Forex Fundamental Analysis

In Asia, Equity Markets were down while in London and in the U.S markets finished the day slightly ahead. This is coming on the heels of a horrendous close on Friday in the U.S and CIT's bankruptcy filing over the weekend.

Global Equity Markets were net losers last week. In the U.S the DJIA slid nearly 250 points on Friday. Financials were hit the hardest, led by concerns over CITI's balance sheet and CIT's inability to repay debt and probable bankruptcy filing.

Despite the fact that the US economy officially came out of recession on Friday, last week was a poor one for the world’s major stock markets with all indices losing ground over the course of the week.

Sterling is likely to be extremely volatile this month with several important factors to dominate.

As widely expected, official figures released yesterday have shown that the USA is no longer in recession.

If anybody imagines that the transition from recession to growth would be a smooth one, they are going to be disappointed.

Global Equity Markets were flat Tuesday. In the U.S the DJIA was up a mere 14 points while the Bond Market was up on the back of the largest 2 year Treasury auction to date.

Data from South Korea indicates that the growth rate in the economy is at its highest level for seven years. According to the Bank of Korea, the figures for Q3 2009 show GDP up by 2.9% in the previous quarter.

Oil is pretty much the life-blood of the global economy. To a first approximation, the price rises as economic activity and demand climb; so higher prices for crude are seen in some quarters as the herald that better economic times are ahead.

Economic parameters vary with great speed over the course of a trading day.

As we reported yesterday, the US Treasury announced plans to cap the pay of top executives from firms that received public money to keep them solvent during the worst of the crisis and have yet to pay it back.

The Bank of England monetary policy committee voted unanimously not to pump further money into the UK economy (the strategy known as “quantitative easing”) and to leave interest rates at 0.5%. This move was interpreted by the markets and foreign exchanges as meaning that the UK economy was recovering and was no longer in need of further financial stimulus.

Internet giant Yahoo! announced that its Q3 profits had trebled to $186 million, despite a 12% drop in its sales revenue which fell to $1.58bn. This miracle was achieved on the back of drastically reduced operating costs.

It could be said that crude oil genuinely lubricates the wheels of the global economy; it being essential to many sectors from plastics to transportation and energy generation when processed.

Last week was a quiet event overall for the world’s major stock markets with all indices ending the week in the black; albeit modestly.