Uttoxeter Online Magazine

Tthis week’s Financial Bulletin contains the following points:

Disappointment over the failure of the US Federal Reserve to announce a further programme of quantitative easing overshadowed better than expected US unemployment data, the number of Americans claiming benefit fell to the lowest level since 2008. There was good news on the inflation front for the UK where the consumer price index fell for the second consecutive month to 4.8%. Overall, global equity markets gave ground on the week as investors once more opted for safer havens such as the US dollar and Treasury bonds.

Worries over the eurozone resurfaced once more as markets looked for more details - not forthcoming - from EU leaders on their latest 'grand bargain' to sort out the sovereign debt crisis. Tensions were raised when rating agency Standard & Poor's warned that 15 of the region's 17 members might suffer a downrating in coming months, including France which caused a backlash as President Sarkozy questioned why the UK, with a worse fiscal deficit, was not in the firing line.

One aspect that has upset the markets is the failure of the ECB to use its firepower by buying up sovereign bonds - however the Bank has made available unlimited cheap money for banks to borrow giving rise to a new 'carry trade' whereby banks borrow at 1% and buy, for example, Italian bonds yielding over 6%. Whilst not a solution to the crisis it might buy more time for EU leaders to resolve the crisis long term.

China's property market is in the spotlight following signs that its speculative bubble might be bursting with prices falling last month. Beijing has been under pressure to lower prices because most Chinese have no chance of buying a home at current inflated prices. The concern is though that the property sector accounts for 13% of GDP and is therefore pivotal not just to China's growth but global growth too.

Lastly, looking ahead, we discuss ways investors can create more certain investment outcomes by ensuring they diversify their assets in a structured way to reduce risk and volatility.

Please note the next Bulletin will be 3 January 2012.

( The complete text of this weeks Financial Bulletin can be downloaded as a 'pdf' file here. )

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Extract from this weeks Financial Marketing Bulletin, issued by RBA Wealth Management Ltd.

To see the full Financial Briefing Note and to sign up to receive them automatically each week

visit their web site : www.rbawealthmanagement.com or call  01889 568444