Germany’s DAX …down

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Germany’s DAX made the most in loss section in the past two weeks. The index is down as the Deutsche Telekom AG and Morgan Stanley had cut their share-price estimate for Europe’s largest phone company. Automobile Sales in U.S has gone down for a fifth straight month in March and this has led to the Car-makers loss in Germany. The DAX index was down by 1.5 percent. Deutsche Telekom dropped three percent and the Morgan Stanley reduced the share price estimate by 6.5 percent. I think Germany's DAX will definitely retain its original position.

Retails Sales.....Europe

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European retail sales were good in the month of February. But then what happened in March is the question. The reason is that retail sales fell in March and consumer confidence dropped across the region as inflation and higher credit costs and declining house prices sapped spending. There has been rise in the food and energy prices and that has been eroding the living standards and stoking inflation. This has limited the scope for central banks to cut interest rates just as higher rates just as credit costs hur Europe’s economy. The housing prices in Europe rose at a snail’s pace in this year.

The root cause of this problem is a squeeze on real income growth. And this can be a greater impact on consumer pyschology. The European stocks also had a snail pace growth. The European central bank and the England bank are trying hard to damp the inflation and also at the same time avoid the U.S recession impact. I hope they should achieve this target.

Long Time .....U.S dollar

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Its quite a long time that I have not been concentrating on the indices specially the favorite FTSE. I saw that the current trend in the market is quite fluctuating. And specially the U.S stock market is all ups and downs. Japanese Yen which was the prey to carry trades is now all set and harldy I can watch the carry trade news on Yen in Newspapers. Yen is all relieved now. But then why is the U.S stock market undergoing a cyclical-change? The major reasons for the dollar value getting lesser and lesser is the real-estate industry in United States. The demand for housing market has been declining at an uninterrupted rate and the subprime losses have got the momentum. The Federal Reserve has been taking steps to curb out this problem and protect its economic structure.

Take the case of 2004, there was continuous depreciation in the U.S dollar value and later it was in a high-standard. And now again in 2008, the value is near to the ground. U.S interest rates cut will definitely have a direct impact on the U.S economy. Gold and Oil commodity markets are nothing to do with the U.S dollar value. Since Oil is denominated in dollars therefore a change in the price of a barrel does not affect the value of a dollar.

The swings in the currency value increases instability in the world economy by impeding international trade and investment because of rising uncertainity. Some feel that the dollar’s fall is good because it makes the U.S exports less expensive and that the higher demand may cut the trade deficit costs. The downside of low-value dollar is that it makes all the imports that they consume are more expensive, including raw material and parts used by U.S. businesses, and makes it costlier for U.S. dollar holders to travel or invest outside the U.S. A continued drop in the dollar's value could destabilize the international economy, leading to a worldwide recession. So Federal Reserve should re-think on interest rates and the credit flow pattern and the investment areas to stabilize the economical activity in U.S.A

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Strong Dollar and Weak Gold

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The U.S dollar which was rallying in weak position is back on track. The U.S economy is expected to be in safe zone. But then U.S dollar’s recovery has caused reverse effect to the commodity market. The Gold market in London was low yesterday and it fell to an almost one month low. Not only Gold, but also metals like platinum and silver also came down. The investors thought that the slump in the U.S dollar will end, so they sold commodities. As a result gold is down. And the volatility in the markets has been high from past few days. Since tomorrow being Good Friday, the markets are expected to be cool.

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Housing Slump and the Dollar…. Crash

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The U.S dollar is depreciating on account of bad economic structure which is affected by recession and on the other hand the slump in the housing market. The Yen which was the centre of attraction of being a prey to the carry trades , has all of a sudden rose and is strengthened against the U.S dollar. The dollar is weak before the Euro, Pound and the Yen. Fed Reserve’s decision to cut the interest rates has already made a slump in the U.S currency. The mortage industry is effected with subprime issues of retail industry.

``More and more Americans are going to walk away from their mortgages, and that's going to undermine the foundations of these banking institutions,'' Stiglitz, a professor at Columbia University, told Radio New Zealand today from Auckland. The crisis in U.S economy is the worst it has even seen in almost 80 years for now. And the only available solution is the interest rate cuts to do with this problem.

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Inflation and Oil

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Inflation, is an economic concept. The effect of inflation is the prices of everything going up over the years. The effect of inflation is neutral on every economy. The impact is no loss no profit situation causing to Break Even Point. When the economy reaches saturation point, it ceases from side effects. And now Britain is under inflation status. Britain's inflation rate jumped over and above the Bank of England's 2 percent target to a sign higher interest rates have yet to wring price pressures out of the economy.

Consumer prices climbed an annual 2.1 percent making an increase of 0.5 percent on the prices in this month. There is fear that the British economy may face greater riks from gains in consumer prices or the little damage to their economy due to U.S subprime mortgage slump.

Whatever it is, but one thing is for sure, that the oil and food prices are under inflation magic and dealing with OIL in britain may be a little serious issue.

Oil climbed above $98 per barrel and food costs in British stores increased the most in almost two years.

I think spending on OIL and food are unavoidable and cant sit back without buying, but the purchase should be little sensible and reasonable. And when it comes to trading, beware is the best word to use.

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BIG OIL

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Oil importing countries must give a deep think to their oil barrels. Their business with oil must be apt and precise. Because the Crude Oil supply may not be the same in future as it is now. The quantity of oil barrels may change less proportionately. But for now, the Organization of Petroleum Exporting Countries (formerly OPEC) have agreed to keep the output unchanged at a meeting in Vienna. When OPEC has decided to be stagnant with their production, the colombian rebels attacked Transandino an oil pipeline in the country which seriously did some loss to that oil pipeline. One may perhaps should be sure that OPEC will not definitely increase its production but it may either lessen the quantity of production or it may produce standstill barrels. When there is more demand and the supply is less, the price will move in an upward direction causing an inverse relationship with demand and price. The oil supply is less and demand for it is increasing rapidly. Already Latin America is facing emerging crisis for oil. The OIL prices in Latin America is setting fire ablaze. So countries which import oil must be very careful and also the traders who trade on oil must be very cautious.