Expect more Chinese stimulus

9 December, 2015

A year of stimulus, interest rate cuts and most recently devaluations to its currency is finally having the desired effect on inflation in China as CPI data came in at 1.5%, slightly higher than the 1.4% expected. There are still wide spread deflationary pressures for producers who see continue to see prices tumble with PPI coming in as expected at -5.9%, but for consumers the stimulus measures have had a greater impact showing prices rising. However, for the PBOC inflation is still running well below target which means there remains plenty of room for further stimulus measures. Ever since the Yuan was added to the IMF’s reserve currency basket we’ve seen the fixing rate lowered in the last four days in a row and we’re likely to see a continuation of the renminbi’s devaluation. The data saw a mixed reaction from Asian markets overnight but crude prices are seeing a bounce with Brent finding major support at the $40 a barrel level and so this morning European indices are looking to commence trading in the black.

Yesterday’s UK manufacturing data was softer and caused GBPUSD to dip back below the 1.5000 level however this didn’t last very long with cable trading back to 1.5035 at the time of writing. The remainder of the day is quiet on the economic data front, but later this evening the RBNZ makes its latest interest rate decision where they are expected to cut rates from 2.75% to 2.50%, so the 0.6600 level on NZDUSD will be watched.


Source link  
Peaked trade optimism?

Throughout the past week, the US dollar has received support after strengthening expectations that the Fed will take an extended break after three consecutive rate cuts...

Russel 2000 doesn't support S&P500 optimism

S&P500 closed Monday at historical highs, adding 0.55% on the day close. Both expected new Fed interest rates cut and possible...

Oil drops on weak corporate data out of China

Oil prices fell on Monday after strong gains last week, as data released in China reinforced signs that its economy is slowing, though progress...


Market Sentiment Hinging On Progress In Brexit

The British parliament will vote on the Brexit agreement today at 18:00 GMT. In theory, this should be a simple vote, with a definite...

Market shows demand for yielding assets

The market shows demand for yielding assets, which in turn supports demand for the stocks and currencies of emerging markets. The main...

Yuan and Dollar as a weapon in trade wars

The US Nonfarm Payrolls on Friday could even be called boring: the report showed the preservation of a completely healthy labour market...


Disappointment with Fed and tariffs

Trump announced 10% tariffs on Chinese goods worth $300 billion since September 1, thus ending the US-China trade truce after disappointingly...

Fed pushes down stocks

Markets have started the week under pressure. Expectations that the Federal Reserve will cut interest rates by 50 points in July collapsed...

Gold updates new 6-years highs

Gold benefits from a combination of two factors: lower interest rates in debt markets and continuing hopes that the global economy...

  


Share it on:   or