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Equities exhale
By Anne D. Picker, International Economist, Econoday
Monday, July 7, 2003
Last Week’s Highlights
The Reserve Bank of Australia left interest rates
unchanged at 4.75 percent, signaling that it is more concerned about spiraling
house prices than the slowing economy or the Australian dollar’s biggest
quarterly gain in 20 years. The dollar rose to a five-year high on the news. In
the past, the central bank has warned about the danger to the economy of rising
debt, the result of increased borrowing to buy property in a booming housing
market. Sydney home prices have risen by as much as 50 percent the past six
months. The central bank, which has not changed interest rates for the past 13
months, doesn't release a statement explaining its decision. Both Australian
bonds and stocks declined after the action. Australia's benchmark rate is 3.75
percentage points above the U.S. Fed funds rate of 1 percent. The European
Central Bank lowered its key rate by 50 basis points to 2 percent in June.
Equities were skittish last week. End of second quarter
and beginning of third quarter positioning muddied the market, as did combined
holidays in Canada and Hong Kong on Tuesday and the U.S. on Friday. The Nikkei
and Topix soared mid-week after the Bank of Japan’s Tankan sentiment survey
results weren’t as terrible as analysts expected. On the week, four of the
indexes followed here ebbed lower while the rest climbed.
Last Week's Highlights Global Stock Market Indexes Recap of Global Markets Currencies Indicator Scoreboard
The Bottom Line Looking Ahead
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