The Purchasing Managers Index report for China is due to be issued tomorrow 1 January 2013. At this time many experts have indicated that they believe that the report will show continued if not slightly lowered growth from the previous month of November 2013`s report.
Analysts note that the factors comprised in the PMI report include inventory levels, supplier deliveries, production, employment environment, and new orders. This report is often used as a tool by economists for determining the health of a nation`s manufacturing sector as well as the overall conditions in the market. If the local or global economy is improving, it shows that there is increasing demand that will appear in the form of new orders and higher production. Moreover, conversely if the economy is more prosperous, then manufacturers can make more hires, improving the level of employment.and helping to put more cash in consumer`s pockets for buying goods.
Chinese production levels are an important concern for the markets as they are one of the largest manufacturers on the global stage. In addition to their trade with countries in the West, China`s economic activity has a significant impact on Australia and New Zealand as they are regionally interdependent. As such, any major changes in the Chinese economy could affect the value of the Aussie or Kiwi in their trading.
Investors are advised to watch for potential shifts in demand and trade balances following the release of this report.
Yen Headed for Significant Losses
It was reported on 31 December 2013 that the Japanese Yen is expected to have had its worst year since 1979. Experts have pointed to the Bank of Japan`s monetary policy as perhaps the main culprit behind the decline.
The policies that were established earlier in the year stem are a part of the Abenomics plan set out by Prime Minister Shinzo Abe to help grow the economy. As a part of this plan, the Bank of Japan is constantly expanding its involvement in the economy through bond purchases. The stimulus is aimed at pushing up inflation to a desired target against the backdrop of nearly 15 years of deflation. Included in this plan was the decision in April to add nearly 7 billion yen monthly in quantitative easing measures, totaling near to 70 trillion yen over the course of the year, which was reconfirmed this past month.
Analysts note that the reemergence of the US dollar over the past few months and the increased production levels in the Eurozone have helped to devalue the Yen in its trading. The twin directions of growth in the West and the value killing stimulus package from the Bank of Japan are piling on more pressure to the already weakened Japanese currency.
Investors are advised to look for more movement against the Yen by its rival currencies in the coming months as the government attempts to implement its monetary policy.
Investors Bet on Rise for Loonie
In reaction to the recent success of the neighboring US dollar, Canada`s loonie has struggled to play catch up as it has been punished by the global currency markets. However it was reported on 31 December 2013 that some experts believed that the loonie had been unjustifiably depressed and that the markets would begin to act to counterbalance the massive shifts. The loonie took a considerable hit following the announcement from the US Federal Reserve that it would reduce its stimulus package down from $85 billion to $75 billion in annual bond and treasury purchases.
It was already noticed today that the loonie had risen from its lowest point in over three years as investors placed their bets that it would start to make a comeback in the coming days and weeks. While noting that the currency remains risky, some experts expressed that it may begin to be more attractive as a risk-related currency.
Analysts note that the prospects for the loonie may be looking up. With the consistent rise in the West Texas Intermediate energy market over the price of crude, Canada`s most significant export, the northern nation`s coffers could expect a boost in next month`s reports.
Investors are advised to watch for a shift in the value of the loonie in the coming days and weeks as the markets attempt to rebalance themselves.