Australia closed-out 2009 with another positive quarter. For the full year, the economy managed to expand by 2.4 percent and was the only major economy to remain recession-free for the entire year. By way of contrast, the US contracted by 2.4 percent, while Germany, the UK, and Japan all experienced declines of 5 percent.
Because of its strong growth, Australia was the first major economy to raise interest rates, and just this past week, introduced its fourth rate increase bringing the country’s benchmark lending rate to 4 percent.
Carry Trade
The disparity between interest rates in Australia and other countries – including both Japan and the US which are currently at record-lows – has revived interest in the carry trade. Currency traders earn interest on open long positions, while paying interest on open short positions. If the interest earned is greater than the interest paid, the trader is said to be in a positive carry position, with the net difference being retained as profit.
Source: BBC News
The US economy closed out 2009 on a high note, growing at a rate of 5.9 percent over the final three months. This was slightly better than the Commerce Department’s estimate of 5.7 percent but experts say the economy will not maintain the torrid pace into 2010.
Much of the growth can be attributed to a one-time boost to manufacturing as businesses re-stocked inventories they had allowed to decline during the worst of the recession. While overall growth is expected to be positive during 2010, critics point to the recent drop in consumer confidence, unemployment that continues to run at 9.7 percent, and a record fate of foreclosures as evidence that growth prospects remain weak.
Source: Associated Press
Crude oil is poised for the biggest monthly advance since October as the U.S. economy starts to recover and fuel inventories fall.
Federal Reserve Chairman Ben S. Bernanke said this week the U.S. economy is in a “nascent” recovery. The U.K. emerged from recession in the fourth quarter at a faster pace than previously estimated, a report today showed. The amount of crude stored in tankers fell to 25 million barrels this month from levels of more than 80 million barrels last year, Poten & Partners said.
“Oil has recovered because of the first signs of economic growth,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. “Stocks in floating storage have been diminishing.”
Crude oil for April delivery advanced 28 cents, or 0.4 percent, to $78.45 a barrel in electronic trading on the New York Mercantile Exchange as of 10:52 a.m. in London. A close at that level would mean an increase this month of 7.6 percent.
Bloomberg
