31 July 2012: Asia cautiously optimistic, Eurozone exports improve

MarketsAsia wary on stocks ahead of Central Bank meetings: Asian stocks inched higher but the mood remained cautious ahead of monetary policy meetings by the ECB and US’ Fed Reserve.
•    Stocks: FTSE All World climbed 0.3%, as FTSE Eurofirst finished 1.6% higher; Higher Beta markets in Asia also capitalised, and FTSE Asia Pacific gained 1.4% but Tokyo’s Nikkei slipped 0.5%; S&P 500 is up 3.5% over the last 3 sessions; FTSE 100 finished 1.2% higher at 5693
•    Currencies: Euro is up to $1.2278; Sterling against dollar was unchanged at $1.5716
•    Debt: The German Bunds have gained 1bp to sit at 1.38% while US 10-years gained 2bp to 1.52%; Spanish bond-yields dropped further to 6.52%
•    Commodities: Brent Crude is down 0.5% to $105.93/barrel; Copper fell 0.1% to sit at $3.42/pound; Gold is down at $1622/ounce

Global Economy

•    Labour reforms boost Eurozone exports: According to a recent study, labour reforms in several eurozone countries is helping it build up a healthy trade balance slowly. Since 2008, the countries with more flexible labour policies have been able to improve the quality of their home produced goods to compete internationally. Unit labour costs are also starting to decline in the region, which is a positive sign.

Companies

•    Private Equity assets hit record: Value of assets managed globally by private equity firms have hit a record $3 trillion. The results will provide a boost to the industry, which has been largely struggling lately. Earlier this year, Blackstone raised $16 billion, despite the financial turmoil.

•    HSBC’s performance hit: Regulatory and miss-selling charges have hit HSBC’s performance. HSBC has been forced to take mis-selling charges on insurance and interest-rate hedging products. These amounted to about $1.3 billion. The bank has then had to take a hit of about $700 million for its US arm, which was linked to money laundering.

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