The Organization for Economic Cooperation and Development (OECD) revised downwards its growth outlook for the Eurozone countries. The OECD predicted the eurozone economy would shrink in the fourth quarter by 1 percent, and by 0.4 percent in the first quarter of next year.
The technical definition of a recession is two consecutive quarters of negative growth and by these standards, the OECD also predicts a recession for the UK with a 0.03 percent contraction for the 4th quarter, and a 0.15 percent contraction for the first quarter of the new year.
Source: BBC News
US Gross Domestic Product slowed to 1.8 percent during the first quarter of the year compared to 3.1 percent for the final quarter of 2010. The actual result fell short of projections by the Commerce Department of 2 percent growth for the economy.
The weaker than expected GDP result likely factored in the Federal Reserve’s decision to complete the current round of stimulus spending (“QEII”) scheduled to conclude in June. The fed also announced yesterday that it would continue to keep interest rates at the current historically low rate capped at 0.25 percent for an “extended” period of time.
Source: Bloomberg
China’s latest growth figures indicate the economy grew by 9.7 percent during the first quarter compared to the same time period one year ago. The exceptionally rate of growth continues to stoke inflation fears however, as consumer prices rose 5.4 percent in March versus March, 2010.
Food prices account have been the driving force behind inflation with a 11.7 percent jump in March alone. Housing prices have also increased dramatically as has demand for oil.
Source: BBC News
Latest figures show that while daily forex volumes have not yet recovered to the levels traded prior to the global credit crisis, investors are once again embracing the forex trade. London continues to lead other financial centers, with average volumes for the beginning of the year to April, averaging $1.747 trillion daily. This is a gain of 31 percent over the same time last year, and when compared to October 2009, represents a gain of 15 percent.
The Tokyo Foreign Exchange Committee noted that the country’s 20 largest banks have combined for a 15.8 percent increase in forex trading during the first quarter of the year. Daily volumes increase to $294.1 billion a day in April, with the USD / JPY currency pair accounting for more than 60 percent of the daily totals.
The US market also made progress towards recovery. Hit hard as hedge funds and large banks curtailed trading during the global credit crisis, the New York Federal Reserve Bank revealed that average US daily volume reached $754 billion in April. This is an increase of 11.8 percent compared to October 2009, and a full 43 percent increase from April 2009.
The US Commerce Department said today that the economy grew by 3.2 percent during the first quarter. The growth was due mostly to a 3.6 percent increase in consumer spending – the largest jump in spending in three years.
The outlook for the rest of the year continues to be for “moderate” growth. For this reason, expectations remain muted for a significant improvement in unemployment which will likely remain in the 9 percent range for the remainder of the year.
Source: Associated Press
