Markets Rise on US and Asian Good News

Markets ticked up on Wednesday as the US authorities indicated interest rates would remain low for some time.

Morningstar 17 March, 2010 | 5:54PM
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This laid to rest any lingering fears of a hike in interest rates on the back of improving GDP figures.

There was also good news from Asia, as Japan took further steps to combat deflation and the World Bank raised its growth outlook for China. In Japan, the central bank decided to double its programme of three-month, low rate loans to banks. Analysts debated the efficacy of the measures, but it did show willing on the part of policymarkers.

The World Bank raised its GDP forecast for China for the full year 2009 to 9.5%. Its report suggested that there remained a significant risk of a bubble in asset prices unless China adopted a stricter monetary policy. Its punchy growth forecast may also inflame the US/China row on the value of the renminbi. However, the Bank also said it didn’t see inflation as a significant problem in the medium term.

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