While countries across the world are grappling to combat the constraints triggered by the long running debt crisis in Europe, central bank’s intervention has certainly given the much needed boost to global market.
If reports are to be referred to, it has been seen that the MSCI Asia Pacific Index went up by 3.5% MSCI Asia Pacific Index, while the Standard & Poor’s 500 Index futures moved up by 0.2%. It was also told that South Korea’s won was seen moving up by 1.8% and the Dollar Index nosedived by 0.2%.
Market observers are of the view that this jump was all due to the steps taken by six central banks. It has been told that Federal Reserve has reduced the cost at which dollar is being given to others through swap agreements. This step would allow purchase of dollar easy for other countries. Even the People’s Bank of China has trim down the reserve requirements after 2008.
With such steps being taken, there is common belief that global monetary policy is making a transition towards good but how long it will take to negate the problem of debt crisis is yet not known.
There was rise of 2.8% in Commonwealth Bank of Australia (CBA), and 14% in Evergrande Real Estate Group Ltd in Hong Kong. There has been Beige Book survey which has revealed that the economy has done well in recent times and that due to significant performance in manufacturing and consumer sector. This survey also made it clear that despite all the lingering fears about US recession, there are fair chances that Us economy would be able to seam through all challenges, however, unemployment rate would remain a concerning point for one and all.
It has been confirmed that the US Federal Reserve, the European Central Bank, and the central banks of the UK, Canada, Japan and Switzerland would take some concrete decision on 5 December.