28 January 2010

Bankers Refute Drastic Changes

In Davos (Switzerland) the World Economic Forum is well under way. Day one (yesterday) kicked off with some firey talks between bankers and UK and US administrations.

Big banks are certainly willing to refute that making them smaller will fix the world economic calendar, in particular the way in which large western economies conduct their financial sectors. Yet leaders from the US, UK and now France are all on course to fight a tough battle to make major changes.

Meanwhile, the pound continues a strong performance against the still-suffering euro. How long will Greece's fiscal problems weigh heavy on the Eurozone single currency? Apparently, now Portugal is also beginning to add pressure to the euro.

Critics of the single currency spanning such varying economies will be surely having a field day (or week, even month)!

27 January 2010

Recession is over....Just

The markets certainly wasn't happy with the fact that the UK only just scraped out of recession in the fourth quarter!

Yesterday morning, there was a mood of keen anticipation on where the final figure would lie - would it be as much as 0.4% of GDP growth? Many dared hope, while others went with the lowest forecast of 0.2% just to be on the cautious side.

Well - no-one expected the final number to be 0.1%. So, the United Kingdom did leave the recession - but by a margin.

The pound, which had been enjoying the gains thanks to the positive outlook, took a dive on the news.

Will the UK be the only country with such a dire total? And will the first quarter be better - or worse?

26 January 2010

Sterling Boosted by Fourth Quarter Hopes

Markets are waiting eagerly for an announcement due later today, in which they hope to hear that the United Kingdom exited the recession in the fourth quarter.

The forecast has alredy caused the pound to gain some ground against the euro in this morning's early trading - it gained 0.3 per cent.

Most experts are expecting that growth was somewhere between 0.2 and 0.4 per cent - let's hope that they are right...

If growth is worse than expected then the pound might be first in line to take a beating!

25 January 2010

Shares Fall

The shares and currency market is experiencing a concerning time for traders and investors - thanks mainly to US President Barack Obama's plans for major changes to the banking sector in the US, many large bank shares fell in this morning's early trade (London session).

The currency market also took a hit at the end of last week, with the pound sterling falling against the US dollar.

Meanwhile the dollar fell against the euro and the yen, also because of the Barack Big Bank Shakeup. Currency exchange traders seem to run to the yen whenever there is uncertainty in the US, while selling the dollar in droves.

21 January 2010

China GDP in Double Figures

China's economy is so strong, it has even pushed double figures into the picture for 2009.

This seems entirely different to the struggling recovery of the UK and other western nations, yet China is now on course to take on the crown of World's Second Largest Economy - putting Japan beneath it.

Chinese officials claim that thanks to the 150 million people in China living poverty, it is unlikely that they are strong enough to take over from Japan. Indeed, they remind us that China is still a so-called 'developing country'.

Developing indeed, with GDP at over 10 per cent for the last quarter of last year (when compared with the year before). Many will now be studying their financial charts and data to see how markets react to the news.

19 January 2010

Markets open Cautious

Currency exchange investors are cautious this morning as they await a key speech from the Bank of England's governor, Mervyn King. They are hoping he will give some indication that the current asset-buying scheme will be called to an end. So far, around 11 billion pounds have been spent on the programme.

Meanwhile, the FTSE 100 opened down as investors shied away from taking large positions - this was partly due to them waiting for key earnings data from the US.

And finally, the CPI index for the UK which measures inflation showed an increase for December. Again this is likely to affect markets but many inflation experts say that the jump is likely to be temporary.

Happy Tuesday.

18 January 2010

IMF warns of Double Dip

Watch out for those emerging economies, say the financial advisors. They are the hot tip for many investors and now the head of the International Monetary Fund (IMF) has said that developing nations are recovering much better than the advanced ones.

Mr Strauss-Kahn made his comments while announcing the latest forecasts for the global economy. Overall it is expected that the world economy will grow by 4.1 per cent in 2010.

But Mr Strauss-Kahn warned that developed economies should take care with regards to their fiscal policies - and not remove the strategies too soon, so as to avoid another downward turn.

He said that it would be crucial for governments to tackle their public debts in the coming time - which the UK knows all too well.

Meanwhile, the euro fell to 4-month lows against the pound this morning, reaching to below 88 pence.

15 January 2010

Claims for Credit Cards

People who are thinking of claiming against their lender for credit card charges or a large debt might find it a bit trickier under new guidelines.

The OFT plans to make a matter clearer which until now was often a handy loophole: the 'original agreement' topic...

If the lender was unable to produce an original agreement document within 12 days of the borrower requesting it, the debt became unenforceable. Not bad - but now lenders are likely to be allowed to produce a 'true copy' of the document. This will suffice as evidence against the borrower.

Annoying for those who are already in the process of trying to write off their debts. But there are some things one could do: one could find a really good claims service to try and find a solution. Or one could go to the root of the matter: think carefully before taking a credit card or loan and make sure you are prepared for repayments!

