After more than a week of global rallying the world’s markets showed signs of decline today. While the losses were not gigantic it will shake some investors who have been riding the recent rise in the markets. While volume is expected to drop, traders are expected to remain active in the hope that the world’s central banks will continue to hold up their respective economies.
The Shanghai Composite was the day’s biggest loser, falling by a staggering 1.5%. It had been widely expected that the People’s Bank of China would announce one of its trademark policy adjustments over the weekend after negative trade data was released on Friday. When it became obvious that no such changes were taking place and the markets reopened this morning the index plummeted.
The FTSE Eurofirst 300 was down by 0.4%, slightly above the losses of the FTSE All-World and S&P 500 which both fell 0.3%. The fall in New York was accredited to worse-than-expected trade reports coming out of Japan, discouraging investors. The Benchmark was at a five month high at the close of play on Friday. Japan’s Nikkei 225 dropped 0.1% after the stumble.
One Eye on the Eurozone
While all of this takes place in Asia, Europe is still in the back of everyone’s minds. The bond market in Europe has been supporting recent stability within the area, any sign of weakness over the next few days could be catastrophic not just for Europe but for the global economy as well. While the bonds continue to perform positively the Euro has flourished, today gaining 0.6% on the US dollar.
The European Central Bank’s recent claims that it would do “whatever it takes” has driven markets on, with investors encouraged by the lowered borrowing rates currently available to Spain, Italy and Greece.