Monday, January 13, 2003
Equity markets pretty much started 2003 the same way they finished 2002 - volatile and apprehensive. Investors fretted about upcoming fourth-quarter earnings and escalating news of war. Overseas equity investors shrugged off President Bush's stimulus proposals, while foreign exchange players worried about the double deficits - the U.S. budget and current account. Analysts are wondering whether investors overseas will be willing to underwrite these deficits by continuing to purchase U.S. securities. Equities were mixed on the week. Of the indexes followed here, seven rose anywhere between 0.3 percent (Australian all ordinaries) to 4.4 percent (NASDAQ). Declines ranged from -0.7 (Japanese Topix) to 5 percent (South Korean Kospi).
The U.S. dollar had a rough week, falling to three-year lows against several major currencies including the euro, pound sterling and Canadian dollar. Adding to the downward pressure on the dollar was the quickening pace of events surrounding Iraq and North Korea. A disappointing U.S. employment report on Friday provided the final blow of the week as investors faced a weak economic recovery.
ECB and Bank of England keep rates steady
As expected, both the Bank of England and the European Central Bank met last week and left their key interest rates unchanged at 4 percent and 2.75 percent, respectively. The ECB lowered its rates by 50 basis points in December while the Bank of England did the same further back in November 2001.
More of the same so far in 2003
