Arab Today, arab today markets headed for stormy months but no crisis
Last Updated : GMT 01:36:29
Arab Today, arab today
Arab Today, arab today

Markets headed for stormy months, but no crisis

Arab Today, arab today

Arab Today, arab today Markets headed for stormy months, but no crisis

Paris - AFP

Markets are heading into a stormy few months after the US Fed pricked the euphoria which pushed share prices to record highs, but turbulence does not mean a return to crisis, analysts say. After elation over Japanese efforts to stimulate the economy out of two decades of deflation and stagnation sent shares soaring in May, indices in many countries tumbled about 10 percent. Yields on government debt have also risen and emerging markets have been hit by large capital outflows. \"What affected the markets was the announcement of the Fed. This is what triggered the volatility,\" said Olivier Garnier, chief economist at Societe Generale bank. On June 19 Federal Reserve Chairman Ben Bernanke signalled that the US central bank could begin winding down its asset purchase programme and stop it altogether in mid-2014 if the US economy continues to recover. Equities markets plunged for several days before recovering some ground this week, while the yield on 10-year US Treasury bonds shot up nearly 18 percent in one week to levels above 2.5 percent unseen for two years. \"The markets don\'t really know which way to go. There is uncertainty, which has a price, volatility,\" said Rene Defossez at Natixis investment bank. \"The Fed has flipped a switch that will disturb the markets for a while.\" The shift in US monetary policy pushed investors to reduce their higher risk investments. The rise in sovereign borrowing costs, if it continues and filters through to higher rates for mortgage and consumer loans, could also hit the recovery of the US economy. But markets have had more to worry about than just anticipating the Fed\'s actions. The slowdown in China\'s economy and a credit crunch at its banks have also sparked concern among investors, as has the limping recovery in the eurozone. Nevertheless, analysts don\'t expect the current volatility to degenerate into a full-blown crisis, saying the situation is still far from the chaos of the summer of 2011 when fears of a eurozone breakup swept the markets. \"This is not an end-of-the-world climate,\" said Romain Boscher at Amundi asset management. But stock brokerage Aurel BGC noted \"the scenario is getting more difficult for investors\" as recent developments force them to review their strategies and \"concentrate more on economic perspectives.\" The easy-money policies pursued by the major central banks \"had hidden the bad surprises on the world economy: Chinese growth has slipped, the US economy has slowed in the second quarter, Europe is having difficulty getting out of recession,\" added the brokerage. Boscher said: \"We are entering into a phase in which liquidity is less abundant, but which is still quite ample\" due notably to stepped up stimulus by the Bank of Japan. And the European Central Bank stands at the ready to help eurozone countries that run into trouble on borrowing markets. \"You have to distinguish between the start of a return to normal from a panic,\" said Boscher, noting that the most violent swings were in assets considered the most risky such as some emerging market debt and currencies. \"There would have been panic if the strategy of the Fed was seen as premature and the American economy was not sufficiently strong to afford higher market rates,\" said Defossez. A sustained rebound in share prices and a decline in bond yields cannot be excluded, according to Boscher. Many of the investors who pulled out their money as precaution could easily pump it back in once the storm clouds lift. Analysts at Moneycorp noted that \"investors really want to believe there will be no sudden shift from the stimulus of quantitative easing to the tightening of policy with higher interest rates.\" The Fed is currently pumping out $85 billion (65 billion euros) a month into the US economy via bond purchases, a type of monetary stimulus known as quantitative easing.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today markets headed for stormy months but no crisis Arab Today, arab today markets headed for stormy months but no crisis

 



Arab Today, arab today
Arab Today, arab today US, Britain ban laptops on flights

GMT 07:36 2017 Wednesday ,22 March

US, Britain ban laptops on flights
Arab Today, arab today Sheds light on major steps in 12-year career

GMT 06:07 2017 Monday ,27 February

Sheds light on major steps in 12-year career
Arab Today, arab today Hezbollah commander killed by own men

GMT 07:43 2017 Wednesday ,22 March

Hezbollah commander killed by own men
Arab Today, arab today Tunisian media host praises her new experience

GMT 12:35 2017 Wednesday ,15 March

Tunisian media host praises her new experience
View News in Arabic - Business: أسواق مالية
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Yemeni official warns education is under threat

GMT 12:03 2017 Tuesday ,14 March

Yemeni official warns education is under threat
Arab Today, arab today 2017 already marked

GMT 15:25 2017 Tuesday ,21 March

2017 already marked
Arab Today, arab today Prepares to give stargazers an eyeful

GMT 13:38 2017 Monday ,06 March

Prepares to give stargazers an eyeful
Arab Today, arab today Renault Trezor wins design award

GMT 11:56 2017 Tuesday ,21 March

Renault Trezor wins design award
Arab Today, arab today Palestinian police wage war

GMT 07:53 2017 Friday ,17 March

Palestinian police wage war
Arab Today, arab today Dalia Mustafa believes in the presence of ghosts

GMT 07:39 2017 Monday ,20 March

Dalia Mustafa believes in the presence of ghosts
Arab Today, arab today Mexico threatens to ditch US corn imports

GMT 10:34 2017 Tuesday ,21 March

Mexico threatens to ditch US corn imports

GMT 19:27 2017 Saturday ,11 March

Boualsof launches "Priestess Kahina" collection

GMT 16:41 2017 Monday ,20 March

Preserving the memory of glaciers

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"

GMT 14:17 2017 Monday ,20 March

Cholesterol-slashing drug not impair brain

GMT 17:08 2017 Saturday ,18 March

Reveals secrets of tourism flights to space

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons

GMT 15:42 2017 Saturday ,18 March

HTC U Play now available in KSA

GMT 22:39 2017 Thursday ,09 March

Zuhair Murad presents his new collection "Resorts"
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday