeing a free flow of cheap dollar entering their markets from the United States. Bernanke countered by stressing that US growth is the very engine for the whole world economy.
Stocks, commodities and currencies are expected to come under heavy downward pressure during the day.
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