“Mann International”– International Economics-(More UK QE Certain)
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Home Page > Business > “Mann International”– International Economics-(More UK QE Certain)
“Mann International”– International Economics-(More UK QE Certain)
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Posted: Oct 27, 2009 |Comments: 0
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“Mann International”: Any lingering hopes that the United Kingdom would be in a position to withdraw from its program of quantitative easing were dashed after data released by the Office for National Statistics (ONS) showed that Europe’s second largest economy remained mired in recession for the sixth straight quarter.
Broad consensus among economists had expected the UK’s beleaguered economy to emerge from its recession with modest growth of 0.2% but the ONS figures showed that GDP had actually contracted by -0.4%. The foreign exchange markets immediately rounded on sterling which plunged to as low as $1.6384 against the US dollar.
Analysts at “Mann International” said that the news came as no surprise to the Asian-based investment boutique which has remained skeptical of speculation that the UK could feasibly withdraw its bond purchase scheme at the next meeting of the Monetary Policy Committee in November.
A source close to “Mann International” said the firm felt that economists needed to come to terms with the fact that nations such as the UK and the US with their deeply indebted consumers could not “tinker” their way out of recession by simply throwing money at economy. The source added that consumers would only start spending again when they were “good and ready”.
As the data sunk in, the “Mann International” source suggested that sterling faced challenging times ahead on the foreign exchange markets as traders took the disappointing figures as a signal that the BoE would increase QE and further devalue the currency.
“Mann International”: The price of crude oil at $80 a barrel may impede the fragile global economic recovery.
“Mann International” are thought to believe that $80 a barrel crude oil is fairly priced given the plunging value of the US dollar in which its price is denominated.
The Asian-based boutique brokerage’s analysts reason that oil producing nations have every right to expect a fair price for their product and, if the dollar’s purchasing power continues to fall, the price could reach $100 before the end of 2009.
Commentators have expressed mounting concern that the rising price of oil could increase inflationary pressures in economies with weakening currencies at a time when their fragile recoveries can least afford to raise interest rates to combat rising prices.
The United States has seen its currency pounded on the foreign exchange markets as investors grow jittery about the outlook for inflation in what is the world’s largest economy and still largest importer of crude oil.
“Mann International” is confident of the fundamentals for oil as Asian economies continue to recover from the global slowdown more quickly than their Western counterparts. The US currency has fallen consistently against those of its six most active trading partners as investor concerns mount that the US government is locked into its zero interest rate policy.
“Mann International” analysts suggest that the Obama administration and the Federal Reserve are in a catch 22 situation in being unable to raise interest rates while workers lose jobs and housing data continues to confound economists.
It is widely believed that the Fed will keep interest rates at their current low level until jobs are being created faster than they are being lost but “Mann International” feels that a sudden surge in inflation may see pressure increase on the Fed to raise rates.
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