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Straits Times 3,134.03 +5.58 +0.18%
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Market Jitters Amid Signs Of Rate Increase
By: Peter Ng
Articles (81) Profile

The unemployment rate in the US continued to slide as the world’s largest economy registered a 6-year low unemployment at 5.5% in Feb-15.

However, the improving labour conditions have revived concerns that the US Federal Reserve could raise interest rates sooner than expected, as the central bank has repeatedly quoted that the country’s labour health falls under its utmost priority towards the setting of monetary policy.

The US markets retaliated with a broad-based decline where the S&P 500 index closed lower at 2,040.20 on 11 Mar-15 since the data was released on 6 Mar-15, and concurrently pushing the US dollar to a multi-year high against the Euro and Yen.

As opposed to the soaring US dollar, the Euro currency continued its dive deeper beyond its 10-year low 1.07 versus the US dollar where it closed at 1.07 on 11 Mar-15.

On top of the collapse in European bond yields fuelled by the European Central Bank’s version of quantitative easing that took place on 10 Mar-15, other factors including a weak Eurozone economy and the ongoing debt crisis in Greece, offered little reasons to be positive in the Euro currency.

Traversing to Asia, China posted a set of economic data in Jan-15 and Feb-15 including industrial output, retail sales and fixed asset investments that are at multi-year lows, which prompted the People’s Bank of China to slash deposit and lending interest rates in Feb-15 to 2.5% and 5.35% respectively, a second time within the past 3 months.

Back home, the Straits Times Index broke the support and closed below the 3,400 point, extending its losing streak into a fifth consecutive session on 13 Mar-15.

Backed by a strong interest in investments, Peter's research spans across a range of industries, with his focus placed on companies listed on the SGX.

Please click here for more information about this author.


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