On Thursday global microeconomic news from exerted pressure on markets. US GDP growth in first quarter of 2012 was lower than expected (a 2.2% increase was expected, but it resulted to be 1.9%). A prognosis on consumer expenditures increase also adjusted towards decreasing (it was stated before that the increase would be 2.7%, but later the number lowered to 2.5%). There is a development and the economy must recover, but the unemployment rate does not seem to be decreasing.
The rating agency Fitch also lowered the estimated numbers of prognosis on the development of developing countries of Asia. Thus anticipated 6.9% turned into 6.3%, which is connected to increase of external risks that hamper the development of exporting from the region.
On Thursday the information about microeconomic development of Great Britain became available. The GDP in the first quarter decreased by 0,2% (this indicator was predicted at the level of -0,1%), and more importantly a deficit of balance of payments has increased significantly to more than 11 billion pounds (with estimated 9 billion pounds).
If the news about “nonfulfillment” of results of the USA and Asia bring negativity to markets, the news from Eurozone can prevent the spreading panic.
At the moment there is a European Union summit on debt crisis issues conducted in Brussels. But the worst part is that the participants can’t develop a single strategy of recovery from recession. And that makes investors get rid of Euro. Jorge Soros announced that “Euro” Project may collapse unless the necessary steps for solving the issue are taken at the summit.
On top of that there is increasing profitability of public bonds of Spain, that are not popular, increased unemployment in European provider Germany, bond placement of Italy also fails.
Under such conditions markets turn into money and there is a definite reduction in all markets, except for dollar, where capital eventually goes to.
To change the sentiment and to resume the weak growth that was noted earlier, it is essential to tell the markets when the European debt crisis will be solved, since the problems of European Union influence negatively economic activity of the whole world economy. The markets will consider any single strategy of ending the debts a solution. In case Europe does not unite, the markets will stay in a negative zone for a long time.Social button for Joomla