We have had a number of major economic news out today, overall showing weak inflationary pressures but there was good news from China. The stock markets, copper prices and yuan have all responded well to news China's economy expanded by a slightly better-than-expected margin in the first quarter of this year, thanks in part to easing concerns over the nation's trade spat with the US. As well as GDP and retail sales, it was industrial data that surprised the most, suggesting that the world's second largest economy may have bottomed:
Industrial production +8.5% y/y vs. +5.6% expected and 5.3% last
GDP +6.4% q/y vs. 6.3% expected and 6.4% last
Retail sales +8.7% y/y vs. +8.3% expected and 8.2% last
In reaction to the above Chinese data, copper prices broke above a short-term corrective trend. The breakout, if sustained, could precede further technical buying given the overall bullish trend with copper holding above its 21, 50 and 200 daily moving averages and given the higher lows. The base of the breakout was around 294.50, so this level is going to be the key support to watch going forward. The first bullish objective is now this year's high at 298.50ish hit at the end of last month, with 300.00 being the subsequent target.
Risk Warning Notice Foreign Exchange and CFD trading are high risk and not suitable for everyone. You should carefully consider your investment objectives, level of experience and risk appetite before making a decision to trade with us. Most importantly, do not invest money you cannot afford to lose. There is considerable exposure to risk in any off-exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of the markets that you are trading. Margin and leverage To open a leveraged CFD or forex trade you will need to deposit money with us as margin. Margin is typically a relatively small proportion of the overall contract value. For example a contract trading on leverage of 100:1 will require margin of just 1% of the contract value. This means that a small price movement in the underlying will result in large movement in the value of your trade – this can work in your favour, or result in substantial losses. Your may lose your initial deposit and be required to deposit additional margin in order to maintain your position. If you fail to meet any margin requirement your position will be liquidated and you will be responsible for any resulting losses.