Ongoing uncertainty shakes markets

Economic data released this week sent mixed signals about the current trend in global economic activity, but the OECD, like the IMF, issued a clear warning about the need to boost investment and maintain accommodative policies to avoid a "secular stagnation". Meanwhile, the ECB failed to calm financial markets, with President Mario Draghi emphasising that investors should get used to higher asset price volatility while interest rates remain very low. Greece remained in focus as default loomed.

Business cycle indicators released this week sent mixed signals about the momentum of the global economy. The in-house indicator of global business confidence for May edged slightly down from April as improvement in manufacturing was more than offset by a decline in the services sector, partly correcting the divergence observed since the beginning of the year, says Barclays. Moreover, at the regional level, the small decline was led by weaker confidence in advanced countries. The index improved slightly in EM countries, though from a very low level, added Barclays.