Global markets rebound on World Bank outlook

Wednesday, January 15, 2014

The World Bank has raised its global growth forecast as markets around the world show signs of bouncing back this year with the recovery in developed markets in particular expected to continue. Growth forecasts for 2014 were revised up to 3.2% from the June prediction of 3% as estimated growth in high income economies was revised from 2% to 2.2% for the year. The World Bank also expects global trade to almost double 2012 levels this year as the demand recovery in developed markets supports export intensive economies. However, the organisation highlighted concerns regarding emerging markets which remain sensitive to US tapering, stressing that any sharp withdrawal of support could see capital flight from emerging markets at an accelerated pace.

3-month LME nickel prices built on Monday’s gains as prices pushed higher yesterday, eventually closing 0.9% higher at $14,340 after breaching resistance at the 200 day MA. Market participants continue to analyse the impact of Indonesia’s unprocessed mineral ore export ban, which saw intraday prices for 3-month nickel touch $14,400 for the first time in three weeks.

Japanese stocks rose during overnight trading following the rally in US equities as the Nikkei rebounded from the previous session’s 1.5% decline, closing 2.5% on Tuesday while the TOPIX accelerated 2% higher. Markets rallied on renewed optimism after The World Bank raised its global growth forecasts, with a weaker yen bolstering support for exporters in particular.

Wall Street recovered much of Monday’s sell-off as benchmark indices rose on better than expected retail sales with the improving outlook also supporting the dollar index above 80.8. Volatility, as measured by the VIX, has decreased significantly since the start of the year, down almost 14% from a reading of 14.23 on 2nd January to 12.28 yesterday. Participants will be closely following key data releases today, with particular attention towards the Empire Manufacturing Index and the US Fed Beige Book as they continue to look for justification of current market values.

3-month LME nickel prices breached resistance in the form of the 200 day MA

LMNIDS03 Comdty LME NICKEL 3 2014 01 15 07 31 47

A weaker JPY supports Japanese equity markets higher

JPY Curncy Japanese Yen Spot 5 2014 01 15 07 54 16


Events for today: Wednesday, 15 January 2014

1330

US

Jan

NY Fed Manufacturing

1330

US

Dec

PPI Core

1530

US

w/e

EIA Energy Stocks

All times UK Local Time

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Topics: Nikkei, JPY, TOPIX, DXY, LME, Nickel
More from: Kash Kamal