Chief Market Strategist at FXTM
Following
a 6.8% contraction in the first three months of 2020, the Chinese economy
managed to bounce back in the second quarter recording GDP growth of 3.2%, well
above the 2.5% economists had expected. Given that China has managed to largely
control the spread of Covid-19 since April, it wasn’t surprising to see an
improvement in economic activity, especially given policymaker’s support
through stimulus packages, lowering taxes, slashing lending rates and reducing
the required reserve ratios for banks.
Extra-smart
#Nigerians are getting shares of the new #Lagos by acquiring #plots, acres and
hectares of land at #Ibeju #Lekki . What are you waiting for? Click: http://www.tectono-business.com/2019/07/have-share-of-new-lagos-by-investing-in.html
However,
the recovery did look uneven during the quarter as industrial production rose
by 4.8%, while retail sales fell 3.9%. This is a clear indication that consumer
confidence remains low and will be alarming if we see such a trend in the
developed economies.
Investors
seemed to put more weight on the consumption data and have pulled out of
riskier assets. Asian equities have declined, led by the Shanghai composite
which has shed more than 2.3% at the time of writing. European stocks have also
retreated from yesterday’s rally and US indices are pointing towards a lower
open.
Have
you heard that #Landwey is giving out plots of land at #URBAN #PRIME TWO #ESTATE
at #Abraham #Adesanya #Roundabout, #Ajah, #Lagos? You can get yours by clicking:
http://www.tectono-business.com/2020/02/urban-prime-two-estate.html
Another
risk event that may drive volatility later this afternoon is the ECB meeting.
After raising its Pandemic Emergency Purchase Program by EUR600 billion to
EUR1.35 trillion in June, bond purchases by the central bank declined
significantly in the final week of that month. While we do not expect to see a
change to the program or any of the monetary policy tools, the ECB President Christine Lagarde needs to reassure
market participants that more tools will be deployed if required. After all,
central banks have been the key driver of the equity rally and any signs of a
retreat will hurt sentiment.
The
Euro’s recent steep rebound will also be tested. After rising to a four-month
high yesterday, the single currency failed to retest the March peak of 1.1492.
While the ECB meeting may turn out to be fairly quiet, Friday’s EU Summit is
likely to determine whether we see another leg higher or further retreat from
the critical 1.15 level. The focus will be on the ambitious EUR750 billion
recovery fund and how united the EU leaders are towards the union. Approval of
billions in fiscal stimulus will send a strong signal to markets and encourage
further long positions in EURUSD, otherwise expect the currency pair to remain
capped around 1.15.
Wow!!!
Have you discovered where #CEOs and top #managers take their #vehicles to for
body work, painting with #Sikkens #paint and #oven #baking? It’s GOF AUTOS LTD.
For details, click: http://www.tectono-business.com/2017/06/gof-autos-limited-best-automobile.html
Wall
Street investors will continue to monitor corporate earnings. The earnings
beats from big banks like Goldman Sachs, JP Morgan and Citi were all impressive.
However, it was the surge in trading activity that led to such performance,
rather than other traditional banking services which the economy relies
on. We still expect to see earnings
decline by around 40% for the second quarter, but it’s what executives say
about the upcoming quarters that matter the most and so far, we still have a
gloomy outlook. The latest surge in equities was driven by hopes for a
coronavirus vaccine, but as we have seen, such news is short-lived as the
S&P 500 has so far failed three times to hold on to positive territory for
the year. That is a negative sign for a bull market which has been driven by a
narrow group of stocks.
No comments:
Post a Comment