While analysts, economists and investors are eagerly waiting to see whether the Federal Reserve raises interest rates after its meeting later this week, Appelbaum drove into the mechanics of how such a rate hike would work in this weekend’s paper.
More than 40% of investors now see weak growth in China and other emerging markets as the main risk to financial markets over the next 12 months, according to a survey published by Barclays on Tuesday.
Shares in Japan traded higher ahead of a Bank of Japan policy meeting later in the day, but most markets in the region were under pressure from a coming interest-rate decision from the U.S. Federal Reserve. Although economists are predicting an only 28 percent chance of a rate hike, countries around the world are all awaiting the most important decision since the 2008 global financial crisis. Turkey’s lira gained on the day but hovered near Monday’s record low as investors geared up for another indecisive election outcome on November. 1. Equity benchmarks in Russian Federation, India and Malaysia climbed at least 0.8%.
“If you just look at the USA economic fundamentals – US data – yes, the Fed should be hiking rates”, Woo acknowledged. The Nasdaq Composite Index edged down 16.58 points, or 0.34 percent, to 4,805.76, Xinhua news agency reported. Brent Crude, a benchmark for worldwide oils, fell 3 cents to $48.22. The result would be a strong dollarstrong>, capital flight from around the world to <strong>USstrong> markets, collapsing emerging markets currencies and stocks, bankruptcies of dollar-denominated foreign corporate borrowers and possible contagion and global panic.
Why? A lower Canadian dollar makes Canada’s products and services cheaper to buy in the U.S. That will be a boon to the Canadian economy, though the link is not quite as tight as it was in the late 1990s when Canada began losing its competitive edge in manufacturing. As of a few weeks ago, the Fed was probably contemplating a larger increase, but now they’ve probably been scared off by two recent developments: “a volatile and jittery stock market, and a strengthening dollar”.
The probability of a move at the Fed’s September 16-17 meeting is about 49%, wrote Mohamed A. El-Erian, the chief economic adviser at Allianz, in a Bloomberg column last week. China’s Cabinet and national economic planning agency approved the theme park project – 13 years in the making – in September last year.
On the corporate front meanwhile, European planemaker Airbus was Monday inaugurating its first production plant in the United States, taking its fight for a bigger market share to rival Boeing’s backyard.The $600-million facility in Mobile, Alabama, is due to eventually employ about 1,000 workers. On the Nasdaq, 1,808 issues rose and 822 fell.
The yield on the 10-year U.S. Treasury bond was little changed at 2.175%.