Earnings & China data lift stocks

Chris Beauchamp IG

Heading into the close, the FTSE 100 is ten points lower, while US markets await the release of Fed minutes.
Equities are finishing the week on a stronger note, as Chinese data points to stimulus and US banks start reporting season in the right way.

China throws the kitchen sink at the economy
Pound lifted on Brexit talks news
Banks kick off earnings season by beating earnings forecasts

Equities have been relentlessly positive all day, with the session having started off on the front foot thanks to Chinese credit growth, which rose 10.7% over the year to hit a sum equivalent to 9% of the country’s GDP. This is stimulus undertaken in the style of ‘shock and awe’, and certainly puts the ECB’s miserly TLTROs into the shade. The sense that the Chinese government has stepped up to the plate and delivered a hefty dose of liquidity encouraged investors from the opening bell, with US markets taking up the positive theme this afternoon. GBPUSD is making another attempt to break $1.3120, the highs from earlier in the week, as the shadow chancellor causes hope to rise with a comment
that talks between the two parties are going well. But there has been precious little sign of any real progress, leaving the UK almost exactly where it has been for the past six months, if not three years.

Earnings season has begun in the right fashion thanks to JPMorgan and Wells Fargo, and having braced themselves for some tough figures it is entirely possible that investors will find reasons for optimism in the weeks to come. Even a year-on-year decline may not be the end of the world, if it is not too severe, but a flurry of disappointment might well test the bullish momentum that has been almost universally triumphant since late December.

Author

Chris Beauchamp

EUR/USD extends its optimism past 1.1900

EUR/USD retains a firm underlying bid, surpassing the 1.1900 mark as the NA session draws to a close on Monday. The pair’s persistent uptrend comes as the US Dollar remains on the defensive, with traders staying cautious ahead of upcoming US NFP prints and CPI data.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold picks up pace, retargets $5,100

Gold gathers fresh steam, challenging daily highs en route to the $5,100 mark per troy ounce in the latter part of Monday’s session. The precious metal finds support from fresh signs of continued buying by the PBoC, while expectations that the Fed could lean more dovish also collaborate with the uptick.

XRP struggles around $1.40 despite institutional inflows

Ripple (XRP) is extending its intraday decline to around $1.40 at the time of writing on Monday amid growing pressure from the retail market and risk-off sentiment that continues to keep investors on the sidelines.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.