Markets were mixed in Asia on Tuesday. Japan’s Nikkei index soared 2.29 percent, once again hitting a fresh five-year high as the yen weakened to trade at 102.7350 to the dollar. In Hong Kong, the Hang Seng climbed 0.50 percent, while the S&P/ASX 200 slid 0.56 percent in Australia.
European markets advanced in mid-day trading on the back of mixed economic news. France, the region’s second-largest economy, slipped into recession in the first quarter, although Germany managed to avoid negative growth. Germany’s DAX was up 0.01 percent, London’s FTSE 100 was up 0.13 percent, and the STOXX 50 was up 0.13 percent.
U.S. futures at 8:40 a.m.: DJIA: -0.01%, S&P 500: -0.12%, NASDAQ: -0.01%.
Here are three stories to keep an eye on:
1) First-Quarter Euro Area GDP Contracts: GDP fell by 0.2 percent in the EA 17 and by 0.1 percent in the EU 27 during the first quarter, according to data released by Eurostat on Wednesday. This compares to -0.6 and -0.5 percent respective growth in the fourth quarter. On the year, seasonally-adjusted GDP is down by 1.0 percent in the EA17 and by 0.7 percent in the EU27.
Within the EU, France’s first-quarter GDP contracted 0.2 percent, while Germany managed to dodge recession with 0.1 percent growth. Spanish and Italian economic output both contracted 0.5 percent.
According to Eurostat’s data, U.S. GDP grew by 0.6 percent in the first quarter, and by 1.8 percent on the year.
2) Governor of the Bank of England Says Goodbye: Mervyn King, governor of the Bank of England, issued his last inflation report today. In it, King forecast slow but inexorable recovery for the U.K. economy in the coming years, adding that “the main downside risk to the sustainability of the recovery continues to stem from events overseas, especially in the euro area.”
Speaking for the U.K., on a subject relevant to economies all around the world, he explained, “Monetary policy alone, however, cannot solve all our problems. There are limits to what can be achieved by general monetary stimulus – in any form. If we are to see a return to sustained growth, not only in the U.K. economy, but the world economy as a whole, we must find a way to a new equilibrium in which there is a rebalancing of world demand.”
3) Chinese Growth Forecasts Lowered: Citing sluggish external demand, analysts at Bank of America Merrill Lynch have lowered their growth forecasts for China. The firm reduced its 2013 GDP growth forecast from 8.0 percent to 7.6 percent, and its 2014 GDP growth forecast from 7.7 percent to 7.6 percent. The median analyst forecast for GDP growth is 7.8 percent for 2013 and 8.0 percent for 2014.
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