With many dramatic series moves that keeps investors on edge, global markets has been having no let-up. Since the year 2013 September, with stocks hitting their lowest level, global inquiries are nearing a bear market. In Europe, a deepening rout in European banks is dragging everything down.
A bad week for Banks
It has been a particularly bad week for Banks, The latest to miss earnings estimates was Societe Generals, dropping the most since 2011. 27 –years low was the slid made by credit Susse Group.
A signal of concern is made by financial markets on Central Banks being powerless on propping the global economy. Compared to 2008 financial crisis, European banks are having a worse time.
Stock rout is being compounded by a slide in energy and mining producers. The second biggest miner worldwide, Rio Tinto Group, slashes its dividend after the annual profit was reduced by half by tumbling commodities prices. Oil is approximately 12-year low.
Gathered in London for this year’s International Premium week, oil producers and traders see no recovery any time soon. As Iranian exports increase, the world is awash with oil after the removal of sanctions and U.S crude inventories remain swollen.
Gold Triumphs .
As investors sought to refuge from the stock market tumble in this year, gold soared to be the highest.
Janet Yellen, Federal Reserve hair suggested that ther may be a delay in raising interest rates by the the U.S Central Bank and this drives the fight to gold. There’s no interest paid by gold and this boosts the prospect of lower interest for longer
Flee to U.K
A demand for the relative safety of U.K sovereign debts is being boosted by the stock market rout. The interest payable on the nation’s government bonds has been reduced by this and the ten years gilt yield is sent to the lowest on record.
Profits in gilts were realized after Yelled added to warn in the markets that falling stocks posed a risk to the economy.
Yen aided by tension
On another safe –haven asset Japanese Yen is helped by the tumbling stocks and tension that is rising between North and South Korea. Within 15 months, in rose to its strongest level and climbed against every major currency though this is not all good news. While traders speculate that that the Bank of Japan May intervene, the yen rally is threatening to undermine three years monetary stimulus.