Chinese strong data gives markets a truce
Chinese strong data gives markets a truce
Chinese strong data: China’s GDP grew 6.5% on an annual basis,
while analysts expected a 6.1% year-on-year.
Industrial production in China rose 7.3% on an annual basis in December,
while analysts expected a 6.9% increase on annual basis.
Both indicators were better than expected.
This is positive for the Chinese economy in particular,
Almost all of this was the most prominent event affecting today’s trading,
just 2 days before the inauguration of US President Joe Biden,
as traders are now thinking about the impact this will have on markets.
Evest is following up with you on how this affected markets during early week trading.
Oil is under pressure… Strong Chinese data limit losses
Oil prices came under pressure again today, after reports showed an increase in the number of American rigs.
This indicates an increase in production and weak demand for fuel in light of the rapid spread of the Corona Covid-19 virus,
as it continues to cast a shadow on market.
Brent crude futures for March delivery fell out of $ 0.46, or 0. 83%, to $ 54.64 a barrel.
US West Texas Intermediate crude futures for February delivery also were down to $ 0.35, or 0.67% to reach $ 52.01 a barrel.
0il prices moved lower today due to negative sentiments pressuring traders,
such as the increase in US rigs activity and increase
in a number of new cases of Covid-19 which has the potential to raise concerns about fuel demand.
Markets participants are skeptical about a recovery in oil demand in near future,
because of the increasing growth in numbers of new cases of Coronavirus globally.
Many countries have tightened quarantine measures after the epidemic situation deteriorated.
Japan closed areas completely, while in the United States of America,
198.000 new infections were discovered only yesterday.
The number of deaths is close to 400.000.
Strong Chinese data helped limit oil losses, as China’s Gross domestic products grew stronger than expected during 2020.
China also recorded the highest growth in industrial production through December of last year, since June 2017.
According to the Government Statistics Office of the Peoples’ Republic of China, China’s economy grew up by 2.3%, in 2020.
In the fourth quarter, GDP jumped to reach 6.5 %, bringing growth back to pre-crisis levels.
The volume of industrial production in China increased by 7.3%, in December.
Gold is recovering from its lowest levels through a month and a half
Gold prices recovered today, as traders now look to the Coronavirus relief packages that help in
increasing the appeal of yellow bullion as a tool to hedge against inflation.
Gold rose by 0.7%, to trade at $1838 an ounce after it fell to its lowest levels since December 2,
at $1809 an ounce in the previous session.
Gold went through a lot of floundering during the last periods,
as it lost many levels and almost all of the gains it had realized in the last two months.
However, after US President Joe Biden announced the major stimulus package,
expectations of higher inflation rates in the United States of America increased,
which by its turn made yellow metal attractive in eyes of investors.
Losses in Stock markets… Recovery in the Chinese market
European markets ended Friday’s trading with equity indices falling.
Markets focused on the effects of the financial stimulus promised by Joe Biden, the new president of the US,
at a time when governments are forced to tighten measures to combat Coronavirus amid a decline in vaccine supplies from Pfizer.
By the end of this day, the British FTSE index lost 0.97%, down to 6.735.71 points.
French CAC index also fell out of 1.22% to record 5.611.69 points while the German DAX index fell by 1.44%, to trade at 13.787.73 points.
Through today’s trading, the German DAX index is close to rising to 0.12%,
to reach the level of 91, which is its level in the previous four weeks.
In the United States, its stocks closed in the red area on the back of negative prices besides,
lower retail sales in December and quarterly results from JPMorgan Chase, Citigroup, and Wells Fargo.
. Standard and Poor’s index fell to 0.72%, to trade at 3.768.25 points.
Dow Jones Industrial Average fell by 0.57%, to trade at 30.814.26 points.
Nasdaq Composite Index fell to 0.87%, to trade at 12.998.5 points.
Wall Street is closed today, as. Martin Luther King Day is celebrated in the United States of America.
Stock indices fell today in most parts of Asia after a downturn on Wall Street,
but Chinese indices rose after data showed that the Chinese economy strongly grew by 2.3% in 2020.
This strong performance of the Chinese economy which exceeded expectations,
helped to raise morale as it seemed that recovery from economic devastation caused by Coronavirus is close,
especially since China was the first country where the virus appeared and it was finally able to eliminate the negative economic effects of the virus.
Hong Kong’s Hang Seng Index rose by 0.84%, while Shanghai Composite added the same percentage and
the Australian S&P /ASX 200 index fell by 0.78%, while the Kospi index declined by 2.33%.
The dollar is trading in a mixed position
In foreign exchange markets, Evest is following up the rise of the US dollar today against a group
of major currencies and it’s declining against other currencies.
Euro was steady against the US dollar at 1.2076 while Sterling fell against the US dollar by 0.23%, to trade at 1.3553.
The Australian dollar and New Zealand dollar, each fell against their US counterparts by 0.24% and
0.23%, to trade at 0.7681 and 0.7114 in a row.
United States Dollar fell against the Japanese yen by 0.05%, to trade at 103.74
it stabilized against the Chinese Yuan to trade at 6.4782.