Wednesday, 9 October 2013

Markets fall, IMF cuts global growth outlook

Markets fell on Tuesday as the US budget deadlock dragged on. The S&P 500 fell 1.2 percent while the STOXX Europe 600 fell 0.8 percent. The US Treasury's sale of $30 billion of one-month bills saw rates hitting 0.35 percent, the highest since November 2008.

In a report released on Tuesday, the International Monetary Fund cut its global growth outlook to 2.9 percent for this year and 3.6 percent for next year from 3.1 percent and 3.8 percent respectively. It also warned that a US government default could “seriously damage” the world economy.

Economic data on Tuesday were mixed.

In Japan, the current account surplus plunged 63.7 percent in August from a year ago. However, service sector sentiment improved in September, with the economy watchers survey showing the current conditions index rising to 52.8 from 51.2 in August and the future conditions index rising to 54.2 from 51.2.

In Germany, factory orders fell 0.3 percent in August after having fallen 1.9 percent in July. However, exports rebounded 1.0 percent in August after having fallen 0.8 percent in July.

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