Best of the Friday web

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American markets tumbled on the back of disappointing jobs data, a gloomy growth outlook, and nervousness going into European elections this weekend.

[caption id="attachment_59138" align="alignright" width="300" caption="Nicholas Sarkozy"] Image courtesy World Economic Forum: http://www.flickr.com/people/15237218@N00 [/caption]

Stefan Wagstyl discusses the effects of poor US jobs numbers on EM and crude in the Financial Times' beyondbrics blog

In the wake of underwhelming jobs data, U.S. markets sold off precipitously, with the Dow Jones, NASDAQ, and S&P 500 indices all down more than a percentage point. The price of Brent crude ( BNO , quote ) slipped 3% in Friday trading, for a total 6% loss over the past three sessions. The slip in crude to more reasonable levels will have a discernible effect on the economic health of a number of emerging economies . Net importers of crude like South Korea ( EWY , quote ) and Turkey ( TUR , quote ) stand to benefit, while economies heavily reliant on the production of crude, like Russia ( RSX , quote ), may suffer.

The Economist talks about Bayrou's snub of Nicolas Sarkozy in their Elysée blog

Although French centrist candidate François Bayrou was eliminated in the first round of French Presidential elections, his role in the second-round cannot be understated. Ideologically placed in between the two second-round challengers, Nicolas Sarkozy and François Hollande, Bayrou is in position to make an election-deciding endorsement. This week, the candidate has voiced his support for Hollande's candidacy, although he has stated he will not call on his party to vote for the Socialist candidate. Even in spite of the lack of a full-fledged backing, Bayrou's decision is a blow for Sarkozy's candidacy capturing the centrist vote is seen as key to his re-election hopes.

Buttonwood looks into the extent of Europe's problems in The Economist

"The composite figures for the European economy, released this morning, show that the picture is even worse than first thought," claims the British newspaper.The final numbers of European PMIs came in even lower than the flash estimates, with Spain ( EWP , quote ) and Italy's ( EWI , quote ) numbers being particularly dreary. Given that the German ( EWG , quote ) PMI is still above 50, it remains to be seen if Europe's largest economy will relent and consent to growth-promoting policies.

Joe Leahy describes how Brazil is moving to lower interest rates in The Financial Times (paywall)

Brazilian President Dilma Rousseff has lowered the guaranteed rate of return on special savings accounts, known as poupança . A reduction in these rates, currently at about 6%, is seen as crucial to decreasing overall interest rates. If Brazil ( EWZ , quote ) were to continue to cut interest rates without lowering rates on the poupança , economists fear that demand for bonds would dry up as people moved more money into these high-interest rate savings vehicles. A decrease in the poupança thus allows the Brazilian central bank more monetary policy flexibility; however, lingering concerns over inflation could impair the efficacy of these maneuvers.

Disclosure: Author's immediate family is long EWZ



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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