/ world today news/ The past week was good for the capital markets, which took a break from the reduction of tension and concerns over the confrontation between the West and Russia over the annexation of Crimea.
Indices in the US registered new all-time highs, while those in Europe are approaching their highest levels. The S&P 500 index is very close to 1,500 points, while the Dow Jones Industrial Average is about to pass 16,700 points. Gold, silver and oil remained calm, trading unchanged during the week.
Currency markets reacted strongly to the statement of the President of the European Central Bank, Mario Draghi, regarding the willingness of the institution to take active measures to prevent the fall in inflation rates. The latest eurozone inflation data showed prices rose 0.5% in March from March 2013, well below the ECB‘s comfortable 2% annual inflation target. One of the most dangerous phenomena for modern economies, where levels of private debt are traditionally high, is deflation. It makes credit more difficult to service and, if left unchecked, leads to corporate and private bankruptcies and asset price collapses, as well as a sharp deterioration in macroeconomic indicators.
Draghi hinted that the ECB could start programs to buy assets from banks. The aim is thus to inject liquidity into the financial system of the Eurozone, which could eventually be transformed into loans. With them, aggregate demand should be set in motion. As a result, the euro depreciated against the US dollar by more than 1% on the week, last trading around $1.37 per euro. The pound also fell against the US dollar, as did the New Zealand dollar and the Japanese yen.
The US dollar and stocks were also supported by good US economic data. The American economy continues to develop upwards. This is what the data on non-agricultural employment speak for. In March, companies hired 192 thousand employees, and the data for February was revised upwards, from 175 to 197 thousand newly hired.
Enthusiasm ruled the Bulgarian Stock Exchange. SOFIX rose more than 3% for the week, testing early March highs reached before the Crimea crisis. BSE trading is becoming more active – both in terms of traded volumes and the number of transactions.
On the other hand, the extension of the period for the initial public offering of the CSKA football club shares reduced the number of people willing to buy the securities. In the old tradition, investors are likely to wait until the last possible moment to buy the stock. The offering of CSKA shares will continue until May 19, 2014.
Bull Trend Brokerage LTD
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