If you think borrowing is not your game, there are alternatives - the prepaid card is a great way to pay without borrowing money.

14 January 2010

German Economy in Trouble?

In a picture of role reversal, the German economy has been told that its economy shrank by a worse-than-expected 5 per cent in 2009. What's going on?

Until now, among the developed economies it was the UK which was the proverbial naughty child in the corner. After having partied hard until the bank crash of the end of 2008, the UK watched its currency fall to near parity with the euro for 2009.

While other nations gradually emerged from the recession towards the latter part of 2009, the UK seemed to be left behind. After all, its fall was far greater than that of its European counterparts France and Germany - they hadn't been quite so careless with borrowing and risk-taking so they didn't have so far to fall.

Yet now it is expected that - finally - Britain will be told that its economy left the recession in the fourth quarter. Meanwhile, Germany is concerned that its fourth quarter results will be less rosy.

Indeed, some even think there may be a sharp fall. Yet there are economists who predict a mild level of growth - but encourage a careful reaction so as not to damage the fragile situation.

13 January 2010

Pound Gains on Good Retail Sales

The pound sterling enjoyed an early week boost this week, as good data on the British economy was released.

According to the figures, retail sales were up year-on-year in December, with many shops reporting good sales figures for the Christmas shopping period. Indeed, on Boxing Day there were some record numbers recorded for some high street chains.

In addition to the good retail numbers, there was better-than-expected news on the UK's trade deficit - it shrunk enough for some economists to predict that the country exited the recession in the fourth quarter.

Currency exchange traders and experts will be keeping a close eye on the pound in the first half of this year, as it reacts to the country's general elections.

11 January 2010

CFDs, Spread Betting - too Risky for New Rules?

Severe weather might be causing new chaos across Europe, but in the financial world there is an air of cleaning up. As the world recovers from a severe period of recession, world leaders are beginning to figure out new strategies for the world economy.

Many wonder about the role of speculative trading - CFDs, Futures and spread betting are all in the spotlight. Will there be great changes to the way that derivatives are traded or will it be business as usual?

According to experts, there are links between the nature of speculation within the financial community, and the fall of many key banks towards the end of 2008. Yet there have been no indications as yet that retail traders (in other words, regular individual investment traders) will be greatly affected by possible changes.

Yet trading in derivatives for large corporations - especially investment banks - might be monitored much more tightly to prevent another breakdown in the future.

07 January 2010

Snow means Oil is Up too!

Snow, snow, snow. It seems to be creeping in everywhere and as usual is leaving a trail of mayhem in its wake.

Everytime a large amount of snow hits the UK, a general chaos hits roads, public transport and general life. Schools close, businesses complain about low sales - pretty much everything can be blamed on the weather when it snows.

One industry is pleased about the cold snap - because demand for its product rises. Oil has gone up in price again, thanks to very cold weather in the UK, Europe and the US.

On Tuesday, New York crude even reached to beyond $80 a barrel. Good news for commdodity investment traders who had been betting on a price rise in the early New Year!

06 January 2010

The Rise and Fall of QE

Apparently QE is working, say analysts based on the latest data release.

QE or quantitative easing is the process whereby a country's government boosts its economy with fresh money.

Sometimes referred to as a money-printing scheme, it is often controversial thanks to the similarities it often draws to incidences in modern history where inflation rose to uncontrollable levels.

Both in Weimar Germany (in the 1920s) and in recent Zimbabwe, so much money was injected into their economies that hyperinflation resulted - making money as good as worthless.

Yet this current QE programme - which the governemnt is using 200 billion GBP for - is apparently much stricter and unlikely to lead to such drastic conditions.

They'd better be right about that!

05 January 2010

Fresh Start as Shares Climb

New Year, New Hope? There are so many clich├ęs at the start of a New Year about fresh starts and new ideas, but there really does seem to be some optimism surrounding financial markets at the start of the working week this 2010...

Share indices, manufacturing, commodities - trading charts showed they were all up on Monday, and not just in particular parts of the world. No, there was good news in the UK, the US, mainland Europe and in Asia!

It is not just Gold that is enjoying an upward trend in the past months - copper, its less glamurous cousin on the precious metals list, is also enjoying a boost. Keep an eye on that, prospective commodity retail traders!

So - does the year ahead show signs of better economic health for nations around the world, or is this just typical for early trade each new year?

04 January 2010

2010 for the Economy and the Currency

It's a new Monday, and a new year to boot. So what will this year have in store as far as Britain's economy, politics and its currency are concerned?

Quite a lot, as it happens...for one, there is a general election in store which could see the first new party for 13 years - a fact which is in itself likely to affect markets and the economy.

2009 was a roller coaster year for the country, with the pound reaching near parity with the euro - a stance which has not altered much and indeed many currency experts are now gathering their views on what is in store for sterling in the year ahead.

Will it reach parity and beyond, falling behind the euro? Or will it start an upward climb once more?