World markets steady as China congress starts and monetary policy gets back in focus

BRUSSELS: Europe's central banks are struggling with divergent quandaries over how to revive inflation and sustain economic growth as the US Federal Reserve prepares to start raising interest rates for the first time since the collapse of Lehman Brothers. The world's major economies are recovering at very varying paces from seven years of economic and financial crisis, with Japan tipping back into recession and China trying to surmount a severe wobble this year.

LONDON/BENGALURU: A collapse in oil prices that gave a windfall to the world's energy consumers and a flurry of policy easing from central banks might have been expected to brighten the outlook for global economic growth. But Reuters polls of more than 250 economists across Europe and North America show only modest upgrades to growth forecasts and a reluctance to relinquish a depressed inflation view, despite the rush of rate cuts and central bank cash that most respondents believe is far from over.

NEW DELHI: A partly hawkish, partly dovish money policy from the European Central Bank (ECB) caused some ripples in global financial markets overnight, but Dalal Street looked cold to the developments on Friday morning.At its policy review, the ECB decided to scale back its bond purchases to 60 billion euros a month from April (till December 2017) compared with 80 billion euro a month at present.

LONDON: From the Swiss franc's record rise in January to the near certainty of a historic US interest rate hike in December, 2015 was a far more volatile year for financial markets than most predicted 12 months ago. Bond yields across Europe plunged well below zero, the Dow Jones fell 1,000 points in one day in August and turmoil in Chinese stocks turned a downturn across emerging markets into a rout. No fewer than 43 central banks eased policy. While the direction of these moves may have surprised few observers, the scale, speed and depth caught most off guard.

LONDON: The U.S. Federal Reserve and European Central Bank are expected to deliver sharply contrasting policy decisions next month, reflecting how the world's two largest economies have moved from the Great Recession to the Great Divide. The U.S. and euro zone central banks have been on a similar path of monetary easing since the financial and economic crisis of 2007-09. But the Fed is now poised for "liftoff", delivering its first rise in interest rates for almost a decade, while the ECB is expected to flood the market with more deflation-busting stimulus.

LONDON/MILAN: European shares edged higher on Wednesday, buoyed by good company earnings and expectations the US Federal Reserve will decide to keep rates near zero at today's policy meeting. The pan-European FTSEurofirst 300 was up 0.4 per cent at 1,475 points after falling 1 per cent in the previous session. The euro zone's blue-chip Euro STOXX 50 index was up 0.6 per cent. The Fed is expected to leave interest rates unchanged on Wednesday and may struggle to convince sceptical investors it can tighten monetary policy before the end of the year in the face of slowing U.S.

AS WE write this week, the IMF's latest World Economic Outlook suggests that the world economy has had a bumpy ride of late but looks stronger than it did when the year began. There are plenty of things that could go wrong, of course, but the main threat continues to be Europe. The good news there is that a euro zone which continues to merely bungle along on its present course shouldn't be too dangerous for the world outside of the euro area's immediate backyard.

World stocks started the week in the red Monday as the dollar touched a 7-month high and U.S. and European government bond yields climbed to their highest since June following the Friday speeches by Eric Rosengren and Janet Yellen which hinted the Fed's next step could be to pursue a steepening of the TSY yield curve the same as the BOJ.