This might be low in comparison to the contribution of US dollar and the Euro, which account for 85% of the total contribution, however, it is indicative of significant growth potential in the future. The current diversification in central bank reserves is being driven by two primary factors. One, the interest rates in most advanced economies almost tending to zero and the other, a plethora of sovereign credit rating downgrades in the past years among major economies around the world. These downgrades are only implicative of the fact that traditional safe havens have lost their credibility. On the other hand the low levels of interest rates tend to drive up the domestic currency, eventually leading to huge cash piles overseas.

Countries like the United States and Britain have lost the much-coveted AAA endorsement from at least one credit agency. The biggest of hit in reference to reserve credit quality came last Friday, when Fitch became the second agency to strip Britain of its AAA rating. An annual survey of 60 banks released by the Royal Bank of Scotland showed that a two thirds majority would consider the possibility of an investment in the Chinese yuan. Also, 40% of the banks included in the survey claim that they would consider investing in Brazil’s real, the Indian Rupee and the Danish Crown.

Around 20 banks in this survey would consider an investment in the Norwegian, Danish and Swedish crown, New Zealand’s Dollar and the Russian rouble. This rise in demand for other currencies is driven by the demand to supply imbalance of assets in safe havens and the ever rising cost of holding a large cash pile. With a strong backing from export growth, emerging economies have managed to construct cushions of reserves to cap the local currencies.

The Managing Director at Seaport Securities in New York, Jason Weisberg, stated that the sell-off was spontaneous as no one cared to verify whether it was true or not. He further claimed that the information surplus these days is provoking spontaneous reactions from people and an overreaction of sorts happens rather than patiently waiting to substantiate the situation. These are some of the existent negatives among many positives that always-connected technology has to offer, he said.

This move was history repeating itself. On May 6^th 2010, a tumble in markets popularly known as the “flash crash” happened. The Dow industrial index tumbled more than 600 points which eventually piled on to a cumulative loss of 1000 points after which the index recovered within a few minutes. Before the tweet yesterday, most stocks witnessed solid advances as corporate earnings pushed prices up. Travellers, Coach and Netflix were all in the green. Post the closing bell, Apple rose by 4.9% as the Cupertino based company reported its quarterly earnings and released higher dividend compared to the previous year.

In fact, shares of Netflix rose even further after releasing its second quarter earnings, which not only exceeded estimates but was also indicative of a mammoth increase in the number of subscribers. Reports from Thomson Reuters indicated that the season’s earnings have been in the green with more than 68.9% of the companies listed on the S&P index having reported better than estimated results. Analysts continue to estimate a growth of 2.3% in this quarter, updating the 1.5% set at the start of this month. Housing stocks were the best performers after Barclays altered its expectations on the homebuilding sector, changing it from neutral to positive.

Added to these developments, Japan’s Prime Minister has taken a pro-competition stance by establishing an agreement with the USA which will pave way for free trade across the Pacific. In contrast, the growth strategy adopted by the European Union has been an utter failure and its economy is expected to struggle unless bold and necessary steps are commissioned by the EU itself. A total of 17 countries which suffered through recession last year are expected to continue through the same in the next year as well. The sovereign debt crises has transformed into a crisis of confidence which not only undermines consumer demand but also discourages the willingness to invest.

Chief economist at Saxo Bank, based in Denmark, asserts that given the sad state of affairs one cannot expect the condition to get any worse. Companies and the common man are disillusioned after the recession. There are several reasons that can be attributed to the lack of resurgence. One such example is Portugal, where the European Central Bank’s low interest rates aren’t reaching the common man. Loans continue to remain hard to obtain and also cost more than regions in and around Northern Europe.

The fiasco in Cyprus has led to the lack of confidence between banks and their clients (who’ve just taken a hit on all deposits over 100,000 Euros). Finance ministers of the G20 will breathe a sigh of relief that markets haven’t panicked after the events unfolding in Cyprus.

A senior portfolio manager at a popular firm claimed that cyclical names are sure to lead the market higher on the long term. However, the short term decline will continue among these stocks. The currency market saw the dollar climb as high as 99.90 yen, close to the four year high of 99.95 yen it touched on April 11. Presumably, it is around this 100 dollar mark that most option barriers are believed to be in line, according to several experienced analysts. Japanese officials continued to assert that the aggressive stimulus plan which will see the pumping of $1.4 trillion into emerging markets is aimed at ending the decade long struggle against deflation rather than weaken the yen in anyway. This was accepted by the group of G20 countries as well.

