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« on: January 30, 2014, 08:33:12 am »
Fed kept to its plan and reduced monthly bond purchases by $10 billion per month as overall improvement in the US economy is still in place. At least one can say they are consistent in their approach I guess.
Latest buzzword in global market is EM Contagion (that’s us unfortunately) as a cut in stimulus reduces liquidity in emerging markets and causing sell-off, hence rate hikes from Turkey, India & SA yesterday. But to no avail I’m afraid to say, as markets appeared to view the rate rise as insufficient and the rand was down more than 2% after the rate decision at 11.25. Same story for Turkey.
If you've wondered who are the EM Counties, here they are:
BRICS:
Brazil, Russia, India, China, South Africa
MIKT:
Mexico, Indonesia, South-Korea, Turkey
And if you wondered what contagion means, it is not nice either: infection, pollution, corruption, contamination.
So you would be forgiven to think that first world economies are afraid that itty-bitty us and others like us will have a negative impact on their markets and that’s why they are selling off. And we are selling off because they are reducing liquidity in our markets. We'll that my simplistic interpretation of events in any case. Fun times ahead.
DJ -1.19%
S&P -1.02%
VIX +9.81% to 17
IGMT40 Cash +24 points
Eco Calendar:
South Korea on holiday
US GDP 15:30
US Pending home sales 17:00
New lows for Ellies, Reunert, Growthpoint, Shoprite, Aveng, Emira, Acucap, AVI,Massmart, new high Lonmin.
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