16
MONday, january 27, 2014
guyanatimesgy.com
International Financial and Economic Report Chairman, Guyana Americas Merchant Bank
BY GEOFFREY BELL
Market Summary at 10:30h January 24, 2014
Currencies: Euro Yen Sterling
1.37 102.4 1.65
Treasuries:
2 Year 10 Year 30 Year
Swiss franc Aussie$ Canadian$
0.90 0.87 1.11
Equity Indices since last Friday:
0.34% 2.73 % 3.65%
A
Mexican peso Euro/£ Euro/¥
Dow Jones Nasdaq FTSE Nikkei
detailed forecast from the International Monetary Fund (IMF) is set out in Table I with the biggest growth increase taking place in the United Kingdom (up 0.6 per cent in 2014), which is expanding rapidly. The United States is anticipated to grow 2.8 per cent in 2014 and 3.0 per cent in 2015, while the euro area is expected to move from reces-
sion to recovery. But, increased financial market and capital flow volatility, including a reversal of capital, remains a concern for emerging countries and especially when the Federal Reserve is cutting back on bond purchases and raising medium and long-term interest rates. This is likely to adversely affect countries that have underlying problems such as Turkey where the ex-
-2.3% -0.4% -1.8% -2.2%
change rate has fallen to 2.33, a fall of about nine per cent this year alone. In fact, as can be seen in Table II, world growth since 2007 has not reached five per cent and seems to be stuck in the three per cent to four per cent range. The optimists think that this range will eventually be exceeded while pessimists think that we are in for a long period of low growth and with each per
Table I
Latest IMF Projections % January 2014 Projections
Difference from July 2013 WEO Projections
2014
2015
2014
2015
World Output
3.7
3.9
0.1
0.0
Advanced Economies
2.2
2.3
0.2
-0.2
United States
2.8
3.0
0.2
-0.4
Euro Area
1.0
1.4
0.1
0.1
Japan
1.7
1.0
0.4
-0.2
United Kingdom
2.4
2.2
0.6
0.2
Emerging Market & Developing Economies
5.1
5.4
0.0
0.1
China
7.5
7.3
0.3
0.2
India
5.4
6.4
0.2
0.1
Brazil
2.3
2.8
-0.2
-0.4
Mexico
3.0
3.5
0.0
0.0
World Trade (Goods and Services)
4.5
5.2
-0.5
-0.3
Source: IMF Economic Outlook, January 2014
Market statistics Gold Prices – Guyana Gold Board
Cambio Rates
Fixed as at July 24, 2013 Calculated at 94% purity
Bank of Guyana Cur
Buying
Selling
GBP
$341.97
$346.25
CAN
$185.58
$187.73
USD
$205.98
$208.44
U.S.
$1335.00
Cambio
$202.67
Gross
$254,331
Net
$236,527
Selling
$262,426
Indicators as on January 24, 2013 Live Spot Gold $1269.00
$1270.00
Low/High
$1260.20
$1271.60
Change
+4.40
+0.35
London Gold Fix
Jan 24 USD GBP EUR
Jan 23 USD GBP EUR
AM
PM
1259.25 757.40 920.44
1267.00 768.21 925.90
AM
PM
1244.25 749.91 912.88
1263.00 760.71 924.19
16,074 4182 6708 15,392 cent additional growth amounting to over US$700 billion worldwide. The big news will be announced on January 29 at the conclusion of the Federal Open Market Committee (FOMC) Meeting in Washington about whether to taper or not. This will be the last meeting of Dr Ben Bernanke before Dr Janet Yellen takes over as chairman. On January 20, Deutsche Bank stunned investors with the announcement that in the fourth quarter of 2013 it lost nearly US$1 billion when analysts had expected a profit of US$700 million. This loss reflected a downturn in fixed interest trading, but also in litigation and restructuring costs. Investors are worried that Deutsche Bank is facing more litigation and could find that US$2.3 billion is not big enough as the bank has not yet faced any fines from U.S. and UK regulators over the Libor rate rigging scandal. One view is that the bank will have to add over US$2 billion to its litigation pot in 2014 amid a string of further investigations. To put it mildly, the outlook is not good and could bode
Indicators Crude Oil
Price Silver
Platinum
US$ per barrel
$107.58 USD per Ounce
$19.91 $1227.00
Change %
-0.64 Change %
-0.11 -25.00
Changes: -318.24
% Change: -1.96
Open:16203.29
High:16203.29
Low: 15879.11
% YTD: -4.21
52Wk Hi:16174.51
52 Wk Lo: 12471.49
Table II
IMF World Economic Outlook 2015
3.9%
2010
4.8%
2014
3.7%
2009
-0.6%
2013
3.0%
2008
2.8%
2012
3.1%
2007
5.2%
2011
4.2%
2006
5.5%
Internet marketing methods for small businesses (Continued from Saturday)
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Last: 15879.11
er than expected, with new orders down 1.8 per cent (January 23). Australia’s headline CPI inflation rose to 0.8 per cent in the fourth quarter from the third which was double the consensus expectation of 0.4 per cent. Interest rates continued to fall this week with the 10-year U.S. treasury dropping from 2.85 per cent to 2.73 per cent and the 30-year bond from 3.78 per cent to 3.65 per cent. This means that interest rates on the 10-year area have fallen from 3.03 per cent since December 31, 2013 and the 30-year bond from 3.97 per cent. The euro rose from US$1.36 to US$1.37, the pound sterling from US$1.64 to US$1.65, the Swiss franc from 0.91 to 0.90 and the yen from 104.3 to 102.6. By contrast, the Australian dollar fell from A$0.88 to A$0.87, the Canadian dollar from Cdn$1.10 to Cdn$1.11 and the Mexican peso fell a little from 13.27 to 13.49. Gold prices moved up over the week from US$1248 per ounce and Friday morning were at US$1267. Also, the price of oil moved up from US$94.17 to US$97.21 Friday morning and, not surprisingly, the Dow Jones fell 2.3 per cent.
Investors' guide
Keep it fresh
USD Per Once
Bid/Ask
13.49 0.83 140.0
badly for other European banks. This was a very light week for U.S. economic reporting with almost all the announcements coming out on Thursday. Initial jobless claims rose 1000 to 326,000 in the week ended January 18 and was the first report to show that about 1.35 million unemployed lost emergency extended benefits after Congress allowed the programme to expire at the end of 2013. Sales of previously owned homes rose one per cent in December for the first time in four months. The increase was less than projected and house prices rose 0.1 per cent in November from October and leading indicators rose 0.1 per cent in December after a revised one per cent gain the prior month which that was larger than previously estimated. In overseas news, euro area consumer confidence rose more than expected in January. On the other hand, Chinese data showed that growth is slowing a little and the preliminary numbers suggested that manufacturing trailed estimates in January which dragged down virtually all emerging market stocks. This reading of manufacturing was much weak-
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