January 12, 2015- Oil prices continue to spiral down in price. Most Asian markets also took a hit after the New York sell-off. This was in relation to the United States weak growth in terms of wages.
What happens in one corner of the globe has its effects rippled across continents. With oil prices continuing to go down, economies of power nation like Russia is crippled. Russia has a lot of its wealth anchored on its export of petroleum. The downward spiral of oil prices was not anticipated. The government was caught off guard. Several nations in the Middle East and in Africa are also struggling with the negative impacts that oil prices have on their economies. Saudi Arabia and other Middle East countries though were able to cope up with this new trend by cutting oil production since they have enough foreign dollar reserves. Other countries though like Russia could not use this strategy. Russia was sanctioned by the several countries, they could not import and export to countries such as the United States, EU, Norway and Canada. This is in response to Russia’s inhumane activities in the Ukrainian border.
The weak growth in US wages affects the daily lives of the general public in the US. Even Online businesses such as TV Store Online may experience lower profits since inflation is high and there is no increase of wages. This news of the US also affected European and Asian markets. People look to what is happening in power nations.
Euro vs Dollar
The DOW, S&P and Nasdaq closed last week weakly. The three indices slipped for almost 1%. This was in response to the weak growth of wages in the US. The Euro performed better.
India’s Mumbai rose by .46 percent. Bangkok also rose by .12 percent. Another Asian market that rose was Singapore. It closed higher by .19 percent. Malaysia closed at 1,735.08, .15 percent higher the day before. Indices may be green for these markets but other Asian markets suffered loss. Among those that closed lower were the markets of Jakarta, Taipei and Manila.