Inflationary pressures from across the world (ISFM) (11-03-2010)

World stock markets were feeling the strain from an overheating Chinese economy and the unrest was evident, as investors were awaiting more U.S. economic data due out today and tomorrow of the week for further insights into the state of the U.S. economic recovery.

Markets in Asia were also concern about rising inflationary pressures in China and there were few buyers; however in Japan things were looking a little better with investors taking heart from a news report the government will soon upgrade its economic assessment for this year. The main concern is now that the monetary authorities in China may start raising interest rates soon to keep a lid on mounting inflationary and any moves to either raise the cost of borrowing or limit lending by Chinese banks may send a ripple of concern throughout the world.

Oil prices were steady around the $82per barrel mark and currency markets were also pretty subdued with the euro unchanged at $1.3660 and the dollar down 0.1 percent at 90.41 yen.

European stock markets were lower around noon as mining companies were losing ground on concern of policy tightening in China, as they also followed weaker commodity prices. Banks were also under pressure, with losses ranging from 0.2 to 1.7 percent.

Worry about the inflationary pressures in China spilled over across the Atlantic and Wall Street stocks opened modestly lower, while the U.S. jobs market was still not displaying robust health.

Source: ISFM