|Market||This Week||Last Week||Change|
|Dow Jones Index||18,039||17,906||0.74%|
|Oil (West Texan Crude)||60.80||58.00||4.83%|
|US Cash Rate||0.25%||0.25%||No Change|
Global share markets continued their slippery slide - mainly due to the Greece on the world stage - although Ukraine's financial ministers have yet to make a deal with their lenders. Relations have soured between Greece and its creditors, with the International Monetary Fund leaving negotiations after the latest request for just one reform (increasing the pension age to 63 from 61) was rejected. Hello??? Greece has a massive payment to the IMF at the end of the month so expect some heightened volatility. BTW Germany has recently its retirement age to 67 from 65.
US investors were also concerned about the implications of a Greek debt default and the threat of an interest rate hike ahead of next week's meeting Federal Reserve meeting. However after three days of declines, bargain hunters moved in to drive markets higher on Wednesday, although bond yields continued to rise. Last night Wall Street held onto those gains. Some firmer economic data in the form of improved retail sales showed the economy was gaining more traction on its road to recovery.
European markets fell as Greece rejects any reform deal, and equities lost favour in response to rising bond yields. The Euro got a boost from a widening of Germany's trade surplus in April as exports grew by 1.9%, while imports fell 1.3%. Europeans are also concerned that the US Fed will start lifting interest rates in September, but after six sessions of losses bargain hunters got the upper hand, but uncertainty over Greece capped gains last night after the IMF threw it's hands in the air.
Turkey's ruling AKP party lost their majority in Sunday's elections with the Turkish people expressing their opposition of its domestic and foreign policies, which caused both the country's currency and stock market to tumble. The future of the both the parliament and the country hang in the balance.
China's Shanghai Composite finished last week up 9% as investors hoped for continued stimulus from Beijing. However other Asian markets ended down. Chinese data this week was mixed with inflation up 1.2% last month, producer prices remaining weak and fixed asset investments plunging. On the flip side industrial production and retails sales rose. Japan's economic growth was revised sharply higher in the first quarter, although doubts remain over whether the momentum can be sustained. The Yen surged against the Greenback after the head of the Bank of Japan said a further slide in the Japanese currency was "unlikely".
The price of crude oil has stagnated around the US$60/barrel mark. A slump in Chinese demand was offset by the the US Energy Information Administration raising its forecast for oil demand in 2015. The US EIA also reported a fall in crude inventories last week which supported prices. Last Friday OPEC reaffirmed its oil output target would not change - the supply of oil from OPEC last month reached the highest level since August 2012. Fears of a 'Grexit' caused investors to book profits last night as diplomatic niceties dried up in Brussels.
The gold price halted three days of declines on Monday, as the US dollar and stock markets fell over worries about the Greek debt crisis. Last night the yellow metal fell back again as global stock markets and the US dollar rose on the encouraging US economic data.