Wed, 05 Oct 2011 15:54:00 +0400
Exchange news. The issue of possible default in Greece is extremely topical. Last weekend Athens officially claimed that the country cannot cut its expenditures, as required by the agreements. This, in its turn, casts doubt on the possibility of Greece to receive mutual assistance credit from European Central Bank.
This discouraging claim was followed by a less shocking claim from the European Union management. To be more specific, this claim concerned a temporary suspension with deciding to provide another money tranche to Athens. It had been expected that the decision of providing financial aid would be announced during a special meeting on October 13, but it has just been revealed that there will be no meeting. The decision of providing money trance is expected to be announced during the summit of European Union leaders on October 17.
Unfortunately, this proves that this year Greece is unable to change budget deficit according to the requirements. However, Athens keep worsening their condition by discussing economy measures with ECB, as their main target is to receive 8 mln. Euro from the credit that was confirmed in 2010. Another wave of recession is likely to start because of complicated and lasting negotiations between ECB and Greece. Quotations of Brent and WTI oil futures have immediately reacted to this by a more than 1 dollar decline.
Perspectives of economic growth influence oil price. At this point, signals about countries’ negative development are many. It concerns countries in Europe, the USA, and developing countries, such as China, which eased the loss of world economy in 2008.
Brent grade oil prices are currently checking the support of 101 dollar per barrel, as explained by the analytics of Forex Academy and Masterforex-V Futures Trade and Stock Exchange. This is the fourth attempt for 5 months. Passing the level will make it possible to reach the target of 90 dollars per barrel.
You are free to discuss this article here: forum for traders and investors
The Chinese economy seems to have exhausted its growth potential the way it is now. With that being said, Beijing now has to fight the existing lending bubble as well as the country’s dependence on investments.
Iran is finally free of Western sanctions. The sanctions imposed by the USA and its Western allies regarding the Iranian nuclear program no longer exist, which gives Iran an opportunity to return to the global market of crude oil as a major player.
This year, the global economy is going to be seriously affected by the economic slowdown in China, which is the world’s second-largest economy after the USA. This is what the IMF’s chief economist thinks on the matter. During his interview to IMF Survey, he said that the global economy is going to be seriously influenced by emerging markets, including China as the major one.
Some experts believe that the economic slowdown in China may indirectly affect the political and economic situation in Russia. While, the international community is watching the escalation of the conflict between Saudi Arabia and Iran, Russia is one of those who may benefit from the conflict in the Middle East.
The Fed’s interest rate hike has put an end to the era of super-cheap money in the USA. For other countries including Russia, this means tougher competition for foreign loans and investments. A lot has been said about the Fed’s money printing within the scope of QE as well as about low interest rates. The Federal Reserve ended QE more than 12 months ago. However, the decision to start raising the interest rates was a truly major event for the international community. The decision to raise the interest rate for the first time in 9 years was made on December 16, 2015.
The USSR once had an ambitious goal to outpace the USA in every single aspect. Today’s Russia doesn’t even try to speak about it. Russian politicians are only touching upon some historical and geopolitical missions as well as human spirituality. Apparently, Russia want’s to be a superpower in the modern world.
It is reported that the Fed’s FOMC members are still at odds over the idea of increasing the interest rates as promised. We remind you that the FOMC meeting is going to take place just in a few days (less than a week).