With Chinese trade data disappointingly weak 1st QTR. GDP is predicted to follow suit when released tomorrow. 7% or maybe lower are predicted numbers with concessions from officials that China may need more stimulus.
Of course you might not need to worry about any fall in Chinese stocks . They’ve developed the same way as other exchanges, that is ignore the bad news because it means more stimulus is coming.
It all makes you wonder who’s buying those Eurozone exports which have seemingly been improving dragging growth indicators in the region a little better even if its not yet translated into meaningful falls in unemployment.
Some risk off yesterday which has helped the JPY pick up while elsewhere the EUR has drifted lower. That’s meant EUR/JPY down at 126.10 and looking like 130 is a distant memory. I still expect GBP to keep up but yesterday it was the EUR that continued to take all the selling pressure.
Something a little interesting is this Zero Hedge article on credit. It seems that data is pointing very clearly towards an economic slowdown so just maybe those worries about a Fed hike may turn towards you know what. Yes maybe the QE 4 camp will be right. What then for the USD ? Stocks will love it though.
Market summary
Forex..AUD played catch up ( weakness ) on poor Chinese data now 0.7580 over 1% lower from Fridays close. EUR/USD has also continued to slide quietly down at 1.0550 . I still don’t buy quick move to parity but with Greece still unsolved EUR bears don’t seem to have much to fear right now. I still expect GBP to suffer pre and post election. USD/JPY back under 120.00 and I continue to expect JPY gains on crosses even after any general turn in the USD.
Equities..All a bit mixed as some profit taking set in after the Chinese Trade data but less so in Asia where more stimulus is now expected.
Bonds..Not much change US 10 YR. a whisker lower yield at 1.92 but with Germany now at 0.14 , mind the gap as they say.
Tuesday update.. Chinese data looking soft