Richard Perry
Independent Analyst
It would still appear as though any back data out of China is able to drive expectation of further monetary stimulus which then supports markets, but for how long this will be the case remains to be seen. A very weak set of trade data with which China exports fell by 15% (growth of 12% had been expected) whilst imports were also worse than expected. Yet still Asian markets were higher this morning as the Shanghai stocks were strong. This came after a solid close on Wall Street on Friday. With the oil price settling down of the oil price and good news from M&A deals still at the forefront, Wall Street was able to close off the week in positive fashion. European markets have started the session mildly positively.
Forex trading shows that the US dollar is once more strong, but also that the breakdown in sterling continues. Pressure is mounting on sterling now with the UK general election coming ever closer. The commodity currencies have come under considerable pressure this morning with the Canadian Loonie, the Aussie and Kiwi all weaker in the wake of such weak Chinese trade data. Furthermore, the World Bank has cut its growth target for East Asia and China for 2015/2016, citing “significant risks” from global economic uncertainties.
There is very little data for traders to look towards today, so it would appear that markets will be moving off technical signals mostly.
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