The Shanghai stock exchange has started the week on the back foot once again posting an over 5% decline as investors continue to fret over a number of issues facing investors in Chinese stocks. Asian economies are slowing, in particular China as evidenced once again over the week end and it’s how the authorities go about dealing with this that is spooking the markets. Whilst they may have plenty of tools at their disposal they are faced with a two pronged problem of pursuing both economic and market reform agendas. Global stock markets have had a terrible start to 2016 with the Dow in the US having its worst January start since the index was formed. This morning European indices are expected to continue in their poor vein of form with the FTSE 100 due to open below the 5900 level and so to the downside all eyes will be on the 5870 and then the 5770 level which was the low formed during last August’s falls in equity markets.
The economic calendar is quiet today but a focus will be on the Bank of England this Thursday especially since a great deal of bearish sentiment has emerged in respect to the UK economy, with even the Chancellor warning of storm clouds ahead. GBPUSD has been a one way ticket lower ever since it broke below the 1.5000 level.Publication source