The low pushback from G20 essentially implies that Bank of Japan can continue to relieve further if necessary, keeping the Yen lower over a longer period of time. The actions adopted by the G20 not only removed barriers to further Yen’s weakness, but also allowed the US dollar to test the symbolically important 100 yen versus dollar level and thus boost the demand for stock in Japan. Important central banks continue to hold interest rates at a bare minimum since 2008, pumping volumes that amount to $6 trillion through various value asset purchase operations and loans, boasting of a mediocre success rate thus far.

The euro continued to display its vulnerability versus the dollar on expectations from the central bank as the currency fell by 0.2% ending the day at $1.3049. European shares on the other hand ended in the positive, as signs of advancement in the political stalemate in Italy overshadowed concerns over health of global economy and news pertaining to downbeat earnings.

Although the amount of the fine is not monumental considering McDonald’s is the world’s largest restaurant chain, the Sao Paulo based agency claimed that this fine could serve as a precedent for other lawsuits and would cost the restaurant dearly as the word finds its way to other jurisdictions as well. Eventually, the multinational may end up paying manifold the original $1.6 million fine. Obviously, this is not an isolated incident given the reach of McDonald’s advertising campaign and the popularity of its Happy Meals among the young demographic.

Experts argue that there is no point in appealing against fine, given that children lack the maturity, rationality and even purchasing power to enter the market as potential consumers. The fine which was announced on Monday dates back to a campaign started in 2010, offering free toys with meals, which included action figures from motion pictures like Avatar at the time. Marketing policies have followed similar patterns ever since which is bound to pave way for more fines. McDonald’s refrained from commenting on the issue. However, the company is free to appeal against the matter in court.

The penalty imposed on McDonald’s is seen as a fast growing trend in the Brazilian economy, as local regulators have begun targeting big companies for possible consumer abuses within their jurisdiction. In the name of consumer protection, regulatory agencies have been penalizing banks, private health plans and phone companies. The story in the United States continues to remain different as request bans on such product from paediatricians fails to gain any traction and eventually lose out due to lack of enthusiasm. Regulators in the U.S have urged companies to voluntarily conclude food advertising targeting children unless it involves the promotion of healthy fare.

Finance Minister Taro Aso asserted that this policy is in line with the G20 agreement in February and its primary aims are to achieve economic recovery and stability in prices. The newly appointed Bank of Japan Governor Haruhiko Kuroda declared that the monetary policy had now gained a broad understanding, but emerging market nations expressed their concern over the negative impact of the heavy cash inflow that such investments can cause in higher growth economies. In a statement earlier in the week, a senior IMF official said Japan’s $1.4 trillion stimulus plan is a much necessary and a most welcomed step in the revival of the economy.

Recently resigned Bank of Canada (BOC) Governor Mark Carney claimed Japan’s actions are in agreement with the G20 communiqué in February as they don’t promote competitive devaluation of any form. Carey, who is the head of G20’s Financial Stability Board, will take charge of Bank of England starting July. The low trading volumes may have been attributed to the fact that the entire city of Boston was in lockdown in search of the second suspect of the Boston Marathon bombings after the first suspect was found deceased. Given the economic importance of Boston in the US market, the difference was more than significant. This was confirmed by Brad Bretchel, MD at a brokerage in Stamford, said his firm saw less liquidity than commonly seen on a Friday morning.

Some asset managers in Boston claimed school holidays could also be a reason behind the low trade volumes. Having hit its peak at 99.68 the dollar finished the week at 99.50 yen, up 1.4%. The Euro finished at 129.90 yen, after reaching an intraday peak of 130.24 and seemed on course to test the three year peak of 131.11 Yen recorded last week.

Well before the announcement of this aggressive policy by Bank of Japan, global investors were pumping loads of cash into the Russian, Mexican and other bonds in an attempt to bring an end to the many years of stagnation in these markets. A total sum of $1.4 trillion was pumped into these economies. Investors have been prompted into bringing some cash home in recent times after the depreciation of yen (15% this year) and a 28% gain in stock from Japan. That said, analysts are still looking at Japan’s craving towards foreign assets given the low yields that Japanese bonds and deposits have in offer. Merrill Lynch from Bank of America claimed the Japanese retail investors are estimated to hold almost $16.8 trillion in assets and a little more than 50% of this amount in cash and deposits.

Analysts at the Bank of America believe that emerging market with high interest rates and strong growth rates are bound to lure a significant fraction of the aforementioned savings. After the G20 meet, leaders believed that they could be ‘mindful’ of side effects of this policy in the long run. According to the IMF, emerging markets account for 75% of the world’s global growth. This has managed to fuel a major change into funds of the local currency which fetched more than $16.7 billion within the first three months this year, which is the best by far in the last two years. Emerging markets however, continue to remain attractive courtesy of the higher yields and low interest rates in Japan.

