Some Sops for Worrisome Investors as the New U.S. Data Offers Positive Signs
Here are some sops to those who worry about the nearly unanimous expectations that the US slows down in the second half of the present financial year. Offering a rosier picture that the U.S. economic recovery might be still on track, the stocks the US and the EU are lifted up with the release of rather stronger than expected US data as well as optimistic comments from officials of advanced countries. The US data released on data Thursday, on labor conditions and business activities signaled for the US economy may somewhat continue to maintain some recovery.
As per the data released on Thursday, the US trade deficit shrank more than estimation in July as exports expanded highest in one year; and the new claims for unemployment insurance fell more than expected. The data has been positive for last few days compared with that of August month. Fear of double dip recession for the recession kept investors away from being active in August month and the present data, though not up to the mark for cautious people, have pulled some investors into activity.
Japan's Finance Minister Yoshihiko Noda said the ministry was conducting simulations on forex intervention, though the Japanese currency hardly budged as the perception remains that Tokyo is unlikely to intervene until the U.S. currency falls near 80 yen. But the governor of Bank of Japan undermined the minister’s comments as he said he did not discussed about valuation of currencies and monetary policy at a government meeting.
End of the day...
At the end of the day, it appears markets or in dilemma about policy actions of the Europe and Japan and almost likely signs of the US slowdown. Austerity measures and fiscal tightening in the Europe, slowing growth estimations for second half of the present financial year in the US and continuous appreciation of the yen and hence the people’s wariness to spend for consumer goods have led to fears that the world economy as a whole is slipping into slowdown led again by the U.S.