Most everybody was shocked by the stock indices slump and commodity prices collapse to multi-year lows. Anyways, it must have happened sooner or later as the central banks of developed economies pumped trillions of dollars into the markets after the 2008 crisis, that didn’t turn into real investments in the economy. And now the question is whether the US and Chinese authorities can keep the world from a new crisis.
The stock market decline started on Friday. The apparent reason for that was the release of China’s Manufacturing PMI showing weak data of 47.1 points. It confirmed investors’ concerns about an economic slowdown in the Celestial Empire.
The whole situation develops amid the ongoing tedious talks about the US Fed’s rate hike. A Federal Open Market Committee meeting is scheduled for September, and at least before that moment the markets are going to be balancing on the edge of a cliff. Interest rate hiking will lead to the US dollar strengthening and further weakening of the other currencies.
The Chinese and US financial officials retain considerable uncertainty as to their activities even for the near future, causing a wobble on the markets.