In countries like Mexico and South Africa several sovereign bonds are known to offer 300-900 basis points well above that in offer at Japan. Several analysts are of the opinion that BOJ’s strategy would push yields on Japanese bonds for 10 year periods, even lower than its current level of 0.6%.

IMF chief economist, Olivier Blanchard asserted that although tail risks had dropped in quantity, this was not the time for policy-makers to relax. This report was released in the wake of the gathering of global financial leaders from around the world for the semi-annual meetings which will be conducted by the IMF and the World Bank later this week. The IMF cut the predictions for global growth from 3.5 percent that it predicted in January to its current value of 3.3 percent. The forecast for 2014 was also reduced from 4.1 percent to 4.0 percent.

A rather subdued economic outlook for the US and Europe led to a drop in growth estimates to 1.2 percent for the year. However, the forecast for 2014 for these economies was left untouched. Growth estimates for emerging markets also took witnessed a slight drop in values for the year. However, the IMF did also predicted accelerated estimates for the same for the next year. Growth has finally returned to the world’s largest manufacturer (China) and will soon return to Brazil by the commencement of next year. Furthermore, the IMF asserted that strong indigenous demand in the sub-Saharan region of Africa should help both rich and poor economies in that region.

Oil rich nations in the Middle East and North Africa are expected to take a dip in growth, given how oil production has slackened in pace. The IMF was also appreciative of the efforts taken by the governments in the United States and the Eurozone to address the gravest of short term risks and thus ensuring that the possibility of meltdown was averted, at least in the near future. Continuous policy based governance is essential in these times and no country can afford to slacken in the current economic situation prevailing among the advanced economies.

On a second consecutive day of gains, crude stabilized a little above $99 a barrel as stocks on both the Wall Street and several European markets advanced despite the omnipresent global demand concerns. Many European and US indices posted their worst intra week trades for the year thanks to stocks that were sold in the wake of weak economic data and plunging commodity prices. There were indications that the predicted market uptrend could capsize given how the S&P 500 index closed below the 50-day moving average, as trading ended on Thursday. The last time this happened was in December last year. Volumes in intraday trades did appear subdued owing to the sell off experienced during the week and also probably because there was no data released on Friday. The equity turnover was in line with the year’s estimated daily average, but considerably low for a day in which the options expired.

The Chief Investment Officer at Harbor Advisory group in Portsmouth claimed that these advances were merely a reaction to the recent declines that have been witnessed over the past week. In his opinion stocks and indices were merely trying to offer resistance at a particular level to ensure that the market doesn’t fall below that point. The sell-off may have caused the S&P 500 to stay in the red beyond the 50 day moving average. However, the index has shown growth of 9% this year and the pullback could lead to investors rethinking their valuations on the same.

The Dow industrial index continues to trade at abysmal levels damaged by IBM’s quarterly earnings which turned out less than estimated. MSCI’s all world equity index viz. a plethora of stocks from 45 different countries rose by 0.6%. For the week, the index posted its worst decline since June last year. The dollar on the other hand continued the extension of gains over the yen as Japanese officials agreed that their monetary policy was targeted at the uplifting the domestic market rather than currency recovery.

Canada recovered from a soft recession in 2008-09, adding more than 900,000 jobs since. The recession was supposedly over quickly in Canada and the jobless rate reduced to 7.2% from 8.7%, when the recession was at its peak. Not a single bank reached out to the government for aid, neither did the housing market collapse and Jim Flaherty (the finance minister) boasted of how the country was outperforming its fellow partners in the distinguished Group of Seven industrialized economies. The biggest challenge for Canada now is the slackening in recent growth figures. The jagged patch late last year has transformed disappointment to dread. Economists had their money on a faster US recovery to not only boost Canadian exports but also improve business spending.

This slowdown could as well spell doom for the Conservative government, which apparently is showing signs of losing ground to the Liberals as indicated by several opinion polls off late. Policy makers are predicting a bright future for the latter half of 2013, but business leaders continue to remain uncertain. Claros, a single father of four, is living from whatever is left of his severance, is waiting for unemployment insurance which is due for 31 weeks now. Around 54,000 Canadians joined Claros in the unemployed category, in March, which is the worst month for job cuts in more than four years.

Consumer spending and housing which are considered engines of growth have been slowing down and several businesses are also flinching away from investments. With the government working to balance the budget and the Bank of Canada issuing more rate hikes, stimulus programs are no longer working. The resource rich Canada can only pin its hopes on a rather uncertain energy sector and a possible US recovery.