Optimistic until further notice (ISFM) (03-01-2011)

The year is starting with stellar performances throughout the world stating from Asia and continuing in Europe. Wall Street futures were also upbeat

The good news began earlier this morning in Asia, as it is becoming apparent that the Chinese authorities’ efforts to curb inflation seem to be bearing fruit, as shown by a monthly survey released in the past couple of days, indicating a slight fall in manufacturing in China, which had bee rising for 5 months. This was enough to ease investor fears that authorities would take further steps to cool inflation, including by raising interest rates further, which could hurt economic growth.

Oil prices were up were following suit, rising past $91, as investors were trying to fathom how high they can go before sparking inflation. Some analysts believe that prices of $100 are inevitable during this year, but it’s early days yet. Among currencies, the dollar rose 0.3 percent against the yen to 81.42, while the euro rose 0.3 percent against the US currency to 1.3302.

In Europe, stock markets began the year’s trading with strong performances, as optimism over global growth helped automakers rise. Markets have been rising on expectations of brighter economic outlook in the United States after further stimulus and continuing strength in China and India. In the euro zone, fast rising new orders and an improvement in the labour market have helped support the region's manufacturing sector for the fourth month running in December, but the underlying concerns with regard to euro zone sovereign debt crisis are still very much alive as markets fear that the contagion may spread to more peripheral countries .

On Wall Street, US stock futures were pointing upwards to a positive start to 2011, helped by investor enthusiasm for equities and optimism about the outlook for U.S. growth.

Source: ISFM