Asian equity markets are all on the rise as is real GDP. India industrial production continues to climb although its manufacturing has slumped a little. While China’s industrial production has leveled out its ongoing container throughput and car sales maintains signs of a growing and well-oiled economy. China has also seen a rise in short term rates, along with Vietnam which either shows increased expected risk or higher potential profit margins. We assume that the rise in short term interest rates is due to potential higher profit margins.
Forex rates remain strong in the Philippines, China, and Taiwan, with Australian rates on the rise while Indonesia and Thailand remain strongly down. Unemployment remains elevated in Australia and Hong Kong. Conclusion: Asia remains attractive as an investment playground.
Western equity markets have shown improvements along with real GDP. Italy and France saw decline in PMI, while the US saw some improvement. Manufacturing has slumped overall, with the exception of France. US consumerism has slumped despite the holiday season, while Russia has seen a further surge in customer spending. Forex rates are on an overall rise with the ongoing exceptions of Russia and Turkey. Russia maintains a high percentage of default on loans, however its domestic credit is on the rise. Conclusion: European and US markets offer semi-interesting investment opportunities with caution warranted.
South American equities are also on the rise along with real GDP. FX rates continue mostly down. Brazilian manufacturing has slumped. Total loans in Argentina continue to rise far and fast, indicating an ongoing deteriorating currency and the potential for hyperinflation. Conclusion: South America remains risky for fixed income investments due to potential FX risks and expected increase in defaults as well as higher inflation rates.