Overnight Developments:
- Data from China showed growth slowing to 7.6%, around expectations, and market participants may have been somewhat relieved that it wasn’t worse considering the poor manufacturing and services data of late from key trading partners.
- This helped to give a very tentative sign of risk appetite to markets, after a poor session for commodity currencies yesterday.
Key Market Concerns:
- Poor macro data – weak global growth.
- Euro-zone crisis – some improvement, but still unsolved.
- Poor US earnings expectations – can hurt US equities performance.
- No enough central bank support – Fed not yet ready to act.
- US Fiscal Cliff – end of the year can bring a big shock to US economy as tax cuts expire, and gov’t spending cuts kick in.
1. Global Macro Data – Manufacturing Data
Global Macro Data – China’s Growth:
Euro-zone Crisis – Some Improvement, but Still Unresolved:
- Finance ministers meeting – proposals for bad bank in Spain and giving Spain an extra year to reach 3% deficit target goal.
- Spain reveals that it will cut spending and increase taxes by €65bn over the next 2 and a half years.
- Overnight, Moody’s cut Italy’s sovereign rating two notches from A3 to Baa2 citing worsening short-term outlook.
- But managed to sell 3.5bn euros of 3-year bonds at 4.65%, a much lower yield than the 5.3% seen at previous auction.
US Earnings Picture Wobbly:
US Fiscal Cliff Approaches:
Nick Nasad is a macro economist, market analyst, and educator; and one of the main contributors to FXTimes.com – provider of ws, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.
