Week of Aug 30 2013 – Weekly Recap & The Week Ahead
“The essence of portfolio management is the management of risks, not the management of returns.” — Benjamin Graham
1. Japan’s debt-funding costs to hit $257 bln next year — Reuters, Japan’s Ministry of Finance reportedly wants to allocate a record ¥25.3T ($257B) to service the country’s mammoth debt of ¥1,000T ($10T) – which is double the size of its economy – for the next fiscal year. The expected provision is 13.7% higher than for this FY.
2. Obama seeks congress approval on a military strike against Syria — Bloomberg, Oil reached a two-year high and energy shares led gains in U.S. stocks, while emerging-market currencies weakened, amid growing speculation there will be an American-led military strike against Syria. The UK voted against military intervention. Many Asian and European share indices sold-off, with some emerging-market asset classes continuing to suffer.
3. Indian currency continues its free-fall — the Indian rupee’s collapse shows no sign of waning, the rupee hitting yet another record low of 68.71 to the dollar as the tension in the Middle East adds to the Fed’s prospective tapering and domestic economic problems as reasons to sell.
4. Emerging Markets Currency Movement — MarketWatch, below is a chart which explains the recent Emerging-Market slump. Late last week, the Reserve Bank of India said it would sell dollars to the country’s major oil companies. With oil India’s biggest import item, the action is aimed at removing $400-500M worth of demand a day for the dollar from the spot market and reducing downward pressure on the rupee.
5. German jobless rate holds steady — Germany’s unemployment rate was unchanged at 6.8% in August, although the number of people without a job unexpectedly rose by 7,000 vs a fall of 7,000 in July and consensus for a drop of 5,000.
The week ahead — Economic data from Econoday.com:
Tags: eem currency chart