11 August 2010

Financial Market Team update (English)

15:09 ET

Monetary policy statements depress markets
The Bank of England's Mervin King said that "the UK recovery is likely to continue, but the overall outlook is weaker". (Read Mervin King's statement here.) The Fed and the Bank of England determined that quantitative easing would continue but would not be expanded. Major American, European and Asian stock markets fell today by more than 2%.

The euro is at its lowest level for a month. It was down by more than 2%, representing its steepest one-day drop since January 2009. Although the yen reached its lowest level against the dollar earlier today (Y84.79), it is paring losses.

Treasury bonds
2-year, 5-year, 7-year and 10-year Treasuries have been falling; at one point during the day they reached record-low yields.

According to the International Energy Agency's Oil Market Report released today, global demand for 2010 and 2011 is expected to rise as a result of an expected GDP increase. However, because of the BP's oil spill, a supply shortage is expected in 2011. Crude oil continues to fall for the fourth day and is now below US$80. Wheat futures are slightly down while corn futures are rising. After sugar rose yesterday on speculation that Russia's production of beets would be affected by the drought, it fell today on expectations of Indian exports.

(Read more about global markets in FT $ )

Patrick Signoret and Georgina Lara

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