Binary Options News : June 13, 2013
Asian Stocks Plummet on World Bank Forecast
Asian markets experienced strong volatility in overnight markets as the World Bank reduced its global GDP growth forecast for 2013 amidst fears that the central banks of the world may pare monetary stimulus.
The world bank now expects China – the world’s second largest economy to grow at rate of 7.7% for 2013, down from the previously projected 8.4%, raising concerns over the Chinese investment-led growth model. It also reduced its global growth forecast from 2.4% to 2.2% sending stocks down across Asia and the USD/JPY dropping below 95, causing a multitude of stop loss orders, that saw the Nikkei 225 fall over 5%, making the decline over the last 3 weeks, approaching the 20% mark. The slide continued even though the Bank of Japan proposed to purchase 200 billion JPY of bonds with maturities of 10 years or more and 450 billion JPY of bonds with maturities between five and 10 years.
Asian stocks took a pounding in overnight trading, led by Japan’s Nikkei 225, currently down 5,62%. The Chinese Shanghai Composite Index opened for the first time this week after being shut for a 3 day public holiday and promptly dropped 3.87% on the back of the world bank reductions in Chinese and global growth forecasts.South Korea’s Kospi Index was 1.19% lower, Hong Kong’s Hang Seng Index fell 3.01% whilst Australia’s S&P/ASX 200 fell over 1% for a second consecutive day after the Australian Bureau of Statistics reported unchanged Australian unemployment at 5.5% for last month.
The USD reversed some its gains made yesterday as a safe haven investment as monetary uncertainty and the waiting for key US Data meant sharp declines for the greenback – falling 1.78% against the JPY, down 0.39% against the CHF and down 0.19% against the EUR. The AUD continued to decline against the USD – falling 0.36% despite decent enough jobs data,
Despite a weakening USD, there were falls across the board in the commodity markets, as investors wait for Thursday’s key data. Gold fell 0.32%, Silver was down 0.04%, whilst Crude Oil was down 0.63% as Middle East unrest and global growth forecasts played on investor minds.
The high volatility seen in Asia is expected to continue into European markets as an ECB Monthly report is followed by an Italian long term debt auction. However, it is later in the day in the US which is expected to grab traders attention as jobless and retail sales figures are published, with increases in both anticipated.
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