During the first half of this year, global financial markets were generally in shock. Half a year has passed, and why is the global financial market in a state of repeated shocks? What are the financial market trends this year? In this connection, xinhua journalists interviewed practitioners at major international financial centres in new york, london and tokyo。
The financial markets are rocking
According to james stewart, chief economist of blue oak capital, an investment bank based in london, united kingdom, the greatest feature of the financial market in the first half of the year was volatility. This was particularly evident in the foreign exchange market, where the euro fell by 14 per cent against the united states dollar。
While most of the global stock markets were depressed in january, after a period of strong performance, the gains made in the previous months were wiped out by the greek debt crisis from april onwards。
In large commodity markets, prices, whether oil or metals, have experienced large fluctuations. In the bond market, the major government bonds performed well, while some smaller countries were sold。
Uncertainty contributes
“uncertainty is the most important cause of a significant market shock.” senior trader alan wildez, 33 years on the new york stock exchange, told xinhua correspondent。
According to wildez, the current challenges facing the global financial markets are multifaceted and this is also the cause of market shocks. First, the magnitude of the european debt crisis now appears to be far greater than previously anticipated。
Second, wildez noted that the final version of the u. S. Financial regulation act was still under discussion, which would put pressure on markets, particularly on financial sectors. Moreover, would the domestic economic recovery of the united states be hampered by the european debt crisis? All of this is now at the heart of investors, making market direction difficult。
Economic situation determines direction
Turning to the movement of the united states stock market in the second half of the year, wildez, who had stood firmly in the “cow market” camp, also seems somewhat confused. “i see no reason for the rise in the stock market now,” wildez said, “the european debt problem will be plaguing the market for a considerable period of time, but, more importantly, despite the fact that the government has been saying how jobs will be created, we have so far not seen a welcome substantial improvement in the job market”
From the analysis of wildez, he was also concerned about the key challenge facing the united states economy, namely employment。
According to hung yun, analyst at the investment information department of the securities firm of san suai bank of japan, the economic situation and trends in the united states remain the main indicators of concern for the tokyo market, the most important of which is unemployment and personal consumption data. If all move in the right direction, the united states stock market in new york will rise and the japanese stock market will be encouraged to rise。
Can the shock pattern be reversed
Global financial market developments are closely linked to the evolution of the economic situation, and economists generally believe that the global economy now has good signs of sustained recovery, as well as downside risks and challenges. Consequently, the reversal of the pattern of shocks in financial markets remains largely dependent on the ability of countries to resolve their problems as quickly as possible and contribute to sustained economic recovery。
According to red cloud ho, the main factors affecting the tokyo stock market in the second half of the year were several aspects, one of which was progress in the european sovereign debt crisis. At present, the greek sovereign debt crisis is still in its shadow, and investors fear that it will continue to spread to other countries。
In addition, red cloud ho believes that economic and financial policy developments in important economies such as the united states and china will affect the tokyo stock market. Moreover, because the yen exchange rate is closely linked to exports, among others, the possibility of a japanese stock market falling is high if the european sovereign debt crisis is prolonged and the yen exchange rate does not fall in the short term。
However, while a number of investors were cautious about the financial market developments of the second half of the year, some experts felt that investors could still expect something。
Although stuart argued that market volatility was due to investors ' fear of a renewed recession in the economy. Financial markets are also expected to perform better than in the first half of the year, when the economy is largely favourable. (sinhua news agency)
