Disappointment all round – Japan, the US and oil prices fail to excite
It will be an interesting week ahead for markets after the Bank of Japan's latest efforts to stimulate the economy failed to excite market participants; the US reported weak second-quarter GDP data; and oil prices took a fresh slide.
Starting with Japan, where the Bank of Japan decided last week not to cut the interest rate or to increase quantitative easing.
- sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
Published on 03 Aug 16
-
-
Venezuela tension heats up
Duration 03:16
-
Aussie dollar surprises market
Duration 03:10
-
Markets climb as investors watch US healt...
Duration 02:31
-
-
It will be an interesting week ahead for markets after the Bank of Japan's latest efforts to stimulate the economy failed to excite market participants; the US reported weak second-quarter GDP data; and oil prices took a fresh slide.
Starting with Japan, where the Bank of Japan decided last week not to cut the interest rate or to increase quantitative easing.Sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
-
Venezuela tension heats up
Duration 03:16
-
Aussie dollar surprises market
Duration 03:10
-
Markets climb as investors watch US healthcare bill
Duration 02:31
Starting with Japan, where the Bank of Japan decided last week not to cut the interest rate or to increase quantitative easing.
The Bank of Japan did decide to increase purchases of equity-linked exchange-traded funds. The ETF purchase announcement did at least help the equity market to rebound even though the Yen strengthened.
In the US, GDP grew by a disappointed. The only good news was that consumption increased significantly.
Looking ahead to the second half of the year, there are still some reasons to remain optimistic. For example, the drag from mining-related investment will fade, residential investment should recover and net exports ought to benefit from the stabilisation of the US Dollar.
Concerns about the ongoing oil glut continue to hammer prices, with Brent Crude heading towards $42 a barrel for the first time since April.
The latest slide comes as energy traders are storing more crude off the UK coast, with some parking as much as two weeks' worth of UK production on supertankers. They are struggling to find buyers as demand from refiners has slipped after they produced too much gasoline in the first half of the year.
There are signs, however, that the oil market has made progress since prices slipped to a 13-year low of less than $30 a barrel at the start of this year. Global crude oil inventories have started to draw and forecasts remain for the market to come closer to balance by the end of this year.
The stronger US dollar has also helped cause some of the weakness in dollar-priced commodities like crude.
Finally, a word on Australia where the Reserve Bank cut its policy rate to 1.50% on Tuesday. The next major news for Australia is retail sales due out later this week which should confirm that Australian consumers remain strong.