Market Outlook

Market Outlook :

The European Union's split over Greece was in focus last week. Germany's stance on helping the country overcome its budget deficits has been tough but it seemed to have turned tougher recently. Greek Prime Minister has been busy bargaining for lower borrowing costs, while German Chancellor Angela Merkel suggested Greece to seek assistance from the IMF. The euro was under tremendous pressure last week.

The theme will remain important next week as the EU summit will unveil more details about European leaders' stance on the issue.

Tightening in Asian economy is looming. While China has raised required reserve ratios twice in the first 2 months in 2010, India raised interest rates last week as we expected. As emerging markets, especially China and India, are expected as the strongest growth driver of economy, these cooling measures inevitably affect market sentiment.