Apple fights back
New launch
US tech giant Apple, which has been under pressure for a lack of new products, launched the first stage of its fight back this week, with the unveiling of a new updated operating system for its iPhones and iPads. In a riposte against accusations of a lack of innovation, it also announced a new music streaming service as well as updates to hardware in the form of its iMac desktop and laptop computers. But the real test of Apple's ongoing ability to push the boundaries will come later in the year, with new products expected in the third quarter ahead of the key Christmas selling season.
UK recovering
But slowly
The UK economy appears to remain on track for recovery, albeit at a slow pace. The latest industrial production figures for April showed a 0.1 per cent uplift against expectations of flat growth. Manufacturing output dipped by 0.2 per cent, but this was not unexpected after two months of expansion and the figure remains ahead of that recorded at the start of the year, which is consistent with a gradual recovery. Meanwhile, the Purchasing Managers; Index figures for manufacturing hit 51.3 in May, up from 50.2 in April, with any figure above 50 indicating expansion and jobs figures showed unemployment falling by 5,000 in the latest period following a three-month rise.
Japan rising
BoJ effect kicks in
Central bank actions continue to have a strong effect on equity markets worldwide. This week, the Bank of Japan's decision to hold its intervention activity at its current level led to a dip in equities, as the risk-off mood in emerging markets gathered pace. But there are signs that the Bank of Japan's explosive action in recent months is feeding through into improving business conditions in what has been a moribund economy for the best past of the past two decades, with the latest surveys showing rising confidence in Japan's corporate sector. And, this week, the Bank of Japan raised its view on the health of the economy for the sixth successive month - this follows recent news that the economy grew at an annualised rate of 4.1 per cent in the opening quarter of the year.
Deutsche deal?
Vodafone move
UK telecoms giant Vodafone looked to make a landgrab in the German market this week with an approach for Kabel Deutschland. The €7bn company is Germany's biggest cable company and supplies its 'triple play' of phone, broadband and cable television services to 8.5m households in the country. Any deal would prove complementary to Vodafone's existing mobile phone presence in Germany and would mark the next step in Vodafone's stated ambition to grow its European presence outside of its wireless business. Analysts believe any such deal would provide decent cost savings for Vodafone from migrating customers on Kabel's German cable infrastructure.
Emerging problems
Risk-off hurts
Typically for a period when risk has most certainly been off the menu for most investors, emerging markets have taken the brunt of the recent correction in equities around the world. Despite the fact that many analysts believe that equities are the most compelling game in town at the moment, traders have been pocketing profits in recent sessions and previously hot markets have cooled significantly. Concern over the removal of quantitative easing medicine is at the core of the correction and emerging markets equities, currencies and bonds have all reversed sharply in the past two weeks. The FTSE Emerging Markets index has fallen 10 per cent in the past month and currencies such as the Indian rupee, South African rand and Brazilian real are all at multi-year lows against the US dollar.
Bond bubble
BoE warning
A senior Bank of England (BoE) figure has warned that the potential bursting of the bubble in bond markets threatens to wreak new havoc on the wider financial markets. Bank director Andy Haldane told MPs this week that a rapid rise in yields on government bonds represented the "biggest risk" to global financial stability, and that moves in bond markets in recent weeks, as volatility has returned, hinted at the start of such a process. Mr Haldane described the effect of money-printing by central banks as having intentionally "blown the biggest bond bubble in history".
