It's been an interesting day in the markets, with several countries being placed on credit watch due to their EuroZone exposure, publication of UK inflation figures and emerging market advances.
Below is a list of headlines from the last two days and what this may mean to you.
UK Inflation falls to 3.6% - Still well ahead of target.UK inflation has fallen from 4.2% to 3.6%. Some experts believe this may be sign of some economic recovery, yet is still some way ahead of the Bank of England Target of 2%.
Inflation spiked up to 5.2% last year when VAT was raised from 17.5% to 20%, but has fallen in recent months. Lower inflation rates may be good news for UK families who may find budgeting easier, but for UK pension stakeholders, many of whose schemes may not have to keep with inflation at all if draft legislation in the Finance Act finds its way into law, any inflation may erode their future buying power.
With cash investments including pensions still enduring low real-terms returns due to the 0.5% base rate of interest resulting in low bond-yields, the high rate of inflation is still bad news for cautious investors.
Moody's issues negative outlooks for EuroZone Countries.
Moody's, the credit ratings agency has issued negaive outlooks for the UK, France and Austria on account of their exposure to the EuroZone crisis.
This move may pave the way for these countries to be stipped of their AAA ratings as the credit watchdog says that it is concerned about their exposure to debt.
UK Chancellor George Osbourne stated that the UK has a series of tough austerity measures that would serve as "a reality check" for the economy, but will this be enough to save the UK's prized top-rating?
Moody's also cut ratings for a variety of other Euro countries:
Italy, cut to A2 from A3,
Spain was downgraded to A3 from A1
Portugal cut to Ba3 from Ba2
China has pledged to provide financial support to the EuroZone as it seeks to protect its largest export market. Chinese stocks have advanced 1.3% on the MSCI world index in the space of 2 weeks as a result of this resolution to provide economic assistance.
Commodities Rally to 6 Month High
Commodities have hit a high point as oil supply worries pushed pricing up to $120 a barrel (ICE Brent Crude) and gold continued to act as a store of value for cautious investors.
This is good news for investors who place their money into higher-risk precious metals and natural resources funds, but has taken some money away from the equities markets and cash investments.
Indian Stocks Advance as Inflation Cools
Indian inflation has dropped to 6.55% in January, its lowest level in 2 years.
Indian stocks have advanced on this news and the BSE Indian Sensex Index grew 0.4% as GDP growth is predicted to top 6.9% in the 12 months to March 2012.
The World Bank has high hopes for emerging markets, predicting economic growth of 5.4% this year, in comparison to the developed markets 1.4% figures.
The Reserve Bank of India is expected to further boost this growth rate by joining Brazil and Indonesia in cutting interest rates to kick-start further economic expansion.
Review
Emerging and Frontier Markets continue to lead the way in growth and return on investment for investors with an appetite for risk. The EuroZone remains uncertain and credit-cuts may make raising capital more expensive for governments in the affected region.
For more information on what the news given here may mean to you, or to take advantage of the opportunities offered to boost your return on investment, check our other targeted sites or speak to a qualified financial advisor.
