World Economy to End 2014 in Brittle State

The global economy is ending the year in a fragile state with factory activity shrinking in China, euro zone business growth remaining weak, and emerging market giant Russia in a spiraling currency crisis.  “These are uncertain times again and there is a risk of another global downturn,” said Stephen Webster, chief European economist at 4CAST.

Poor to mediocre business surveys in Asia and Europe released on Tuesday are likely to put pressure on both the European Central Bank and People’s Bank of China to come up with more stimulus.  They also threaten the overall 2015 outlook give the two economies’ huge global reach. Data for the United States was due later in the day.

But it was events in Russia that were most eye-catching.  Russia’s central bank took drastic action to defend its ruble currency in a surprise midnight raising of interest rates by 650 basis points to 17 percent.

CNBC

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.